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Wednesday, January 16

16th Jan - US Close: Cyprus, US macro




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Roundups and Commentary
Markets – Between The Hedges
The Closer – alphaville / FT

Commentary – TF Market Advisors 
Tomorrow’s Tape: Intel Earnings, Jobless Claims, China’s GDPWSJ
Morning Briefing (Asia): US Data Remains Upbeat – BNY Mellon
US: V-Shaped Stock Recovery - But Rates And Credit Ain't Buying It – ZH


EUROPE
The Coming Cyprus Challenge for the Euro AreaPIIE
First, the clock is ticking as the Cypriot government has announced it only has financing through March 2013. No one, however, should expect a deal much before then. Second, Cyprus’s financial problems derive largely from its oversized banking system at more than 700 percent of GDP… But that is just the start of the problems.

German views on aid for CyprusBruegel
After the Cyprus’s application for EU aid in June 2012, the negotiations on the programme are now getting concrete. The discussion in Germany about possible aid that is estimated between EUR 12 and 17.5 billion for the period 2013-2016 is focusing on the Cypriot financial sector which doesn’t enjoy a good reputation. In the German media, Cyprus and its banks are widely seen –rightly or wrongly - as a tax haven and a money-laundering base.

We don’t want your moneyNordea
Banks will have the first chance to repay the 3-year money borrowed from the ECB on 30 January. Early repayments are likely to lead to expectations that excess liquidity would fall notably, giving rise to pricing of higher short rates. However, despite the repayments, plenty of excess liquidity will most likely remain, keeping short rates very close to current levels.

Markets Hub: Another European Grand Compromise Unwinding?WSJ
Europe's agreement last summer to allow banks to directly tap bailout funds for recapitalizations, is coming under fire.

ECB’s Nowotny Doesn’t Expect Currency War Despite Global SlowdownWSJ
nor does he see the euro on an upward trend over the long term.

A Breach in the Eurozone DikeProject Syndicate
kirjoittanut Ashoka Mody
Throughout the crisis, it has been widely assumed – at least so far – that the the eurozone core would remain solid, and would continue to write the checks for the periphery’s distressed governments and banks. But, while all eyes have been on the European periphery, has the core been cracking?

Stable AAA Gives Scant Relief on Imbalances, Katainen SaysBB

Swiss National Bank Still Has Its Work Cut OutWSJ
The recent sharp fall in the value of the Swiss franc against the euro certainly suggests that the central bank’s strategy of capping the franc’s rise has been successful. But the strategy has left the Bank with an unwelcome legacy of euro-denominated reserves.

UNITED STATES
Citi On The Debt Ceiling: "First Complacency, Then Horror" ZH

Who said what, when? An unofficial guide to Fed speak on QE3 MacroScope / Reuters

Fed’s Kocherlakota Doesn’t See Structural Problem in Job Market - WSJ


  BANKS
  JPMorgan
4th Quarter Profit Jumps 53% to $5.7 Billion – DealBook / NYT
Quarterly profits rise 53 percent – Reuters
53% Earnings Increase as Mortgage Fees Rise – BB
Beats Thanks To Ongoing Loan Loss Reserve Releases – ZH

  JPMorgan ‘London Whale’
Task force arrives at same conclusion as JPM chairman and CEO – alphaville / FT
Did the CIO have a Kodak moment? Like, literally? – alphaville / FT
The London Whale, an oral history – alphaville / FT
JPMorgan Report on Trading Loss Takes Aim at Top Executives – DealBook / NYT
How does JP Morgan respond to a crisis? – Felix Salmon / Reuters
The Whale and the P&L (and the RWA) – alphaville / FT
The CIO curve trade that never was – alphaville / FT
Markets Hub: London Whale Lessons – WSJ

  Goldman Sachs
Beats On Solid Top Line Results – ZH
Profit Soars to $2.89 Billion in 4th Quarter – DealBook / NYT
Goldman Profit Blows Through Expectations – DealBook / NYT
Earnings soar on revenue gains, compensation cuts – Reuters
Profit Beats Analysts’ Estimates on Investments – BB
Reports Earnings Per Common Share of $14.13 for 2012 – BB
Pay Pool Expands 6% as Employee Base Shrinks – BB
We’re back, too – alphaville / FT

  BNY Mellon
Profit Rises 23% as Stock Market Boosts Assets – BB
Fourth-quarter profit climbs 23 percent – Reuters

  MACRO NUMBERS
U.S. Industrial Production Rises 0.3% on Equipment Demand – BB
Fed: Industrial Production increased 0.3% in December – Calculated Risk
Industrial Production Increased Moderately In December – The Capital Spectator
Capacity Utilization and Manufacturing Perk Up – PragCap

No Inflation In December BLS Says – ZH
No, inflation still isn't a problem. – Wonkblog / WP
Key Measures show low inflation in December – Calculated Risk
Factory, price data give hopeful signs for economy – Reuters

Fed Beige Book: District-by-District Summary of ConditionsWSJ
Fed Sees Economy Picking Up Across U.S. in Beige Book Survey – BB
Fed's Beige Book: Economic activity expanded at "modest or moderate" pace – Calculated Risk
  
Builder Confidence unchanged in January – Calculated Risk
NAHB Housing Index Weaker Than Expected – Bespoke

ASIA
China’s 4Q GDP Growth Seen Rising To 7.8%The Diplomat
Sustained stronger growth in China requires a turnaround in household spending, which remains unusually low as a share of China's GDP.

OTHER
Daily Quickie – HistorySquared

Global Alpha’s Macro, Rates & FX Strategy: Views for 2013Nordea (pdf)
Summary here

National balance sheetsButtonwood / The Economist
Morgan Stanley has an interesting (but, alas, privately-distributed) research note on the debt crisis arguing that most developed governments are effectively insolvent.

IN FINNISH
Suomen valtiolla tuplanaaman tukipolitiikkaJan Hurri / TalSa
Suomen valtion tukipolitiikka näyttää ristiriitaiselta. Luottokelvottomien eurovaltioiden tukemiseen on enimmillään luvattu jopa 50 miljardia euroa – jotta työpaikat ja eläkkeet olisivat turvassa. Turun telakka ei saanut tuhannesosaa tuosta tukimäärästä – ja nyt Turun seutu uhkaa menettää satoja työpaikkoja.

Kun työttömyys nousee tarpeeksi suureksi, niin kyllä ne palkanalennukset menevät lävitsetyhmyri

Suomen kestävyysvaje odottaa ratkaisuaEK
EU-komissio julkaisi joulukuussa 2012 päivitetyt tiedot julkisen talouden pitkän ajan kestävyydestä jäsenmaissa. Suomen kestävyysvajeeksi arvioidaan 5,8 prosenttia bruttokansantuotteesta.

Selkävoitto todellisuudestaHannu Visti

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