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Follow Zerohedge in Real-Time on FinancialJuice [27] HEADLINES |
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Obama to seek authority to use force against Islamic State US mulls offering 'defensive lethal assistance' to Ukraine Greece locked in talks with EU as Tsipras demands new debt deal Greek Off'l: Restructuring debts, reducing primary surpluses, dealing with bad loans are 'red lines' EU warns Greece: Don't assume Eurozone will accept your demands German FinMin Schaeuble: Greece Will Need New Funding Fed's Plosser: Fed does not fully understand low US yields Fed's Plosser: There's little risk of deflation in US US employment trends index (Jan 15): 127.86 (prev revd to 127.7) NY Fed survey sees stable consumer inflation expectations G-20 Draft Communique: ECB decision will support Eurozone recovery US Tsy Sec Lew: Strong dollar to be topic at G-20 meeting PBOC may name Zhang Xiaohui as Assnt Gov --SINA BoJ's Kuroda: Weaker oil prices a plus for global economy SNB's Jordan: SNB prepared to intervene in FX CA Canadian housing starts (Jan 15): 187.3k (est 178.0k) Opec predicts rising demand for its oil Oil prices rise after Opec cuts US supply forecast This briefing was sent at 20:00 GMT on 9 Feb 2015 |
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COMMENTARY |
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Greece is Playing to Lose |
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The future of Europe now depends on something apparently impossible: Greece and Germany must strike a deal. What makes such a deal seem impossible is not the principled opposition of the two governments – Greece has demanded a debt reduction, while Germany has insisted that not a euro of debt can be written off – but something more fundamental: while Greece is obviously the weaker party in this conflict, it has far more at stake. Game theory suggests that some of the most unpredictable conflicts are between a weak, but determined, combatant and a strong opponent with much less commitment. In these scenarios, the most stable outcome tends to be a draw in which both sides are partly satisfied. (Project Syndicate) [28] |
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Greece's debt-reduction offensive: Not for turning |
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LAST week was the week of the new Greek government's "charm offensive", a whirlwind diplomatic tour of Europe to win allies for its efforts to gain a cut in the country's debt burden and undo the onerous terms of its bail-out programme. In the end, the tour involved more offense than charm. Alexis Tsipras (pictured), the firebrand prime minister, found little sympathy on his visit to Brussels, while Yanis Varoufakis, his unorthodox finance minister, was rebuffed politely in a long string of European capitals (and rather impolitely in Berlin). Among European Union officials, the hope took hold that this show of unity would persuade Mr Tsipras to back off and accept an extension of the bail-out programme, if only temporarily, to avoid the increasingly worrisome possibility that Greece could soon run out of money to pay its debts. The moment for such a climb-down would have been Mr Tsipras's first policy speech to the Greek parliament on Sunday. (Economist) [29] |
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Investors turn sharply more bullish on Eurozone |
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A closely watched investor sentiment index for the eurozone has raced up to its highest since May 2014, after the European Central Bank unveiled its €60bn a month asset purchasing programme. The Sentix composite index for February has a composite reading of 12.5 points, having been below zero for much of the last year. Last month, the index read just 0.9. Meanwhile, the expectations component of the index hit a nine-year high. (FT) [30] |
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US Tsy Sec Lew & UK FinMin Osborne: Essential Elements to a G-20 Growth Plan |
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Over the past few years, our two governments have worked to fuel economic growth, create jobs and improve living standards. Our economies are now growing solidly. However, finance ministers and central-bank governors from the G-20 nations gather on Monday in Istanbul against a backdrop of challenges. Global growth is forecast to slow. Deflationary risks are evident in some regions. There is a shortfall in demand. And we face rising geopolitical risks from Ukraine and the Middle East that require coordinated action. Our message at the G-20 is this: Governments must use the full set of tools they have at their disposal to support their economies and realize the collective G-20 objective of strong, sustainable and balanced global growth. (WSJ) [31] |
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The Latest Economic Conspiracy Theory |
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Friday’s jobs numbers were big, and the revisions below the surface were huge. Yet even before the release, the birther/vaxxer/flat-earther crowd had warned us about phony numbers. As public policy, this kind conspiracy thinking can cause the deaths of infants and the elderly. At least in markets, it merely loses you money.In December, I wrote:Today’s column is about stupidity. Perhaps that's overstating it; to be more precise, it is about the conspiracy-theorist combination of bias, innumeracy and laziness, with a pinch of arrogance thrown in for good measure.I am talking about the manifold ways various economic reports get misinterpreted, sometimes in a willful and ignorant manner.That column discussed some of the sillier theories from within the darker corners of the Internet. Admittedly, these weren’t from influential people or important media outlets; it was the usual collection of oddballs in tinfoil hats. (Bloomberg View) [32] |
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DATA |
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US employment trends index (Jan 15): 127.86 (prev revd to 127.7) [33] NY Fed survey sees stable consumer inflation expectations [34] CA Canadian housing starts (Jan 15): 187.3k (est 178.0k) [35] |
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GREEK STAND-OFF |
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Greece's leaders stun Europe with escalating defiance [36] Tsipras optimistic of eurozone deal after meeting Austria's Faymann [37] Greece may ask Eurogroup for bridge programme until August [38] Greek finMin: Euro will collapse if Greece exits [39] Greek FinMin Off'l: Greece to propose debt reduction via debt swap [40] Greek FinMin Off'l: We Want New Programme After Bridge Deal To Be Implemented Starting Sept 1 [40] Greek FinMin Off'l: Greece aims to reduce target for primary budget surplus to 1.5% of GDP [41] German FinMin: Greece Will Need New Funding [42] Greek three-year bond yield highest since 2012 [43] Italy Padoan: Greek bridging loan may be discussed at Eurogroup meeting [44] EU warns Greece: Don't assume Eurozone will accept your demands [45] Germany's Fuchs: There is no way out for Greece [46] UK planning for possible Greece exit from the eurozone [47] Moody's downgrades 5 Greek banks: ratings on review for further downgrade [48] |
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GEOPOLITICS |
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Obama: Sending Ukraine lethal defensive weapons is an option [49] Obama examining options if Ukraine diplomacy fails [50] Obama: Russian isolation will only worsen if it continues aggression [49] Obama to ask Congress for authority to use force against Islamic State by Weds --Congressional aides [40] Merkel: Russia must observe territorial integrity [49] |
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GOVERNMENTS/CENTRAL BANKS |
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G-20 Draft Communique: ECB decision will support Eurozone recovery [53] US Tsy Sec Lew: Strong dollar to be topic at G-20 meeting [54] Fed's Plosser: Fed does not fully understand low US yields [55] Fed's Plosser: There's little risk of deflation in US [56] PBOC may name Zhang Xiaohui as Assnt Gov --SINA [40] BoJ's Kuroda: Weaker oil prices a plus for global economy [57] SNB's Jordan: SNB Has Room for Further Deposit Rate Cut [58] SNB's Jordan: SNB prepared to intervene in FX [59] BoE's Carney Applauds ECB Policy [60] BoE's Carney urges 'big push' on bank rules, worries over reform fatigue [61] |
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FIXED INCOME |
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Treasuries rise as Greece, Ukraine worries fester [62] ECB Settles EUR42.9 Bln Of Covered-Bond Purchases As Of Feb. 6 [40] ECB Settles EUR2.7 Bln Of ABS Purchases As Of Feb. 6 [40] Microsoft selling $10.75B in debt, sees over $26B in orders [63] Moody's assigns Aaa rating to Microsoft's proposed debt issuance [64] Negative interest rates are hammering Germany's savings banks [65] |
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EQUITIES |
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NY puts monitor at Deutsche to probe possible forex rigging [67] HSBC Under Renewed Scrutiny Over Swiss Tax Avoidance Claims [68] McDonald's January sales disappoints [69] Qualcomm nears $1bn deal resolving China antitrust dispute [70] Tahoe to Buy Rio Alto for $1.09 Billion to Add Peru Gold [71] Twitter saw 40 percent more government data requests in past 6 months [72] Randgold Resources hit by lower gold prices [73] Loews Q4 Earnings Beat, Falls Y/Y on Low Investment Income [74] Comcast-Time Warner Cable Deal Still Up in the Air a Year Later [75] Manitowoc to Give Icahn Board Seats in Settlement [76] Alibaba fights for smartphone users in China with $590m stake in Meizu [77] |
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CURRENCIES, COMMODITIES, METALS |
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Opec predicts rising demand for its oil [79] Oil prices rise after Opec cuts US supply forecast [80] Yen rises on worries about Greece, Ukraine [81] Euro stumbles to lowest since Jan 28 then rebounds [82] Gold takes succour from geopolitical strains [83] COMMENT: Citi: says oil could plunge to $20, and this might be tthe end of OPEC [84] |
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EMERGING MARKETS |
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Ukrainian central bank cuts hryvnia official rate [85] Turkish lira shudders as Erdogan pushes for cuts [86] India estimates 7.4% GDP growth for year to March [87] China's largest property developer reports January sales lower [88] |
