News Links: Draghi – If fiscal policy becomes hawkish, monetary policy will be dovish

Europe

• Greg Mankiw’s Blog: The Draghi Deal

  If I understand the news coming out of Europe correctly, the new head of the European Central Bank is offering a simple deal: If fiscal policy becomes hawkish, monetary policy will be dovish. In other words, as government spending is cut to put European governments on a sounder financial footing, monetary policy will do its best to ensure that any adverse impact on aggregate demand is kept to a minimum.

• ECB’s Draghi: We need fiscal union, not bank intervention – Telegraph

  Mario Draghi, the president of the European Central Bank, signalled on Thursday that the bank does not plan to prop up bond markets and urged governments to move towards fiscal union to resolve the debt crisis.

• A Euro Crisis Deal Emerges – WSJ.com

  European Central Bank President Mario Draghi signaled the bank could ramp up its role battling the debt crisis if euro-zone governments enforce tougher deficit cutting-suggesting outlines are emerging of a deal that investors have been clamoring to see happen.

• Angela Merkel vows to create ‘fiscal union’ across eurozone | Business | guardian.co.uk

  German chancellor tells Bundestag she is determined to push for treaty changes at next week’s European Union summit

• Merkel shuns ECB role in favour of budget caps to stem crisis | Investing | Financial Post

  German Chancellor Angela Merkel is set to snub investor pleas to back an expanded European Central Bank role in solving the debt crisis, as she pushes her demand for tighter economic ties in Europe as the only way forward.

• Nicolas Sarkozy promises no eurozone member will default – Telegraph

  Nicolas Sarkozy pledged that no other eurozone country will be allowed to default in a passionate speech aimed at shoring up Europe’s shattered markets.

• You are all wrong, printing money can halt Europe’s crisis – Telegraph Blogs

  This is a monetary crisis, caused by a jejune central bank that aborted a fragile recovery by raising rates earlier this year, allowed the money supply to collapse at vertiginous rates in southern Europe, and caused a completely unnecessary recession – and a deep one judging by the collapse in the PMI new manufacturing orders in November. Needless to say, drastic fiscal austerity is making matters a lot worse. You cannot push two-thirds of the eurozone into synchronized fiscal and monetary contraction without consequences.

• Dow could surge 2,000 points if euro crisis resolved: Rosenberg | Trading Desk | Investing | Financial Post

  On Thursday, noted bear David Rosenberg went on Bloomberg TV to talk about what’s been happening to markets lately. Mr. Rosenberg was joined by TCW chief strategist Komal Sri-Kumar, who said on the show that he predicted a 2,000 point surge in the Dow if the eurozone crisis was resolved. So what was Rosenberg’s response when asked if we could see such a massive rally? "You could! You could!"

• Was the Fed Swap-Line Decision Leaked on Monday? – MarketBeat – WSJ

  Apparently the Fed’s decision was made on Monday (another piece of evidence arguing against an imminent bank collapse last night, incidentally). Tim Backshall, credit strategist at Capital Context, posted a chart of the market action on Monday, when stocks rallied hard for no apparent reason on decent volume.

• Is Anything Better Yet? – Tim Duy’s Fed Watch

  Bottom Line: Central banks took a step in the right direction. But nothing in Europe is close to be solved by that action. We are still closer to the beginning of this mess than the end.

• Slovakia: not so flinty after all | beyondbrics | FT.com

  The country’s state-run hospitals were functioning under a state of emergency on Thursday after more than 1,200 doctors walked out rather than accept a government proposal of a €300 a month salary increase. Unions are holding out for an increase of about €700.

• Why Do Foreign Banks Need Dollars? – NYTimes.com

  The simple answer is that foreign banks really like the things that dollars can buy. They liked investing in American government debt, and lending money to American corporations, and most of all they liked buying American mortgages and all manner of crazy investments derived from those mortgages.

• French Bond Yields Decline Most in 20 Years, Spanish Debt Rises on Auction – Bloomberg

  France’s 10-year yields fell the most since 1991 as the nation sold 4.3 billion euros ($5.79 billion) of bonds due between 2017 and 2041. Spanish notes rose for a fourth day as it auctioned 3.75 billion euros of securities, the maximum target. Italy’s 10-year yields fell below 7 percent for the first time in a week as European Central Bank President Mario Draghi signaled the ECB may do more to fight the crisis as long as governments push the euro area toward a fiscal union.

UK

• BBC News – RPI and CPI gap to cost public sector pensioners more

  Public sector pensioners are expected to lose thousands of pounds more due to the increasing divergence between different measures of inflation.

• Public pensions: switch from RPI to CPI declared ‘lawful’ by the High Court – Telegraph

  Government changes in the way annual public sector pension increases are calculated using CPI rather than RPI have been declared lawful by the High Court.

• One in four households suffer from fuel poverty – Telegraph

  A quarter of households in England and Wales are suffering from fuel poverty following large increases in energy bills, it emerged last night.

Housing

• Case Shiller Home Price Index September

  Home prices fell 3.59% in September, according to the S&P Case-Shiller index. That’s better than the 3.78% decline seen the month before, but notably worse than the 3.00% decline that analysts had expected.

• Gingrich Backed Freddie Mac in 2007 Interview – WSJ.com

  Former House Speaker Newt Gingrich touted the virtues of Freddie Mac’s business model in an interview published by the company in April 2007, remarks that contrast with the candidate’s recent statements that he had warned the company of impending financial disaster.

• Chase Decides Not To Evict 103-Year-Old Woman After Deputies & Movers Refuse To Help – The Consumerist

  According to people familiar with the situation, the house had been paid in full but at some point a family member took out a loan against the house and didn’t make payments. Family members say they have tried to pay Chase and the matter eventually ended up in court, where a judge ordered the eviction of the woman who has lived through World Wars.

• Australia housing market in danger, says Keen – MarketWatch

  Australia’s housing market is flashing warning signs of a major crisis, with data release earlier this week of slumping construction starts a replay of conditions in the U.S. shortly before its real-estate crash, according to noted scholar and financial author Steve Keen.

• Massachusetts Announces First Comprehensive Lawsuit Against Major Banks « naked capitalism

  The Massachusetts Attorney General has announced a major lawsuit against the biggest banks in the foreclosure game, namely Bank of America, JP Morgan, Citigroup, Wells Fargo, GMAC (now Ally) as well as MERS and its parent MERSCorp.

Technology

• S&P Cuts H-P Rating by Two Notches – WSJ.com

  The company’s corporate credit rating was lowered to triple-B plus, which is three levels into investment-grade territory. The ratings outlook is stable, reflecting expectations that H-P’s operating trends and financial policies will sustain debt protection near current levels.

• Zynga confirms plans to raise up to $1.15B at $6.99B valuation and start IPO roadshow | VentureBeat

  Zynga plans to raise around $850 million to $1.15 billion at a $5.9 billion to $6.99 billion valuation in an initial public offering that will be priced on Dec. 15 and begin trading the next day.

• Carrier IQ: How To Find It, And How To Deal With It | TechCrunch

  Carrier IQ is capable of tracking what apps you’re running to where your phone is to what buttons are being pressed – it sounds scary, but Carrier IQ claims that collecting that information ultimately helps end-users.

• Carrier IQ: Your phone’s secret recording device – CNN Money

  a 17-minute YouTube video showing how the software secretly runs on his HTC EVO 3D Android phone and logs every key press, every text, and the full URL of every website he visits. It recorded that data even from websites that use security encryption designed to prevent that kind of tracking.

• Google Eyes Amazon on Shipping – WSJ.com

  Google Inc. is aiming to challenge the e-commerce supremacy of Amazon.com Inc. by diving deeper into the fast-growing world of Internet retailing. The Web-search giant is in talks with major retailers and shippers about creating a service that would let consumers shop for goods online and receive their orders within a day for a low fee, said people familiar with the matter. The effort is a risky one, and would escalate Google’s budding rivalry with Amazon, which has been riding the success of its $79-a-year Amazon Prime program.

• Google: Parked Domains, Scraper Sites Targeted Among New Search Changes

  In what’s now to be a monthly update on search changes, a new Google "Inside Search" blog post today tells us that life is getting tougher for those with parked domains, life may get better for those plagued by scraper sites and those hoping to "push down" negative listings may have a tougher challenge.

• Google in Talks with Retailers to Take on Amazon [REPORT]

  Google is talking to major retailers about a new plan to undermine Amazon by giving consumers who shop on the web an option to receive their orders within 24 hours for a low fee, according to a report. Google has pitched the idea to Macy’s, Gap and OfficeMax, among others, according to The Wall Street Journal, which cited "people familiar with the matter."

Other stories

• winterspeak.com: From the comments: technical details on MMT

  A country that runs a fiat currency doesn’t "borrow", it prints and unprints money whenever it spends and taxes. If it issues bonds, it is to change the term structure of extant pre-printed currency, not to print more, or "sterilize" outstanding money. This is technically not true. Technically, the central bank is the currency issuer, while the Treasury is just a user like everyone else. So now the question becomes, to what degree is the central bank part of the Government

• BBC News – India’s growth rate drops to slowest in two years

  The Indian economy grew at its slowest pace in two years, as the manufacturing and mining industries suffered.

• A Drug That Wakes the Near Dead – NYTimes.com

  A surprising drug has brought a kind of consciousness to patients once considered vegetative – and changed the debate over pulling the plug.

• The Associated Press: UN: Syria in a state of civil war

  Syria has entered a state of civil war with more than 4,000 people dead and an increasing number of soldiers defecting from the army to fight President Bashar Assad’s regime, the U.N.’s top human rights official said Thursday.

• Bruce Boudreau hired by struggling Anaheim Ducks just days after getting fired by Washington Capitals – NY Daily News

  Bruce Boudreau is back in the NHL coaching ranks less than three days after being fired in Washington, but it comes at the expense of Randy Carlyle’s job in Anaheim. The Ducks fired Carlyle, who guided the franchise to its first and only Stanley Cup in 2007, after Wednesday night’s 4-1 win over the Canadiens.

• Why Don’t They Like Mitt? | Swampland | TIME.com

  The flips and flops have been justified at times-he is against ethanol subsidies this year-subtle at times, egregious at others. But the sum Romney’s reversals has created a problem of trust in a party of passion. It is entirely possible that he’ll still win the Republican nomination.

• 6 Shocking Revelations About Wall Street’s "Secret Government" | Economy | AlterNet

  Top officials willfully concealed the true extent of the 2008-’09 bailouts from Congress and the public.