Links: 2013-04-05
I have a huge backlog of links that I will try to work through over the next several days. Here are today’s with the first batch with extracted summaries.
News links for 5 Apr 2013
How Europe’s Trade and Investment Ties Have Frayed – Businessweek
“The euro was launched in 1999 to increase prosperity by smoothing the flow of trade and capital within Europe. But as Europe lurches from crisis to crisis, ties are fraying. Trade and investment between euro-zone nations has diminished—which means the euro zone is slowly losing its main reason for being, regardless of whether it remains intact on paper. As T.S. Eliot almost said: This is how the euro ends, not with a bang but a whimper.”
Wall Street power player: We’re incentivized to cheat – Salon.com
“Jim Chanos, an early detector of Enron’s fraudulent practices, explains our dysfunctional banking system”
ekathimerini.com | Nicosia says recession may reach 13 percent
“The economy of Cyprus may shrink by as much as 13 percent this year, government spokesman Christos Stylianides warned on Thursday, while an independent report on the causes of the crisis in the Cypriot credit sector sent jitters throughout the island’s financial establishment.”
Launching Our First (Free) Ebook on the OCC/Fed Foreclosure Review Fiasco « naked capitalism
“As a result of many reader requests, we’ve turned our series based on testimony from whistleblowers at Bank of America and PNC on the whitewash more formally known as the Independent Foreclosure Reviews into an ebook, which we are releasing today. This was the very same OCC mandated process, billed as a way to provide wronged mortgage borrowers with the opportunity to get a measure of justice, that instead turned into a costly and embarrassing fiasco. But it still worked out well for the banks. The amount they paid, even with a mind-boggling $2 billion of fees to consultants and another $3.6 billion in cash payments to borrowers, is far less than they would have shelled out if the process had been designed to conduct the investigations fairly and give meaningful awards.
We hope you will download this ebook, read it, and circulate it widely.”
David Cameron urged to act over British Virgin Islands | UK news | The Guardian
“Secret offshore havens ‘stain face of Britain’, says Lib Dem peer, as evidence grows over sham directors and hidden cash”
The case for helicopter money – FT.com
“The response of policy makers is to try even harder to make the private sector lend and spend. Central banks can indeed drive the prices of bonds, equities, foreign currency and other assets to the moon, thereby stimulating private spending. But, as Lord Turner also argues, the costs of this approach might turn out to be high. There is “a danger that in seeking to escape from the deleveraging trap created by past excesses we may build up future vulnerabilities”. William White, former BIS chief economist, expressed a similar concern in a paper on “Ultra Easy Monetary Policy and the Law of Unintended Consequences”, last year.
Alternatives exist.”
Amazon’s Jeff Bezos leads $5m investment in Business Insider | Technology | guardian.co.uk
“Chief executive Henry Blodget says Business Insider wants to ’emulate the customer-first success’ of Amazon”
Labor scarring reason for more bond buying: Fed official | Reuters
“The Federal Reserve should continue buying bonds through this year due to a “scarring” of the labor market, and even more aggressive policies may be warranted if unemployment remains persistently high, a top Fed official said on Friday.”
MF Global’s liquidation plan approved by bankruptcy court | Reuters
“MF Global on Friday gained court approval of a plan to liquidate its assets, pay back creditors and end the $40 billion bankruptcy that rocked the financial world in 2011.”
Berlin Campaign Circulates Petition to Keep Tegel Airport Open – SPIEGEL ONLINE
“A petition is circulating in Berlin to keep the city’s aging Tegel Airport in operation. It’s due to close once the much-delayed Berlin International Aiport finally opens its doors. But polls suggest that most in the city would like to keep the old airport open as well.”
Bonn Museum Exhibit Explores US Influence on Postwar Germany – SPIEGEL ONLINE
“Flipping through the visitor book at the end of a new exhibit in Bonn on the United States, it comes as no surprise to find entries like “Guantanamo = USA, shame on you!” or “Propaganda style: The winner writes history.” America took a big hit in popularity with Germans because of the Iraq War. And, despite President Barack Obama’s outsized personal appeal, his climate change policies and drone warfare have done little to improve America’s overall standing here.
Still, “The American Way: The USA in Germany,” at the Haus der Geschichte der Bundesrepublik Deutschland, a national museum dedicated to postwar German history, explores this 68-year-old relationship and strongly concludes: No, the love has not died. It’s just complicated — or, as the museum prefers to say, “special.””
BBC News – Obama ‘offering to cut US pensions’ for deficit deal
“US President Barack Obama is prepared to offer cuts to Americans’ pensions to strike a deficit deal with Republicans, a White House official says.
In return, the Democratic president wants higher taxes on the rich. He will outline his budget plan next Wednesday.
The proposal would cut the deficit by $1.8 trillion (£1.2 trillion) over 10 years, say administration officials.
But Democrats would oppose cuts to pensions, while Republicans have refused to accept tax rises.”
A world of cheap money: Six years of low interest rates in search of some growth | The Economist
“NEVER in recent economic history have interest rates been so low for so many for so long. It is a safe bet that central banks in America, Britain, the euro zone, Japan and Switzerland will not be increasing short-term interest rates this year. Haruhiko Kuroda began his tenure at the Bank of Japan with a dramatic easing of policy on April 4th. Mark Carney, the new boss at the Bank of England, has licence to ease, too. It would be hardly surprising if rates stayed at the low levels of the past four years throughout 2014 (see chart 1). When rates were first cut to their current levels in 2008-2009, it looked like a temporary expedient; now it looks like normality.”
Spanish princess is suspect in fraud case – FT.com
“A judge has formally named the King of Spain’s youngest daughter as a suspect in a high-profile fraud investigation, dealing a fresh blow to the royal family at a time of growing popular discontent with the ageing monarch.
Princess Cristina Federica de Borbón y Grecia will be formally questioned in Palma de Mallorca on April 27, according to an official court filing released on Wednesday. She will become the first direct member of Spain’s royal family to testify as a suspect since the restoration of the monarchy almost four decades ago.”
Daimler’s Mercedes enjoys monthly sales record in March | Reuters
“Thanks to the 6.5 percent increase last month, Mercedes marked a new record high in first-quarter car sales at 324,898 vehicles for a gain of 3.5 percent.
Although Mercedes may be growing its business, a claim many of its mass market peers cannot stake, the German premium brand has watched the gap with rivals BMW (BMWG.DE) and Audi (VOWG_p.DE) continue to grow mainly due to Mercedes problems in China.
Sales in China gained over 5 percent last month but this still left a near 12 percent decline overall for the quarter.”
The Urge to Purge – NYTimes.com
“When the Great Depression struck, many influential people argued that the government shouldn’t even try to limit the damage. According to Herbert Hoover, Andrew Mellon, his Treasury secretary, urged him to “Liquidate labor, liquidate stocks, liquidate the farmers. … It will purge the rottenness out of the system.” Don’t try to hasten recovery, warned the famous economist Joseph Schumpeter, because “artificial stimulus leaves part of the work of depressions undone.””
BBC News – ECB says first Cyprus bailout plan ‘not smart’
“ECB president Mario Draghi said a proposal to make “insured depositors” pay did not come from the ECB, the European Commission or the IMF.
He said the proposal only arose in talks with the Cypriot authorities, and was “swiftly corrected”.
He was speaking after the ECB held eurozone interest rates at 0.75% again.”
BBC News – Slovenia seeks to dismiss ‘another Cyprus hysteria’
“Shaken by international media speculation that Slovenia might follow Cyprus in applying for a large EU and IMF-led bailout, Slovene bankers, business leaders and politicians have closed ranks to dismiss what they regard as “hysteria”.”
BBC News – Japan’s Nikkei tops 13,000 for first time since 2008
“Japan’s stock market has hit its highest level in almost five years, after a central bank stimulus plan raised hope of economic revival.
The main Nikkei 225 stock index climbed as much as 4.7% to 13,225.62, its highest since August 2008.
The Bank of Japan said on Thursday it would double the country’s money supply to spur growth and halt falling prices.
The step was much bigger than expected and signalled a more aggressive approach towards driving growth.”
BBC News – Halifax: House prices continue modest rise
“House prices in the UK are continuing to rise modestly, according to the Halifax.
Prices over the first three months of 2013 were 1.1% higher than in the same period of time in 2012, the lender said in its latest survey of the market.”
Econbrowser: The death of peak oil
“the post-2005 story has been one of higher prices causing (partial) substitution for crude oil (increased condensate, NGL’s and biofuels production), with probably no material increase in actual global crude oil production for seven straight years”
IMF will contribute 1 billion euros to Cyprus bailout | Reuters
“The International Monetary Fund will contribute 1 billion euros over three years to the 10 billion euro bailout for Cyprus, IMF Managing Director Christine Lagarde said in a statement on Wednesday.”
Bank of Japan follows the Fed, on steroids – FT.com
“Make no bones about it, the package of quantitative easing announced on Thursday by the Bank of Japan represents a complete abandonment of everything that institution has said about monetary policy for two decades. Those who believe in quantitative easing certainly have their desired experiment, writ large in Tokyo.”
Numbness gives way to anger in Cyprus over bailout | Reuters
“Public shock in Cyprus about the tough terms of an international bailout is turning into anger as millions of euros remain locked in the country’s banks.”
Yen hits three-and-half year low, shares dip before U.S. jobs data | Reuters
“In the currency market the yen weakened past 97 per dollar for the first time since August 2009, after falling 3.6 percent on Thursday.
Against the euro, the yen was about 0.3 percent firmer at 124.20 after losing 4.3 percent on Thursday, its biggest one-day fall against the single currency since November 2008.
Earlier the Nikkei share average jumped as much as 4.7 percent, extending Thursday’s 2.2 percent rise and breaking through 13,000 points for the first time since August 2008. The 10-year JGB yield fell as much as 12 basis points to a record low of 0.315 percent.”
Gold nears bear market | Investing | Financial Post
“Gold dropped to the lowest since May, nearing a bear market, on signs that investors are seeking higher returns in equities as the global economic recovery cuts demand for haven assets. Palladium fell the most since October.”
Why Bitcoin Is Like No Other Bubble We’ve Seen Before – Business Insider
Google to sell second-gen Nexus 7 tablet from July: sources | Reuters
Waiting in the wings this spring: Cicadas!
El ahorro familiar bajó 2,8 puntos hasta el 8,2 % de la renta en 2012 | Economía | Cinco Días
ECB warns states against devaluing currencies to boost outlook – Independent.ie
Treasuries Are Not In A Bubble – Business Insider
BBC News – Exxon Mobil oil spill subject to Arkansas investigation
Why Was Paul Krugman So Wrong? | The Nation
Three Myths About Housing Market Rebound – Real Time Economics – WSJ
Big Profits at Fannie and Freddie Reignite Debate on Housing Supports – NYTimes.com
Goldman and Morgan Stanley Both Get Downgraded – Deal Journal – WSJ
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