EC green light to Rajoy’s fiscal plans makes Spanish sovereign bailout more likely
I am going to try a different format for the daily today because I have a number of foreign language articles. This time, I am going to give a brief synopsis of each article rather than just having a main talking point at the outset. This is a more time-consuming way of putting up the links but I think it’s important to highlight more of the salient points in each article. So I hope you like the change.
Bruselas valora los recortes de Rajoy y los planes para los dos próximos años | Economía | EL PAÍS
Rajoy has recived a green light from the European Comission for his fiscal plans for the next two years. To me this is significant because it says that Spain can easily get a sovereign bailout using the existing fiscal template and that the MOU would not mean a whole new set of terms for Spain. In my view that makes a sovereign bailout likely.
US probe into bank manipulation of silver markets set to be dropped – Telegraph
The silver probe is likely dead.
BBC News – Indonesia’s economy: Domestic demand boosts expansion
Indonesia does not depend on export volume for growth and that is beneficial to continued strong numbers. Nonetheless, the country does have commodity linkages to China.
House prices fall 0.6%, says Halifax | Money | guardian.co.uk
House prices are about where they were in 2009 in Britain.
Germany’s Weidmann draws on diplomatic skills in ECB fight | Reuters
Reuters covers the Bundesbank President who is on the other side of Draghi’s monetisation call. Weidmann is the last real opposition that Draghi has to his master plan.
Las insolvencias crecen un 28,6% y marcan récord – CincoDías.com
Record numbers of insolvencies in Spain as the number has increased by 28.6%.
New car sales jump in July | Business | guardian.co.uk
British car sales were better in July but they are still near multi decade lows.
Federal Reserve says U.S. bank lending conditions easing | Reuters
We know that auto loans are more lax. here is further evidence that the credit cycle is well advanced in the US.
Finland risks recession, says finance minister | Reuters
Another warning sign that the recession in the periphery is going to negatively affect the core.
Les Pays-Bas empruntent à nouveau à des taux négatifs – lesoir.be
Negative short yields for the Netherlands again.
More 2008 Obama Voters Than McCain Voters Switching Sides
Annaly Capital May Be "In a Pickle" – Barrons.com
Renditevergleich: Portugal-Bonds schlagen Bundesanleihen – Börse + Märkte – Finanzen – Handelsblatt
Portuguese bonds have returned 28% this year. That’s the most in the euro zone.
Spain, Italy debt extends rally but ECB details key | Reuters
The short end is rallying the most here because Draghi has said the ECB would be buying there. And so 2-year yields have dropped dramatically. This is proof positive that an ECB backstop matters most.
Debt crisis: Troika finds Cyprus ‘in worse state than expected’ – Telegraph
The title says it all. Cyprus will need a bailout.
Nuance takes Siri down to the app level with new voice assistant – Mobile Technology News
Sounds like great mobile technology
Dubious Study Defends SEC Revolving Door « naked capitalism
Yves Smith highlights a full on piece of propaganda that suggests that a revoloving door between the regulator and the regulated is actually a good thing.
Studie zur Teuerungsrate: Mit Inflation spielt man nicht – Ökonomie – Politik – Handelsblatt
Olaf Storbeck highlights the fact that an IMF study has just come out saying that central banks’ raising their inflation target is dangerous. This will give support to inflation hawks at the ECB.
Venetian cunning of Draghi-Monti masterplan may save euro for now – Telegraph
Ambrose Evans-Pritchard is a eurosceptic who thinks the euro should break apart but he commends Mario Draghi and mario Monti for playing good politics on the plan to save the euro. Good but dramatic piece as usual from AEP.
Eurozone money printing is on the horizon – buy Europe now – MoneyWeek
I highlighted this article already. It basically says that a bigger ECB backstop is bullish for shares in Europe.
ekathimerini.com | H1 budget figures offer hope
Greece could end up hitting its 2012 deficit targets and that would be stupendous news. The 2012 first half primary deficit was only 490 million euros.
Italien: Stimmung gegen Euro und Deutschland wächst – International – Politik – Handelsblatt
Apparently the mood in Italy is moving toward an anti-Euro, anti-German mood and that’s significant giving upcoming elections. Unless Germany can do more to show flexibility, anti-euro sentiment will be felt at the polls in a big way.
Das Orakel wird vorsichtig: Warren Buffett hortet Bargeld – Börse + Märkte – Finanzen – Handelsblatt
Warren Buffett has a percentage of his portfolio in cash and is selling stocks. This may suggest that Buffett is becoming wary of developments in equities.
Thousands of Fish Die as Midwest Streams Heat Up – ABC News
The heatwave in the US midwest has killed tens of thousands of fish in addition to causing grain prices to skyrocket. This reminds me a bit of the Dust Bowl phenomenon in the Depression. The last thing we need is a natural disaster to add to pressure on the global economy. In my view, this disaster could be the exogenous shock that tips the US economy. Let’s hope it recedes.
Recent Heat Waves Caused by Global Warming, Hansen Says – Bloomberg
This one scientist says global warming has caused the heatwave and he expects more of the same in the future.
Insight: Deadly India car factory riot sounds alarm bells for industry | Reuters
Here is an indication that social unrest is a problem to contend with in emerging markets as labor conditions there make for combustible stuff. I have no more insight to note but I believe this incident is significant enough to put in the links.
Noteworthy here is Yanis’ line that the ECB has now become enmeshed in fiscal matters by making its purchases conditional on bailouts with fiscal preconditions. The ECB is now fully politicised.
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