Links: 2013-02-09
News links for 8 February 2013
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Japan fires back at currency critics – FT.com
“In an interview with the Financial Times on Wednesday, Mr Amari rejected Mr Weidmann’s characterisation of the Japanese moves as “alarming infringements” of central bank independence that could lead to “politicisation of the exchange rate”.
“Germany is the country whose exports have benefited most from the euro area’s fixed exchange rate system. He’s not in a position to criticise,” Mr Amari said.
Mr Amari rejected the notion that Japan was trying specifically to weaken the yen, saying its efforts were aimed at reviving the domestic economy and reversing price declines.
“The market is in the process of correcting on its own from an excessively strong yen,” he said. “We aren’t guiding it, we aren’t doing anything.””
Greece sees smaller deficit this year, fiscal gap looms later | Reuters
“In an updated 2013-16 medium-term budget plan submitted to parliament on Friday, Athens cut its 2013 deficit target to 4.3 percent of GDP, from 5.5 percent in a projection made in October, and down from 6.6 percent in 2012.
But the December deal also left unfinished business, obliging Athens to spell out additional savings of 2 billion-4 billion euros for 2015-2016 to hit a primary budget surplus of 4.5 percent of GDP in 2016 as agreed with its lenders.
Friday’s projections showed Athens will need savings of 2.5 billion euros to achieve this – the lower end of the 2 billion-4 billion range – as it expects to run a primary surplus for 2016 of only 6.35 billion euros or 3.2 percent of GDP. That falls short of the 8.88 billion euro target agreed with lenders.”
Postal Service loss narrows to $1.3 billion in October-December | Reuters
“The Postal Service cut its losses by more than half in its first quarter as mail tied to the November elections, and stronger revenue from holiday-related packages contributed to a better quarter.
The postal agency, which recently announced plans to cut back on Saturday deliveries because of financial problems, lost $1.3 billion in the October through December quarter compared with a year ago loss of $3.3 billion, officials said on Friday.”
\January Numbers Fuel Fears Over Non-Bank Lending in China – WSJ.com
“Lending outside the banking system, including corporate bonds and loans by lightly regulated investment vehicles called trust companies, expanded far quicker than ordinary bank loans, according to data released Friday by China’s central bank. The rise underscores the importance of informal lending channels in China, which have become key to growth but can be less transparent than bank lending.
“The growth of other forms of funding for the economy was truly stunning,” said Crédit Agricole CIB economist Dariusz Kowalczyk in a research report.
Total social financing, a measure of overall credit that includes bank lending as well as bond and equity issues, came to 2.54 trillion yuan ($408 billion) in January, more than twice the year-earlier 955.9 billion yuan.”
Venezuela Devalues Its Currency – WSJ.com
I would expect the Argentines to also do this soon.
“The bolívar—whose official name is the Strong Bolívar—was slashed by nearly a third of its value to 6.3 per dollar from a previous rate of 4.3 per dollar, Finance Minister Jorge Giordani told a news conference.
The move will help narrow the Venezuelan government’s budget shortfall, but will also spur inflation that is already among the world’s highest—highlighting the increasingly difficult trade-offs faced by Mr. Chávez after a more than a decade of populist economic policies.
It also drove a shortage of dollars as Venezuelans anticipated their bolívars would soon be worth less and began snapping up greenbacks on the black market, where the value of the bolívar has slid to 18 per dollar.”
Google’s Schmidt to sell roughly 42 percent of stake | Reuters
“Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search company over the coming year, Google announced on Friday.
Schmidt will sell 3.2 million shares of Class A common stock through a stock trading plan, Google said in a filing with the U.S. Securities and Exchange Commission.”
Monte Paschi expects state aid very soon | Reuters
“Italy’s troubled lender Monte dei Paschi (BMPS.MI) expects to receive 3.9 billion euros ($5.2 billion) in state loans in a “very short time”, Chairman Alessandro Profumo said on Saturday.”
How to Recapture the Simple Pleasures of Childhood
“Although not examined in this study, one of the other upsides of quitting for a period is the pleasure in anticipation of its return.
So, why not give up something today? For a whole week you’ll have the pleasure of anticipation and you’ll enjoy it more when it returns.
A little judicious self-denial can be a wonderful thing.”
ECRI Weekly Leading Indicators Update – Business Insider
“despite my rejection of ECRI’s recession call, I don’t think the US economy free from recession risk. However wrong ECRI might have been, significant risks remain. The greatest endogenous threat to the US economy is the impact of the expired 2% FICA tax holiday, the decline in early 2013 personal income as a result of 2012 year-end maneuvers and the looming sequestration process.
The Advance Estimate for Q4 GDP at minus 0.1 percent bears watching. Of course, the Second and Third Estimates could adjust it higher. And this morning’s upbeat report on our Trade Balance strengthens the likelihood that the 2nd Estimate of Q4 GDP will be revised to a positive number.
The Usual Caveat: The recent economic data are subject to revision, so we must view these numbers accordingly. Nevertheless, I continue to think that an ECRI retraction of their recession call is long overdue.”
Currency Wars Over Before They Begin? – Tim Duy’s Fed Watch
“I continue to think that Japan made a significant tactical error when outlining their policy objectives. A substantial monetary easing that accomplished the objective of driving up inflation expectations in and of itself would be expected to depreciate the Yen. Japanese policymakers could have framed the policy as simply supporting the domestic economy similar to the approach initiated by the Federal Reserve. The impact on the Yen itself could have been implicit rather than explicit. Instead, by making the Yen a part of the discussion at the beginning, Japanese policymakers angered their international partners. I tend to think this was an unnecessary and ultimately counterproductive strategy.
Bottom Line: If Japanese policymakers really intend the depreciation of the Yen be limited to 90, then the supposed currency wars may already be near an end.”
Everyone Stop DM-ing On Twitter And Start Using The Moped App Now, It’s Way Better | TechCrunch
“One of the great things about Twitter is that – unlike email – people are forced to get to the point by the limits on the medium. But unlike email, you can’t CC anyone on a private communication. However, on Moped, a startup based out of Berlin, you can. In fact, Moped’s iPhone and Android app is SO useful for sending private messages to individuals and groups, that I really do wonder why you people are still DM-ing on Twitter. You can also take photos and share them on Moped privately. Today they’ve released photos with filters. Photos are a big way of how we share our private experiences – look at the rise of apps like Path and Pair for that.”
Which apps will drain your battery and data plan? Verizon’s got a list — Tech News and Analysis
“Verizon is now reviewing iPhone and Android apps, but not based on how fun or useful they are. It’s concerned about the resources they consume, which means Facebook and many popular games get docked.”
“In what’s become a new type of public service ritual, New York’s newspapers are offering free access to all of their websites as the snow storm called Nemo starts to smack the city.
Late on Friday afternoon, a spokesperson for the Wall Street Journal announced on Twitter that free access will begin at midnight”
Payroll Taxes Hitting Home. Or Not. – Tim Duy’s Fed Watch
“So which is it? How much will the tax increase weigh on the economy? Is this a case of bifurcated spending growth as higher income groups experience greater spending power via wealth impacts? Or do we simply need to wait until February to see the full impact of the tax hikes? “
Signs of a Shift on Immigration Among G.O.P. Rank-and-File – NYTimes.com
” Tracking opinions on immigration policy over time is tricky because each pollster asks different questions with different options, making for apples-to-oranges comparisons. In addition, when narrowing the focus to self-identified Republicans and Republican leaners, small sample sizes and large margin of sampling errors become a problem. A typical national survey includes about 1,000 respondents, making the subsample of Republicans pretty small, usually around 200 to 300.
But keeping those disclaimers in mind, the most recent polls on immigration suggest an increase in the percentage of Republicans who favor immigration reform that includes a route to United States citizenship.”
Sen. Rand Paul: Trust but verify on immigration reform – Washington Times
“I am in favor of immigration reform. I am also wary of reforms granted now for a promise of border security later. In 1986, Ronald Reagan signed a deal that made just such a promise, yet we are still waiting for the border security that never came. Conservatives are also still waiting for the promised three dollars in spending cuts for every dollar in tax hikes. Fool me once … So, it is understandable conservatives should insist that any immigration reform incorporate the principle of trust but verify.
In that vein, I approach these efforts in good faith. I will advance both immigration reform and verifiable border security. Under my plan for comprehensive reform the US would begin with prioritizing Visas for immigrants with advanced degrees, the so-called STEM Visas and an immediate expansion of the work Visa program. These reforms would happen immediately.”
Is Mark Carney the next Alan Greenspan…? | The Big Picture
“We’ve had some classic examples of Central Bank ‘bull’ recently. First comments from the incoming Bank of England Governor, Mark Carney, and second an interview in the Financial Times from the outgoing chair of the UK’s Financial Services Authority, Adair Turner (I include him as a central banker as he was in charge of banking regulation). Both confirmed my view that the most dangerous thing about the current conjuncture is the absolute conviction among our central bankers that they can control events.
Edwards advice is “Don’t do something, just stand there!””
LinkedIn’s ‘Stellar Quarter’ Pushes Shares to Record Highs – MarketBeat – WSJ
“The professional social network’s stock price is up more than 20% Friday and has set fresh record highs following another standout quarterly report. LinkedIn’s fourth-quarter profit jumped 66% amid continued growth in the number of its paying users and corporate customers.”
Cracks appear in European banking union scheme | Reuters
“It was billed as a reform that would tighten policing of Europe’s banks and end their ability to suck states into crisis. Now fears are growing that a central element of banking union will be scaled back, undermining the whole scheme.”
Record Oil Exports Shrink Trade Deficit as U.S. Fills Energy Gap – Bloomberg
“Record petroleum exports helped shrink the U.S. trade deficit to the smallest in two years as America moves closer to achieving energy self-sufficiency, a goal the nation has been pursuing since the 1973 Arab oil embargo.
The gap shrank 20.7 percent to $38.5 billion, lower than any estimate in a Bloomberg survey of 73 economists and the least since January 2010, Commerce Department figures showed today in Washington. The jump in fuel sales to overseas buyers, combined with purchases of the fewest barrels of imported crude in almost 16 years, led to the smallest petroleum deficit since August 2009.”
S&P as Sole U.S. Target Has Wall Street Asking About Moody’s – Bloomberg
““What purpose does it serve for the U.S. government to bring an action against S&P at this point in time? On the surface, is this a bid for some sort of retribution” for the company’s 2011 downgrade of the U.S., Bonnie Baha, head of global developed credit at Los Angeles based DoubleLine Capital LP, which oversees about $53 billion, said in a telephone interview yesterday. “Moody’s and Fitch assigned the same ratings to these transactions. Why aren’t they named as well?””
Cameron zet Europa op water en brood: De Tijd
This Belgian headline says Cameron puts Europe on water and bread. This is the reaction to David Cameron’s ability to strong arm Europe into the first budget cuts in its 56 year history. My expectation is that this will deepen Europe’s economic struggles.
Europe Leaders Bow to Cameron Push, Deepen Spending Cuts – Bloomberg
“At the center of the controversy was Cameron, making his first EU summit appearance since announcing plans for a referendum that could result in Britain leaving the 27-nation bloc as early as 2017. Britain’s demands for savings ran into opposition from France, Italy and eastern and southern European economies keen to tap EU subsidies.
“The numbers that were put forward were much too high,” Cameron told reporters before the summit started yesterday afternoon. “They need to come down, and if they don’t come down, there won’t be a deal.””
EU budget deal reached: European Union leaders agree to cut spending | GlobalPost
“European Union leaders have reached a budget deal that would cut spending for the first time since the EU was created in 1957.”
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