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Friday, December 21

21st Dec - Weekender: Best of the Week

The ending week's best reads, previous edition here.

Previously on MoreLiver’s:

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European Risk Catalysts For The Next Six MonthsZH

Thoughts on the Euro’s Outlook in 2013PIIE
Despite the numerous predictions of its demise, the euro is alive and well at the end of 2012. Indeed, it has again held its value against other currencies during the year,1 confounding skeptics just as it did a year ago. As 2012 comes to a close and the last European Union Council of the year has ended—there have been seven in 2012!—it is time to take stock. As someone who ended 2011 on a positive note for the euro, I am happy to report that the outlook remains positive for 2013.

Surplus to Requirements?WSJ
The European Commission on Tuesday released a special report devoted to euro zone countries with large current account surpluses, Germany in primis, and while it diplomatically refrained from making forceful policy recommendations, it emphatically noted that the weak bank regulations and wage restraint exercised by Europe’s largest economy ineluctably has had significant impact on other members of the currency union.

The euro area’s need for stabilization in historical perspectivebruegel
How often does it happen that countries pertaining to the same economic area are in dramatically different business cycle positions? How severe is the divergence? How persistent is it?

Ifo Business Climate ImprovesCESIFO
Ifo points to further improvementDanske Bank (pdf)
German Business Confidence Rises for a Second MonthBB

What to expect from the EU in 2013Open Europe

Nordic Outlook 20-Dec 2012Danske Bank (pdf)

European Union: Financial Sector Assessment, Preliminary ConclusionsIMF

The Eurozone’s Delayed ReckoningProject Syndicate
Nouriel Roubini: The tail risks of a Greek exit from the eurozone or a massive loss of market access in Italy and Spain have been reduced for 2013. But the fundamental crisis of the eurozone has not been resolved, and another year of muddling through could revive these risks in a more virulent form in 2014 and beyond.

The probability of Greek exit,
Jens Nordvig: Fears of an imminent Greek exit from the Eurozone have subsided, for now. This column attempts to measure the probability of a Greek exit, finding that the changing fortunes of Greek political parties, and the possibility of an early election, mean that the risk of a Greek exit may actually be quite high. It suggests that, despite investors' efforts to measure political risk, a persistent sense of unease about the Eurozone’s future is set to continue into 2013 and that Eurozone financial assets will thus continue to embed significant risk premiums in the coming years.

Euro zone rescuer Draghi faces daunting 2013Reuters
With two short sentences, the head of the European Central Bank took the heat out of the euro zone crisis this year. In 2013 Mario Draghi has to live up to even bigger expectations.

Why Mario Draghi scores AAA on PPPHugo Dixon / Reuters
The ECB boss, though, should not let the plaudits go to his head. Much of the euro zone is in deep recession. If growth doesn’t return, the crisis could enter a new ugly phase and his powers will be sorely tested.

Agenda 2013: the next steps in completing EMUECB
Speech by Jörg Asmussen at Internationaler Club Frankfurter Wirtschaftsjournalisten, Frankfurt am Main, 19-Dec-2012

Implications of Japan’s new government: Another false dawnNordea (pdf)
or read the summary

Bank of Japan Preview: Intense political pressure for more easingDanske Bank (pdf)

BOJ Loosens With Pledge to Review Inflation Objectives: Economy BB
Under pressure from PM-elect, BOJ boosts stimulus again Reuters
The Bank of Japan delivered its third dose of monetary stimulus in four months on Thursday in a prelude to more aggressive action next year, as it faces intensifying pressure from the country's next leader for stronger efforts to beat deflation.

Bank of Japan EasesGlobal Macro Monitor
The policy move was as is expected and not quite the Abe QE that has sparked the massive move in stock market and yen.  The next meeting is big as the Prime Minister Abe will be in power.  The Nikkei is a down about 1 percent on profit taking and the yen a bit stronger.

How soon is now, UK NGDP targeting editionalphaville / FT

GuidanceBank of Canada
Mark Carney, Governor of the Bank of Canada, 11-Dec-2012, Presented to CFA Society Toronto

The Man Who Occupied the Fed: How Charles Evans Saved the RecoveryThe Atlantic
Chicago Fed president Charles Evans has gone from dissenter to intellectual leader in just a year. The future of the recovery might be at stake.

December 2012 Quarterly ReviewBIS
Policy measures and reduced short-term risks buoyed markets (all the files here)

Claudio Borio on the financial cycleFree exchange / The Economist
What is this "financial cycle"? While "there is no consensus on the definition," according to Mr Borio, it can be understood as a sequence of "self-reinforcing interactions between perceptions of value and risk...which translate into booms followed by busts."

(audio) BizDaily: Central Bankers Take Centre-stageBBC (mp3)
Central bankers appear increasingly to be seizing the reins of economic power these days, as the politicians throw up their arms and say - you fix it. Ben Bernanke is setting Federal Reserve interest rates for years in advance, and when the ECB's Mario Draghi says he'll do "whatever it takes to save the euro", people believe him. But is the shift from the politicians to the central bankers really a good thing?

Goldman Sachs: Top Ten Market Themes for 2013The Reformed Broker

CitiFX's 12 Charts Of ChristmasZH

"Momentum Ignition" - The Market's Parasitic 'Stop Hunt' Phenomenon ExplainedZH

FX Comment: Monetary wars ONNordea

NEMO: The Five “Black Snakes” 2013Nordea (pdf)
or the summary

Outrageous Predictions 2013: Extreme complacencySaxo Bank
or direct pdf

Some outliers for 2013alphaville / FT
Deutsche's 13 Outliers For '13ZH

Chief Economist’s Corner – On the threshold of 2013Nordea (pdf)
Financial markets will focus on whether the euro crisis is finally solved, whether the US can get to grips with its fiscal policy, whether interest rates remain at record lows and equity markets continue higher.

My InterviewMoreLiver’s Daily

Nordea Risk Perception Index week 51Nordea (pdf)
Spread compression and decreases in implied vol. Risk premiums likely to continue tightening in beginning 2013, but upside risks remain. (summary)

Things That Make you Go HmmmGrant Williams / ZH

The Ultimate Valuation Matrix For Global StocksZH

Chart Of The Day: From Here To QEternity - Here Come The Central PrintersZH

Business Insider’s 70 Best Charts of 2012PragCap

What Will 2030 Look Like?Above The Market
The National Intelligence Council is composed of the 17 U.S. government intelligence agencies.  The Council’s Global Trends Report has, since 1997, worked with a variety of experts both in and out of government service to examine factors such as globalization, demography and the environment to produce a forward-looking document to aid policymakers in their long-term planning on key issues of worldwide importance.

Google Chairman Says Android Winning Mobile War With AppleBB
Exclusive: Larry Page on GoogleFortune

Gift Giving Guide for the Traders in Your LifeThe Big Picture

Ifon Sinn TE:lle: Tämä räjähtää vielä silmilleTalSa
Saksalaisen Ifo-tutkimuslaitoksen johtaja tukee Suomen vakuusvaatimuksia ja varoittaa euron pelastusyrityksistä.

Keskuspankeissa kaikkien aikojen aikapommiTalSa
Keskuspankkien kokeelliset kriisitoimet vaikuttavat vaarattomilta, mutta pankkien taseissa paisuu kaikkien aikojen aikapommi. Rahakokeiden riskit paljastuvat äkisti, kun yksityinen luottojen kysyntä alkaa taas kasvaa. Silloin keskuspankeilla on edessään vaikea valinta: raju inflaatio tai entistä pahempi velkakriisi.

Vaikeuksien kautta nousuun: Suomi kasvuun vasta 2014Danske Bank (pdf)
Danske Bank: Suomen talous nousuun vasta 2014TalSa

Pankkiunioni tai ei – Suomi kantaa muiden riskejäJan Hurri / TalSa
Edes "aito pankkiunioni" ei vähentäisi euromaiden liikoja velkoja eikä pienentäisi liikoja pankkiriskejä. Rakenteilla onkin Frankensteinin finanssihirviö, jossa riskit on vain tarkoitus ensin pilkkoa ja sitten koota uuteen kokoonpanoon. Suomi saisi taas kantaakseen muiden riskejä – niin kuin kriisitoimissa tähänkin asti.

9 kuukautta rauhaa – sitten euron haavat revitään aukiTalSa
Suomi voi ensi vuonna nousta syksyn suosta maailmantalouden elpyessä. Toivo on kuitenkin pettävää, sillä syynä on eurokriisin välirauha, joka ei ratkaise vääjäämättömiä ongelmia. Lisäksi väliaikaisenkin elpymisen tiellä on muutama merkittävä kysymysmerkki. Näin arvioivat Taloussanomien haastattelemat asiantuntijat.

Suomen valtion toiminta voi loppua rahojen loppumiseen – Ruotsin valtion eityhmyri