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Thursday, December 12

12th Dec - Bail-ins & Risky Sovereigns



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EUROPE
Dismantle the euro, says Nobel-winning economist who once backed currency unionThe Telegraph,  The Daily Mail
A leading economist who once argued for the creation of the euro now claims the single currency should be abandoned as it is fuelling unemployment and dividing Europe.

Spain's Catalonia to Hold "Independence Referendum" November 2014Mish’s
Madrid Vows to Block Vote

2014 European Elections: There will be no anti-EU wavePresseurop
Anti-European parties are unlikely to achieve a major breakthrough in in European elections next May. However, this will do little to mitigate Europeans’ disaffection with a parliament that they perceive as remote from their concerns.

Criticism of Germany’s CA surpluses largely unfoundedDB Research

Is the Euro the New Yen?WSJ

  SLOVENIA
Fallen star Slovenia to reveal cost of bank clean-upReuters
Judgment day for SloveniaReuters
Slovenia’s bank stress tests – in the clear?FT
Slovenia Bailout Risk Eases as Bank Rescue Cheaper Than SeenBB
Slovenia this morning released the results of its bank stress test, which showed a €4.8bn (13% of GDP) hole in its banking sector – towards the top end of expectations. The government has said it can cover this without external aid and will inject €3bn into Slovenia’s top three banks.

  BANKING UNION
EU set to fast-track rules hitting bank creditorsReuters
Bondholders and large depositors in a failing European bank face losses from the start of 2016, EU negotiators agreed on Wednesday, in a deal to spare taxpayers from further bailouts.

ECB's Asmussen concerned over complex bank resolution rulesReuters
The planned rules for winding down failing banks in the euro zone seem overly complex and could slow down the process.

Banking union – where do we stand in the Single Supervisory Mechanism?BOF
Deputy Governor Pentti Hakkarainen of Bank of Finland

  EUROPEAN CENTRAL BANK
Draghi Builds Stress-Test Credibility in ECB Bank ReviewBB
More than 90 percent of economists surveyed by Bloomberg News said that stress tests next year, in the final part of an ECB-led review of the euro area’s most prominent banks, will be more credible than previous exercises

IMF Official Urges ECB to Use Negative RatesWSJ
The IMF wants the ECB to get tough on (low) inflation, and the first thing it could do is to start making European banks pay to store their excess cash with the central bank.

Fans of ECB Quantitative Easing Gain a Strong FriendWSJ
Deutsche Bank chief economist David Folkerts-Landau said that at some point the ECB will likely have to revert to “genuine QE,” amid very weak inflation and stagnant economic activity.

PREs, VSPs and the ECB: a response to Paul KrugmanECB Watchers

Peter Praet Interview with the Financial TimesECB
ECB and the treatment of sovereign debtECB Watchers
FT:  ‘ECB to get tough on sovereign bond risks’Presseurop
ECB Admits Sovereign Bonds Are Not RisklessZH
Praet: the ECB is considering forcing banks to hold capital against sovereign debt, meaning it would no longer be treated as risk-free. He added that such an approach would make “it unlikely that the banks will use central bank liquidity to excessively increase their exposure to sovereign debt.”

Mario Draghi Intro statement, hearing before European ParliamentECB

Benoît Cœuré Interview with Die ZeitECB

Monthly Bulletin, December 2013ECB
Statistics Pocket Book, December 2013ECB


UNITED STATES
Unprecedented AusterityKrugman / NYT

Volcker Rule Looks Reasonable, Bank Analysts SayWSJ

  FEDERAL RESERVE
Will Low Inflation Delay The Taper Decision?The Capital Spectator

It’s all been about QEalphaville / FT
Krugman pointed out that whether a government finances itself through bond purchases, which are later bought by the Fed, or whether it prints money directly, makes no difference.

Fed Message Muddled If Jobless Aid ExpiresBB
More than 2 million unemployed Americans are at risk of losing their jobless benefits over the next three months. That threatens to undermine the unemployment rate as an anchor for future Federal Reserve action.

Why Do Measures of Inflation Disagree?FED
Inflation as measured by the personal consumption expenditures price index is near historical low levels, below the Federal Reserve’s 2% longer-run goal. Another common inflation measure, the consumer price index, is also historically low, but remains closer to 2%. The recent gap between these two measures is due largely to the cost of shelter, which makes up a larger proportion of the CPI consumption basket. Based on history, the gap between the two inflation measures should close at a rate of 0.05 percentage point per month.

  STANLEY FISCHER
Central Station: Yellen and Fischer Likely on Same Page – WSJ
5 Things You Need to Know About Stanley Fischer – WSJ
Fischer Seen Bringing Crisis-Fighting Skills to No. 2 Fed Post – BB
Four reasons Stan Fischer makes sense for the Fed – WaPo
Fischer Poised to Be Picked as Fed's No. 2 – WSJ
How Stanley Fischer Became a Central-Banking Legend – Businessweek
Stanley Fischer to the Fed? – The Money Illusion

  MACRO NUMBERS
Retail Sales Beat Modest Expectations – ZH
Retail Sales increased 0.7% in November – Calculated Risk
November Advance Retail Sales Beat Expectations – dshort
Solid U.S. retail sales boost economic outlook – Reuters


OTHER
Nobel prize-winning economists take disagreement to whole new levelThe Guardian
Robert Shiller says mismatch between Eugene Fama's findings and theories must make him feel like a priest who has discovered God does not exist

The Downfall of John Taylor AICIO
Generations of hedge funds rose and fell; FX Concepts endured. Then, the unshakeable disintegrated. So how did John Taylor’s steady reign end in ruin?

Investment Fads and Themes, 1996-2013The Reformed Broker

EMEA WeeklyDanske Bank

World's largest hedge fund uses social media for analysisZH
Bridgewater's end goal: to be "able to track the economy on a day-to-day basis."


FINNISH
Teollisuusjohtaja: Yritykset eivät investoi Suomeen suuren maariskin takia – Verkkouutiset

  SUOMEN PANKKI
Liikanen: Julkisen talouden kestävyys edellyttää rakenneohjelman toimeenpanoa – Suomen Pankki
Euroopan keskuspankin kuukausikatsaus 12/2013 – Suomen Pankki
Euro ja talous 5/2013: Talouden näkymät – Suomen Pankki
Talouden rakenneuudistukset ja julkisen talouden kestävyys – Suomen Pankki
Suomen Pankki: Talous piristyy vasta 2015 – Verkkouutiset
Suomen Pankki ennustaa työllisyyden paranevan vasta vuonna 2015 – HS
Suomen Pankki: Toipuminen viivästyy – KL
Keskuspankkien toimet ja epävarmuus elpymisestä pahimmat uhat – TE

  TAPIOLAN SUHDANNEKATSAUS
LähiTapiola laskee Suomen vuoden 2014 BKT:n kasvuennustetta – Sijoitustalous
LähiTapiolan suhdannekatsaus 2/2013 – Sijoitustalous
Jari Järvinen: Suomen teollisuustuotanto on painunut vuoden 2003 tasolle – AP
Karu ennuste: "Suomen vientisektori ei välttämättä toivu totutulla tavalla" – TE

  FORTUMIN SÄHKÖVERKKO
Energiamarkkinavirasto: Fortumin verkkojen uusi omistaja pelaa valtion valvonnassa – YLE
Vapaavuori: Fortumin verkkojen myynti turvallinen ja taloudellinen ratkaisu – Verkkouutiset
Katainen: yli 80% sähkönjakeluverkosta on jo nyt yksityisillä yrityksillä – Verkkouutiset
Kokoomusministerit: Fortumin myynti hyvä ja turvallinen ratkaisu – IL

  ASUNTOMARKKINAT
Asuntojen ”isojako”: ”Missä ovat hintoja ja vuokria alentavat tekijät?” – US
Asuntovelallinen, nyt tarkkana – Suomen Pankilta vakava viesti – US
Välittäjät auttavat nyt jopa lainan haussa – HS