21st Oct - ECB's test balloon, China's GDP

Previously on MoreLiver’s:

Credit: A Descent into the Maelström

Monday: ECB begins buying covered bonds

W/E: Weekly Support

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EUROPE

Barroso issues 'Big Blue Book' of achievements – New Europe

There does seem to be a bit of a gap from December 2007 to September 2009 in his speeches. Obviously nothing noteworthy happened in those calm years.

LEAKED: What Happens to Germany if Russia Turns off the Gas – Wolf Street

The threat hangs over the EU. Eurocrats claim no one would be without natural gas. But a leaked report from the German government explains what fiasco it would be.

Borders and budgets could lay Europe low – FT

Gideon Rachman: Unrest over sovereignty issues risks pushing EU to the point of no return

Two years after Mario Draghi’s ‘whatever it takes’ moment, the Eurozone is once again staring into the abyss – Europp / LSE

The best – and possibly only – option for European governments is to adopt a strategy of public investment in infrastructure, human capital, public health and welfare. Crucially, there should be a balance between fiscal expansion and fiscal consolidation policies based on the state of individual economies, not on the blind application of one or the other principle across the entirety of the single currency area.

Germany's Schaeuble warns of global asset price bubbles – Reuters

German Finance Minister Wolfgang Schaeuble warned on Tuesday that higher public debt and surplus levels of global liquidity could be setting the stage for new asset price bubbles.

 

  EUROPEAN CENTRAL BANK

Why would the ECB buy corporate bonds? – FT

ECB Said "Looking To Buy Bonds", Halts Futures Slide – ZH

A Closer Look Why Futures Bounced – ZH

FT Rejects Reuters Unsourced Trial Balloon About ECB Buying Corporate Bonds – ZH

 

UNITED STATES

The Ultimate Carry Trade: US Banks Buying Treasuries – Marc to Market

Sometimes this regulatory inducement to hold more government bonds is called financial repression, but this is unnecessarily pejorative.  The banks have too much deposits relative to the effective demand for loans.  They only have used around half of the new growth in excess deposits to buy government bonds.  This does not represent any crowding out.

How Much Will Student Debt Drag on Housing? – WSJ

Those with college education student loan debt more likely affects the timing of homeownership than people’s eventual attainment of it

ASIA

Update: moles still largely unwhacked in China – FT

If there’s one sure bet in China it’s that money, uh, finds a way and that shadow banking (or whatever less objectionable name you wish to apply) will do its damndest to help.

  Q3 GDP 

China: GDP growth slows slightly in Q3 but not enough for more stimulus – Danske Bank

Forget stimulus – low growth in China is here to stay – TradingFloor

China: GDP, Industrial Production Beat; Retail Sales Miss – ZH

Economists React: China’s Slowing Growth Is OK – For Now – WSJ

No hard-landing for China's economy for now – Sober Look

China's growth slowest since global crisis, annual target at risk – Reuters

World Bank: accelerate reforms, not rely on fiscal and monetary policy to drive growth – Reuters

Conference Board: China Growth May Slow Sharply From 2020 – BB

Why Stimulate? Rising Chinese Incomes Are Defying GDP Slowdown – BB

China’s GDP Growth Bolsters Case for Stimulus Restraint – BB      

OTHER

Daily Central Banks – WSJ

Hilsenrath’s Take: Fed Brings a Culture War to Wall Street * Fed to Banks: Shape Up or Risk Breakup * ECB Mulls Corporate Bond Buys * China GDP Growth Rate Is Slowest in Five Years * BOE’s Cunliffe Says Bankers Are Overpaid

Daily Macro – WSJ

China Slows Smoothly. So Far.

All the Markets Need Is $200 Billion a Quarter From the Central Bankers – BB

The central-bank put lives on. Policy makers deny its existence, yet investors still reckon that whenever stocks and other risk assets take a tumble, the authorities will be there with calming words or economic stimulus to ensure the losses are limited.

FINNISH

EU huomauttamassa viittä jäsenmaata – Suomi säästyy – TalSa

Varoitus ensi vuoden budjetista on lähdössä viidelle jäsenmaalle. Joukossa ovat euroalueen jättiläiset Ranska ja Italia.

  TALOUSVIISAAT

[170min] Valtiovarainvaliokunnan kuuleminen Suomen taloustilanteesta – YLE

Eduskunnan valtiovarainvaliokunnan julkinen kuulemistilaisuus Suomen talouden tilanteesta ja näkymistä liittyen vuoden 2015 valtion talousarvioon. Tilaisuudessa puhuvat professorit Sixten Korkman ja Pertti Haaparanta, ylijohtaja Juhana Vartiainen VATT, tutkimusjohtaja Markku Kotilainen ETLA sekä valtiotieteiden tohtori, dosentti Jaakko Kiander.

Talousasiantuntijat ehdottavat infrahankkeita ja velkaelvytystä – YLE

Valtioiden velkaisuus, investointien vähyys, kysynnän rakenteellinen puute ja työvoimatarjonnan väheneminen rasittavat länsimaiden ja lisääntyvässä määrin myös Aasian maiden talouksia.

Talousprofessori: ”Euroalueen talouspolitiikka on tuhonnut yritysten vientimarkkinat” – PS

Talousviisas murjoo kokoomuspoliitikon velkakattoesityksen: Täysin idioottimaista – YLE

Kokoomusedustaja Sampsa Katajan ehdotus niin sanotun velkajarrun käytöstä Suomessa saa talousasiantuntijoilta täystyrmäyksen.

Talousasiantuntijat: Suomella potentiaalia hyväänkin talouskasvuun – MTV

Talousasiantuntijat arvioivat, että seuraavan kymmenen vuoden aikana Suomen talous kasvaa 1-2,5 prosentin vuosivauhdilla.

Asiantuntijat varoittavat talouden matokuurista – TalSa

Valtiovarainvaliokunnan kuultavana olleiden talouspolitiikan asiantuntijoiden mukaan rajujen kertasäästöjen malli ei sovi Suomen heikkoon taloustilanteeseen.