Here
are the ”best” from my posts of the ending week. Last week’s edition here.
Key issues:
Europe managed to agree on the second pillar of the banking union: who and how manages what
to do with the failed banks, and more importantly, who pays for them. The deal
is deemed to be complex, limited in scale and scope and thus ineffective.
In US, the Federal
Reserve announced it will begin tapering its monthly asset purchases in
January. Market reactions were muted, meaning that this time around the Fed had
managed to guide the expectations and provide softer forward guidance in
exchange.
Many institutions have
published their monthly and annual reports, which take a look at the 2013 in
review and try to preview the next year ahead. It looks like the current year
is now over, with only limited “further reactions to taper” on the agenda. Time
for holidays, then.
EUROPE
Can we move beyond
the Maastricht orthodoxy? – voxeu.org
The Eurozone must be
reformed to avoid the risk that the EU itself could be destroyed by political
conflict among the winners and losers. 2014 is a window of opportunity for
seriously re-considering the Eurozone's functioning and for moving away from
the 'Maastricht orthodoxy'.
The
EU’s soft power and the big carrot – John Lloyd / Reuters
Europe uses “soft power,” defined as the power to
influence other countries without force or money by drawing people to it who,
by “admiring its values, emulating its example, aspiring to its level of
prosperity and openness -- want to follow it.”
REFORM
CONTRACTS
Merkel urges EU treaty change in first speech of new term – Reuters
Merkel sees progress in overcoming Europe's crisis – Reuters
Merkel Speech: Chancellor Urges Reforms to Preserve Euro – Spiegel
EU summit: Will anyone be signing contracts? – Brussels blog / FT
Merkel's reform contracts pushed back until October – euobserver
GERMANY
Each stage of the
euro crisis has increased the risks Germany faces – The Independent
Satyajit Das: The German-led strategy shows little progress and is
unlikely to resolve the crisis
Germany: Companies end the
year in festive mood – Nordea
IFO: Lift-off for Germany and the DAX – TradingFloor
Germany's December business
sentiment exudes welcome cheer – TradingFloor
BANKING UNION
EU Banks Shed $1.1
Trillion in Assets as Debt Rules Bite – BB
Lenders reduced assets weighted for risk by 817 billion euros ($1.1
trillion) between December 2011 and June 2013, the European Banking Authority,
the bloc’s top banking regulator, said in a report. From EBA: EU-wide
transparency exercise and Risk
dashboard.
Europe faces moment of truth on banks,
with flawed defences – Reuters
Sharp rise in banks buying own governments' bonds * Cheap ECB loans
gives banks windfall profit on state debt * Politicians' attempts to break
"doom loop" faltering
Europe’s Cypriot Solution for Failing
Banks
– PIIE
The new rules—known as the Bank Recovery and Resolution Directive
(BRRD)—make clear that the treatment of Cypriot banks earlier in 2013 set a
precedent.
The
German banking union – Open Europe
A deal is positive and necessary. That said, the process remains
incredibly complex and still seems highly national or intergovernmental. If
there was a serious failure of a large cross border bank, such as we saw with
Dexia, would the process really be any smoother or simpler than last time
around?
Banking union: the limits of the backstops deal – Brussels blog / FT
The European banking union is a disappointment – The A-list / FT
A Helpful Guide to Banking Union – WSJ
EUROPEAN
CENTRAL BANK
Voting
rights at the ECB: New club rules – The Economist
Germans will soon have another reason to fume about the euro
Euro area deflation monitor – Danske Bank
Some differences
between countries. However, all countries except Germany are placed below zero in the deflation index,
which follows as the low inflation is broad based. For Germany the ranking above zero should be temporary as
inflation is set to fall in December.
Italy’s president fears violent insurrection in 2014 but
offers no remedy – The Telegraph
Spanish Bad Loans
Jump To New Record As Banks Come Clean Over Mortgage Defaults – ZH
UNITED STATES
Fed Watch – MoreLiver’s
Special: After Fed's Taper – MoreLiver’s
OTHER
Trade
Ideas for 2014 – Global Macro Trading
Goldman's
Top 100 Charts Of 2013 - Part 1 – ZH
Goldman's
Top 100 Charts Of 2013 - Part 2 – ZH
Global Update - Happy
New Year 2014 – Nordea
FX Forecast Update
December – Danske Bank
ECB deposit cut to weigh on EUR in 2014
Emerging Markets
Briefer - December 2013 – Danske Bank
Further monetary policy divergence in 2014
Nordic Outlook December 2013 – Danske
Bank
PIMCO’s
MONTHLIES
Cyclical Outlook for Europe – PIMCO
Cyclical Outlook: Synchronized Optimism – PIMCO
Cyclical Outlook for Asia: Growth Is Stabilizing but Not Stellar – PIMCO
UK Perspectives: A Much
Better Dilemma – PIMCO
Australia Perspectives: Australia
Inc. – PIMCO
European Perspectives: Muddling Through – PIMCO
Global Central Bank Focus: Coal in the Fed’s Stock-ing – PIMCO
Global Credit Perspectives: Settling In – PIMCO
Long/Short Equity Strategy: Pick Your Spots – PIMCO
SAXO’S
OUTRAGEOUS PREDICTIONS
US deflation to again
top FOMC agenda – TradingFloor
Nasty hangover for tech's ‘Fat Five’ – TradingFloor
Soviet-style economy makes a comeback – TradingFloor
Brent crude to drop to USD 80/barrel – TradingFloor
CAC 40 drops 40% on French malaise – TradingFloor
FINNISH
Tämän takia Suomeakin
hoputetaan pankkiunioniin – Jan
Hurri / TalSa
EU-komissio,
EKP ja finanssikeskusten suurpankit haluavat euromaiden pankkiunionin valmiiksi
mahdollisimman pian. Ne haluavat, että yhteinen tukipiikki on valmiina
avattavaksi, kun pankkien pääomia on taas paikattava. Mutta miksi Suomi hosuu
pankkiliittoa euromaiden eikä Pohjoismaiden kanssa?
Suhdannekatsaus
joulukuu 2013 – Danske
Bank
Suomi elpyy
rakenteellisten ongelmien varjossa – Handelsbanken
Suhdannekatsaus
2/2013 – Valtiovarainministeriö