10th Apr - EU Open: Slovenia, to B or not to B?

Instead of continuously posting the regular links, they are now moved to a permanent page. My standard posts would thus in the future only have article links and my own thoughts. If this is ok with you, fine. If not, drop me a message.

Previously on MoreLiver’s:

Tuesday US Close: Soros, Yen, LTRO

Tuesday US Open: End of EU banking secrecy?

Tuesday EU Open

Current Specials

Special: Bank of Japan

Special: US Employment Report (updated)

Special: ECB Watch

Special: Bailout of Cyprus (updated)

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EUROPE
Which Dominoes Are Next to Fall in Europe? – of two minds

Correspondent David P. provides a list based on a simple but powerful precept: follow the smart money… Slovenia, Portugal, Malta, and then Spain. Though Spain and Italy are considered core E.U. nations, we should probably differentiate between political and financial cores and peripheries. Should a self-reinforcing crisis of liquidity, solvency and loss of trust gather momentum, Italy's debt situation could reach critical mass, regardless of its political status as a core nation. Similar political and financial crises could arise in The Netherlands and France, too, though these crises will probably not be triggered by an exit of core-EU mobile capital.

Cyprus Can Save Itself by Fleeing the Euro – View / BB

Cyprus Losses Spur EU Lawmakers to Bolster Depositor Protection – BB

The European Parliament will seek greater protection for depositors of crisis-hit banks in the wake of the Cyprus bailout as it weighs changes to proposals aimed at taking taxpayers off the hook for future rescues.

Slovenia Must Handle Its Banking Crisis! – PIIE
Sometimes an international bailout is necessary, but for Slovenia only if it manages its banking crisis poorly. The right approach should be to close Nova Kreditna Banka Maribor d.d. The other three big state banks could possibly be restructured, cleaned up, or otherwise closed down as well.

Slovenia Rules Out Bailout; Translation: "Slovenia Bailout Coming Right Up" – Mish’s

Slovenia will solve its problems on its own just like Ireland did, just like Greece did, just like Portugal did, just like Spain did, just like Cyprus did: Under duress, with threats of eurozone expulsion if the nannycrats in Brussels are not pleased.

Spain rating risk driven by deficit, says Moody's – BB

The likelihood that Spain will miss its public deficit target this year leaves its sovereign rating at risk of slipping below investment grade, credit agency Moody's said on Tuesday.

Austria joins Luxembourg for EU bank secrecy talks – BB

Austria will join Luxembourg for talks with the European Union on how to crack down on cross-border tax cheats, Chancellor Werner Faymann said on Tuesday, signaling an easing of Vienna's hardline stance on coveted bank secrecy.

UNITED STATES
Handicapping Labor Data – Tim Duy’s Fed Watch

I had expected that the data flow would argue for the Fed to postpone tapering off QE purchases until late this year.  The Fed seems to have a different view, thinking that the data flow argues for ending QE by the end of this year.  My expectation is that the Fed is being overly optimistic and will find that summer is too early to being tapering off QE.  That seems to be the message from the bond market as well; yields aren't exactly soaring.

Job Openings and Nonfarm Payrolls – Calculated Risk

…it appears job openings leads non-farm payroll at turning points.

 
OTHER
Measuring the clarity of central-bank communication – voxeu.org

Quality, clear communication is a very powerful tool for central banks because it influences expectations. This column presents new research on central-bank communications, using a formal measure of clarity – the ‘Flesch-Kincaid grade level’. The picture is varied: there are significant and persistent differences in clarity over time and across countries. However – and worryingly – the financial crisis is associated with unclear communication for some central banks.