Links: 2013-10-16
UK house prices hit all-time high of £247,000 – Telegraph
“House prices have soared to a new, record average of a quarter of a million pounds across the UK after a jump of 4 per cent in the past year, official figures claimed today. “
Finland prime minister ready to support further eurozone bailouts – FT.com
“A fervent defender of eurozone austerity even in the midst of its third recession since the start of the financial crisis, Finland appears to be softening its image as being more German than the Germans in the face of growing support for “populist” eurosceptic parties ahead of next year’s European parliamentary elections.
Jyrki Katainen, Finland’s prime minister, told the Financial Times in Rome that Helsinki was ready to support further eurozone bailouts of Greece and Portugal if necessary.”
Lisbon unveils tough budget in effort to avert new bailout – FT.com
“Lisbon has unveiled a tough austerity budget for 2014 that is seen as a crucial step in government efforts to avert the need for a second bailout when Portugal’s €78bn rescue programme ends in June.
The proposals, including cuts of up to 12 per cent in public sector pay, are partly aimed at building investor confidence and preparing the way for Lisbon to return to international capital markets this year or early in 2014.”
Gold Sags to Three-Month Low – WSJ.com
“The ICE U.S. Dollar Index hit the highest price since mid-September on Tuesday. Gold futures fell as low as $1,251 an ounce early Tuesday, the lowest intraday price since July 10.”
Germany hardens stance on common eurozone safety net for banks – FT.com
As we all knew at the time despite the denials, Cyprus is the precedent for the rest of Europe.
“Germany has insisted that eurozone countries impose losses on all bondholders in ailing banks before taxpayers’ money can be used to clean up the financial system, a move that would make it harder to activate Europe’s common safety net for lenders.
At a meeting of EU finance ministers in Luxembourg, Wolfgang Schäuble, Germany’s finance minister, hardened his position on deploying common eurozone funds to cover any big capital shortfalls exposed in next year’s European bank stress test. Berlin is able to veto use of the funds. “
Ireland announces more budget cuts despite recovery | World news | The Guardian
“Pensioners and young unemployed asked to shoulder burden of yet another austerity budget, with cuts totalling €2.5bn”
Ireland to close Apple’s tax loophole, but leave bigger one open | Reuters
“Ireland said on Tuesday it planned to shut down a much-criticized tax arrangement used by Apple Inc to shelter over $40 billion from taxation – but will leave open an even bigger loophole that means the computer giant is unlikely to pay any more tax.”
How To Opt Out Of Google Shared Endorsement Ads
Stallman: How Much Surveillance Can Democracy Withstand? | Wired Opinion | Wired.com
“The current level of general surveillance in society is incompatible with human rights. To recover our freedom and restore democracy, we must reduce surveillance to the point where it is possible for whistleblowers of all kinds to talk with journalists without being spotted. To do this reliably, we must reduce the surveillance capacity of the systems we use.”
Amazon plans entry into smartphone market with HTC – FT.com
“Amazon is working with HTC to develop a range of smartphones as the e-commerce company steps up efforts to compete with Apple and Google, according to people familiar with the project.
One of the three devices discussed by the two companies is at an advanced stage of development, according to one person, but another warned that the timeline for launch has been changed before and Amazon may yet decide not to release the device.”
The Grumpy Economist: Bob Shiller’s Nobel
This is a fairly even-handed review of how Bob Shiller differs from Eugene Fama on what asset prices can tell us. It is a bit dense but good reading.
Relax! Government won’t run out of money Thursday
Payments and shortfalls are lumpy. SO this analysis is flawed because of that. Overall, CNBC is right that Thursday is not D-Day
“The Treasury already technically has exceeded the nearly $16.7 trillion debt ceiling—with total debt outstanding at $16.75 trillion—but has been able to keep going through the creativity of its numbers-crunchers.
The government’s spending pace in 2013 has been $13.3 billion a day while tax receipts have averaged $10.8 billion, according to Capital Economics. That leaves a daily shortfall of $2.5 billion.
Treasury will have to start dipping into the nearly $36.5 billion in reserves it is holding to cover that shortfall, meaning the government can still run for about 14 more days. That, though, is probably too optimistic an outlook. “
Moody’s Clashes With Treasury’s Lew on Prioritizing Payments – Bloomberg
“The U.S. will likely prioritize debt payments ahead of other obligations, should Congress fail to raise the nation’s $16.7 trillion debt ceiling, according to Moody’s Investors Service. Treasury has signaled less optimism on the department’s ability to “pick and choose” payments. “
America faces ‘financial armageddon’, says Kenneth Rogoff – Telegraph
“Professor Kenneth Rogoff, a former chief economist of the International Monetary Fund, compared President Barack Obama’s position to the 1962 Cuban missile crisis, when the Kennedy administration refused to negotiate with Cuba and the Soviet Union despite the threat of potential nuclear destruction.
“It’s very hard to see a silver lining to this. It’s a constitutional breakdown [but] threatening financial armageddon is blackmail,” Mr Rogoff, who is now a professor of economics and public policy at Harvard, told the Telegraph. “
Lhota Backs Off of Congress Republicans During NYC Debate – Bloomberg
The fact that this moderate Republican has to distance himself from his party tells you that the republicans are in trouble. Perhaps it is moderates who are most in trouble, which would make the party more ideologically pure (and thus create more brinkmanship)
U.S. Economic Confidence Continues to Slide Amid Shutdown
“As the government shutdown continued for a second week and Washington leaders scrambled to avoid a default on U.S. debt obligations, Americans’ confidence in the economy continued to erode last week. Gallup’s Economic Confidence Index averaged -39, down five points from the prior week. That followed a 12-point drop during the first week of the government shutdown.”
Existing home sales edge up in September, surge 18% from year ago: CREA | Financial Post
“Home sales were up just under 1% from August to September, while overall activity remained on par with the 10-year average in September, CREA said.
And while last month’s sales were up 18.2% compared with September 2012, CREA says that was because last year’s figures were unusually weak.”
WSJ/NBC poll: Support for ObamaCare up several points since before shutdown « Hot Air
The polling data that this blog post points to shows the Obamacare shutdown as a major political blunder for Republicans, with John Boehner most blameworthy for not being able to control his party members in the house.
Eurozone inflation drops to 3.5-yr low in September as expected – Independent.ie
“The rate of consumer price inflation in the 17 countries using the euro fell to 1.1pc year-on-year in September, its lowest since February 2010 when it stood at 0.8pc, the EU’s statistics office Eurostat said on Wednesday.
The reading was down from 1.3pc in August and was well below the European Central Bank’s (ECB) official target of an inflation rate of close to but below 2pc.”
U.S. Standard of Living Index Sinks to 10-Month Low
“In yet another sign that partisan wrangling over the federal budget is rattling the American consumer, Gallup’s Standard of Living Index has tumbled eight points in the past month to 31, its lowest reading since January.”
“Mr. Fisher has been one of the staunchest opponents of the bond-buying program, known as quantitative easing, or QE. He has said he argued in favor of the Fed making a small reduction in the pace of purchases at the Sept. 17-18 meeting. Instead, the Fed chose to stand pat, in part because it feared the budget fight in Washington could escalate. That has come to pass, with the government partially shut down for the past two weeks and the U.S. Treasury saying it will no longer be able to borrow and face a cash crunch on Thursday.
“We don’t want to upset the boat here. I don’t want to upset the boat” on the “horribly rough seas” being produced by Congress and the White House,” said Mr. Fisher.”
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