Europe, US, Emerging markets and some to my Finnish-speaking audience.
Previously
on MoreLiver’s:
EUROPE
Is eurozone governance fit for purpose? – ECB
Keynote speech by
Benoît Cœuré, Member of the Executive Board of the ECB, at a dinner organized by
the Centre for European Reform, London, 30 January 2014
A Brief Interview with Sergio Rebelo on the Euro-Area
Economy – Macroblog
Wherever Did Europe’s Sovereign CDS Trading Go? – WSJ
The nail in the
coffin: European Union plans to ban ‘naked’ short selling in sovereign CDS
caused volumes to dwindle, and when the rules finally came into effect, trading
almost disappeared, ISDA data show.
Our generalised
variance decomposition analyisis does not suggest strong direct spillovers from
the euro area periphery. The significant drop in the CDS spreads between July
2012 and December 2012 was mainly driven by a decline in risk aversion as
suggested by the model’s out of sample forecasts.
Officials in Brussels
have been highly critical of a German provision that limits access by EU
nationals to its unemployment benefits. In an interview, EU Commissioner László
Andor criticizes "unscrupulous politicians" seeking to foment
populism.
French Economics Minister: 'There Is No German
Model for France' – Spiegel
Moscovici discusses
President Hollande's decision to implement structural reforms, his friendship
with Wolfgang Schäuble and criticism of France he believes is unjust.
Insights: Nordic household debt – Nordea
Denmark clearly has the highest debt-to-income ratio, and Finland has the lowest one. At first glance the data
seem to indicate an alarming situation for Denmark, but it is important to take into account household
assets.
EZ business-cycle syncing – voxeu.org
While the euro has had
some impact on business-cycle synchronisation in the Eurozone, it has done so
not through increased intra-regional trade intensity, but rather through some
other channel – most likely financial integration.
The Russian government
accused the West of helping foment unrest in Ukraine as the country’s opposition leaders sought
outside help at a conference in Germany and vowed to continue anti-government
protests.
The History of the IMF and Greece’s
Bailout – WSJ
While euro zone and IMF officials secretly debate how to deal with Greece’s
ever-controversial bailout, it might prove instructive to go back to the
genesis of the program.
Charlemagne: The euro’s hellhound – The
Economist
It is time to reform
the troika that handles euro zone bail-outs
Greece Is
Back – ZH
Germany
preparing new Greek aid package – Spiegel – Ekathimerini
Germany, France, Creditors Hold Secret Meeting Due To Greek Bailout "Mounting
Concerns"
5 reasons the ECB will act in the months ahead – Sober
Look
Liquidity, credit, monetary
aggregates, disinflation
Bundesbank would favor end of sterilization to
boost liquidity in bank system
– WSJ
The Bundesbank would
favor an end to the ECB’s policy of withdrawing large amounts of money from the
banking system to offset its government-bond holdings, a person familiar with
the matter said.
BANKING
Main features of the 2014 EU-wide stress test – EBA
2014 EU-wide stress test FAQ – EBA
Europe’s Stress Tests: A Cheat’s Guide – WSJ
ECB Seeking to Unmask Weak Banks Wants Risky
Loan Details – BB
The information may
give the ECB, which takes over supervision of the euro-region’s banks in
November, a clearer view of diverging national practices in defining bad loans
and allow for better comparison across the euro area. The deadline for
submission was Dec. 31
Setting the exam – The
Economist
The hope is that the
next round of stress tests, due to be conducted later this year, will turn out
to be more of a success. A lot is riding on that. The frailty of banks has been
a consistent theme in the euro crisis
European Banks Face 5.5% Capital Hurdle in EBA
Stress Test – BB
The exercise, which
will examine a sample of 124 banks that cover more than half of each EU member
state’s banking industry, is scheduled to begin around the end of May
MACRO
NUMBERS
ECB deflation risk denial has echoes of 2009 – Reuters
It may be true that
the euro zone is further away from deflation now than it was in 2009, not long
after a historic crash in stock markets around the globe. But waiting for
deflation to set in while hoping for a different outcome could derail an
already very fragile economic recovery.
There are Economic Jitters on Both Sides of The
Old Iron Curtain – WSJ
Deflation, thus, is spreading
from the euro zone to Eastern Europe and then bouncing back again. That will
only be made worse if eastern European defaults rise as they become unable to
pay back their ballooning–in local currency terms–debts to western European
banks.
More pressure on the ECB from low inflation – Danske
Bank
Inflation back to October-lows – Nordea
European Unemployment By Country – ZH
UNITED STATES
Fed draws criticism from abroad as emerging
markets still reeling – Reuters
Two monetarist cheers for Ben Bernanke – The
Telegraph
Bernanke, despite his
mistakes, is one of the great figures of our age
The January Barometer, by the Numbers – WSJ
The Dow Jones
Industrial Average’s performance in January has predicted the outcome of the
full-year direction in 87 of 116 years, or 75% of the time, according to WSJ
Market Data Group
EMERGING
Emerging Markets Inflow Numbers Point to Exit
by Bond Investors – NYT
Emerging Market Rout May Signal ‘Sudden Stop’:
Cutting Research – BB
Brazil, South Africa, Turkey and Ukraine are the emerging markets most at risk of a
“sudden stop,” in the view of Morgan Stanley. That’s defined as a halt or even
a reversal in capital flows into a country, slashing access to international
financial markets for an extended period and weakening the economy.
Have EM outflows only just begun? – alphaville
/ FT
SocGen’s cross-asset
research team believes so, especially given the Fed doesn’t appear to care
about the EM sell-off. If it keeps going, balance of payments issues could
emerge as a result
How To Trade The Emerging Market Meltdown – ZH
SocGen: it makes sense
to go fully defensive in all asset classes.
Credit in China is
growing at a breakneck pace, raising serious concerns about the level of risk
in the financial system. The government now must determine how to balance the
economy’s liquidity needs with protecting the system's solvency.
Emerging threat or opportunity? – The Economist
A useful rule of thumb
is that emerging markets are attractive when they are out of fashion and trade
at a discount to developed market equities. Both conditions are satisfied;
Goldman Sachs says EM shares trade at a 25% discount to developed equities,
compared with a 10% premium in 2007
Emerging market funds lose $9 billion in past
week – Reuters
Submerging markets are not the norm (so far) – Long-short
/ FT
People have grown used
to the idea that Turkey is a stable country and a good place to do business. They are now
shocked to find they may have been a little over-optimistic – but that does not
mean we are in a re-run of 1997 (at least not yet). The other emerging markets
hit by the recent currency turmoil have a common factor: they run current
account deficits.
EM Currency: The Common Risk Factor in Emerging
Markets – Journal
of Investing
The major EM
benchmarks, whether debt or equity, are all driven by a common risk factor -
the EM currencies
EM: the kevlar-gloved take – alphaville
/ FT
BNP: one could argue
that more needs to be done but we can’t say we have not seen a policy response.
Rate hikes in EM are now either being delivered (and sometimes aggressively so)
or priced in as the rates markets have sold off.
EM: Don’t Panic – The
Economist
There is no reason for
a broad emerging-market crisis. But nervous investors could yet cause one
EM rout? Or Intervention Sunday? – Humble
Student
On one hand, the bulls
should be aware of the possibility of an emerging market currency crisis is
very real and we could see a real rout in asset prices starting with EM assets.
On the other hand, the markets are setting up the pre-conditions for massive
intervention.
Emerging Markets’ Victimhood Narrative – View
/ BB
Who’s to blame for the emerging-market crisis? – Felix
Salmon / Reuters
Neither Krugman nor
Rodrik is blaming the Fed for causing the emerging-market bubble in the first
place…The trick to preventing sudden stops isn’t to keep the money flowing: the
trick to preventing sudden stops is to not make yourself susceptible to them in
the first place.
Thailand: A bloody election awaits Sunday – Nordea
The extraordinary
election on Sunday may end in bloodbath, as protesters will try to block the
vote. Police and pro-government groups will strike back to support the
administration. Even in the absence of a collision, the political crisis is
unlikely to be solved after Sunday and downside risk to the THB remains large.
OTHER
February Sentiment Summary – The Short
Side of Long
Individual investor
optimism has just started to scale back * Despite a sell off, retail investors
are plowing money into stocks * Volatility Index (VIX) has finally broken out
to the upside! * According to NYSE, investor leverage climbed to a new record *
Merrill Lynch Fund Manager Survey shows bonds still disliked * After 7th
consecutive monthly outflow, retail investors are back! * Hedge funds are now
going through a Long Bond short squeeze * Commodity exposure by funds remains
unchanged through Jan * Hedge funds have turned net short on Sugar prices again
* Speculator are holding net long positions on the US Dollar * Hedge funds
continue to increase PMs net long exposure
How Rothschild Sees The Future – ZH
Further monetary
'experiments' are becoming less probable. However, significant imbalances and
risks persist.
Has Monetary Cooperation Broken Down? – PIIE
Why the leaders of the two largest developed
economies are begging companies to raise pay – Quartz
Will robots steal our jobs? The humble loom
suggests not. – WaPo
FINNISH
EUROOPPA
Laillisuudesta
luopuminen – Tyhmyri
Olli Rehn ja EU:n jo vallitseva ja mitä
ilmeisimmin vahvistuva periaate
Euron
todellisuutta – Tyhmyri
Kuoleman suudelma keskiluokalle ja
vientivetoisen toipumisen valhe
Talouskriisin
hoitoa islantilaisittain – Valtteri
Aaltonen / US
EU ja
työvoiman vapaa liikkuvuus – Brysselin
kone / YLE
Hallitusneuvos Olli Sorainen Työ- ja
elinkeinoministeriöstä sanoo, että EU:ssa Suomi ei ole mikään työperäisen
maahanmuuton suurmaa ja hekin jotka meille tulevat lähtevät täältä helposti
pois.
Mutta entä tulevaisuudessa? Kuinka paljon
työperäistä maahanmuuttoa meillä tulee olemaan ja kuinka paljon me sitä
tarvitsemme?
Talousmaaottelu
Suomi vs. 12 euromaata – Sijoitustalous
KOTIMAA
Katainen:
Säästöjen arvioiminen on perusteltua – YLE
Afrikan-matkaltaan palannut pääministeri
kommentoi hallituksen riitaa tulevista säästöistä lähettämällä tiedotteen. Myös
Kataisen mielestä on perusteltua arvioida, miten säästöt jaksotetaan ja
minkälaisia vaikutuksia verojen korotuksilla ja leikkauksilla olisi.
Työpaikat
tai palkat – mankeli odottaa – Jan
Hurri / TalSa
Sisäinen devalvaatio ei onnistunut viime
lamassa, eikä sen onnistuminen ole nytkään varmaa. Se on kuitenkin tiedossa,
että Suomen kustannuspaine on kasvanut eikä hellittänyt. Moni meitä rujommin
kriisistä kärsinyt maa on pakosta karsinut kuluja, ja on ainakin tilastoissa
kohentanut kilpailukykyään. Suomelta maali karkaa, mutta ennen pitkää meilläkin
mankeliin joutuvat työpaikat tai palkat tai molemmat.
Nyt
leikkauksia vihataan - hyvä niin – Henri
Myllyniemi / US
Pääkirjoitus:
Kataisen uskottavuus koetuksella – IS
Pääkirjoitus:
Kovaa nimeä etsittiin, mutta Jungner saatiin – IS
Talousprofessori:
Suomelta puuttuu idea valtionvelan hillitsemisestä – YLE
Hallituksen mukaan Suomen valtion velan kasvun
taittaminen vaatisi kolmen miljardin euron lisäsäästöjä, joista puolet
koottaisiin menoleikkauksilla ja puolet veronkorotuksilla.
Valtiovarainministeri Urpilainen kuitenkin väläytti valtion velkaantumisen
taittamisen aikatavoitteen harkitsemista uudelleen.
Demarit
ja talouskriisi – Tyhmyri
Urpilainen ja järkevä talouspolitiikka
Jos se
vaakkuu kuin ankka ja vaappuu kuin ankka...- Hannu
Visti
Tuleeko
poliittinen riski takaisin valtionyhtiöihin? – TalSa
Poliittinen valta voi tehdä paluuta valtion
yritysomistuksiin. Mitä tämä merkitsisi sijoittajien kannalta? Pitääkö valtion
ylipäänsä omistaa pörssiyhtiöitä?
Nyt
leikkauksia vihataan - hyvä niin – Henri
Myllyniemi / US
Ehdottaako
Jutta Urpilainen finanssipoliittisen lain rikkomista?
– Sami
Miettinen / US
Lisää
enteitä asuntomarkkinoille – Tyhmyri
Asuntolainan saajat vähissä
Italian
työllisyys ja teollisuuden kehitys – Tyhmyri
Todelliset luvut kuin painajaisesta
DATA
Asuntolainakannan kasvu pysähtyi joulukuussa
2013 – Suomen
Pankki
Bruttokansantuote supistui yhden prosentin
vuonna 2012 – Tilastokeskus
Kotitalouksien rahastosijoitukset suurimmat
neljään vuoteen – Suomen
Pankki