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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

An attempt at revival

This week…

Things in Turkey continued to be messy, as Erdogan’s stern view of protesters continues to spark new anger among the masses and sent the Turkish Lira falling. read Bloomberg
On Thursday, Erdogan re-iterated that he was losing patience with the protestors. Today, the government and its counter movement reached an agreement, while Germany delayed further EU accession talks with Turkey. read WSJ

In Greece, the doors of Hellenic Broadcasting Corp closed, sending 2,500 former employees out onto the streets. It is meant to be relaunched later this year in a slimmed-down version. read WSJ

In the UK, jobless claims dropped, suggesting that the recovery is well on its way (remember how we’ve been here roughly 700 hundred times now..?). read Bloomberg

And then there was Wednesday, when literally everyone with an audience called the bond bubble, for example Jim O’Neill (formerly of Goldman Sachs) and Bill Gross (Pimco)

Around the same time, Iraqi officials said the country was looking to increase its oil production by 29% in 2014 and 159% by 2020, showing that a) they can and b) they have buyers. read Emerging Frontiers

Then there was a new price fixing scandal [yes, there are still some products left]; this time in FX. read Felix Salmon

Meanwhile on Wall Street, notes on correlations with Japan: read WSJ

In Brussels, important issues like the size and curviture of bananas and cucumbers has been pushed aside as Washington’s lobbyists walked in to ensure EU privacy regulations wouldn’t get so strict that they could hurt US investigations overseas. read FT

Rupert Murdoch is divorcing Wendy Deng, could this be the actual reason for splitting News Corp? read New Yorker

The week ahead…

The G8 meet on the outskirts of London on Monday and Tuesday; anti-globalization protesters will ironically stick to central London, where they will follow a scavenger hunt-like course through the West end, mapped out here. Please refrain from buying condiments at Fortnum & Mason until the weekend, as you may otherwise be questioned about the social legitimacy of your job.

Otherwise, it’s going to be a Bernanke-dominated week – again – as the Fed is meeting and press conferencing. Although Bernanke tried to nullify the comments about an end of easing, saying that it would take “considerable” time until that would happen, everybody seems to think the US is going to turn the money tap off. read WSJ

Have a good one.

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Monti set to resign, new stance on global internet regulation

On Saturday, Italy has crawled back to the center of attention of the eurozone blow-up. Mario Monti, the country’s unelected prime minister, announced his intended resignation following the approval of the Italy’s 2013 budgetThe FT summarizes:

The 2013 budget law is expected to receive parliamentary approval before the Christmas recess. Whether parliament is dissolved immediately and Italy heads into snap elections in early February – rather than in March or April as had been expected – depends on Mr Napolitano. The president could decide instead to ask for a vote of confidence in the government and appoint a provisional prime minister who would oversee the passage of key economic reform legislation still before parliament.

Last week Thursday, the Italian parliament faced turmoil, after Berlusconi’s party walked out of a vote on fiscal matters. Since then, rumors got louder that Silvio Berlusconi will try to return to office. He is currently being charged for relations with an underage prostitute and abuse of power (possibly related, but two court cases). In Italy, all legal charges are put on hold if an individual is running for a public office. Berlusconi had been convicted to four years imprisonment for tax fraud in October 2012, which was later reduced to one year and then to the prohibition from ever running for office again. Clearly, that has not worked out so well. But the left ranks before Berlusconi’s People of Freedom party in the polls. The Wall Street Journal spoke to Pier Luigi Bersanti, the current favorite according to said polls. read article

Japan is finding itself back in recession, after Q2 GDP was revised down from 0.1% growth to -0.1% (annualized and seasonally adjusted). Shinzo Abe, who is leading the opposition in the election on Sunday, wants unlimited monetary easing and more stimulus until the economy gets back on track. Expectations, however, point at another quarter of negative growth for the end of the year. read article

Meanwhile in Dubai, the Arab state delegation, supported by Russia and China, have proposed a

new regulatory framework for the internet. The opposition, simply put the Western world, is strongly in favor of the current regulation, which doesn’t regulate so much. read article

American and British financial regulators are working on a blueprint on how to deal with failing banks, or more specifically, failing G-SIFIs (global systemically important financial institutions). Once agreed, the new regime is meant to protect tax payers on either side of the Atlantic, while drawing on creditors and shareholders. read article

According to this Sunday’s New York Times Bloomberg is looking into buying the Financial Times, which also includes a 50% stake in The Economist. The other possible bidder is, of course, Thomson Reuters. The Financial Times Group is estimated to be worth around $1.2bnread article

So long.

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…and the EU keeps getting it wrong

EU fluff language has reached another peak today, with Michel Barnier saying financial regulation was a “work in progress,” representing “a balance between flexibility and harmonization […] to ensure that financial actors, be they banks or hedge funds or other financial institutions are appropriately regulated.” Thank god all players in financial services are the same so that we only have to have one big fat rule book for all of them. It’s nice when policy making is so comprehensive. Almost seems like we’ve missed something here… read article

Meanwhile, an 11 year-old Dutch boy is solving the eurozone problem [and gets recognized by the Wolfson Economics Prize]: read article

The German, sorry, European fiscal pact is entering the next round. Yesterday afternoon, German finance ministerWolfgang Schaeuble presented the plan, which would replace budget sovereignty with technocratic supervisors, preferably from Germany. Call it the German Union, Zerohedge calls it a dictatorshipread article

Clash of the titans: Reuters and Bloomberg now each employ more journalists than the New York Times and Washington Post combined, plus they actually have substantial revenue. That’s how the romance of print newspapers will actually die, killed by data providers tempting writers with better salaries. The Reformed Broker says “Bloomberg, Reuters are becoming the Coke and Pepsi of Journalism.” read article

Daily Factoid from MarketBeat: On April 3, 1948, Harry Truman signed the Marshall Plan designating $5bn in aid to 16 European countries. Five billion dollars. That’s like what Greece runs through in a day…

To put that number in contemporary context, UK companies spent £5bn only on online advertising in 2011. Times have changed. A bit. read article

So long.

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It’s budget day!

The Daily News Brief is going on a short spring holiday and will be back at the end of next week!

So it’s budget day in sunny Britain. The day George Osborne takes his little red lunch box to work and talks business. The plan is, unsurprisingly, to stimulate growth, get rid of that deficit and make everybody better off. Unfortunately, it’s not the thought that counts. An increase in real estate tax (stamp duty) is expected, as well as adecrease of corporate tax to 24% and the cut of top tax rate from 50% to 45%. So far, the UK public borrowing decreased by around £9bn from 2010/2011; however, public debt in February was up by around £6bn from last year. Hmm. read article

Update: The most important thing has already been said:

It’s the determined policy of this government that we keep Wallace and Gromit exactly where they are.”

(regarding film tax credit)

Occupy London is still around, even after the protesters have been evicted from their holy camping grounds around St Paul’s. Here’s their statement (from the FT’s budget live blog):

In the shadow of Canary Wharf, set along the path of workers from the local financial services industry, Occupy Limehouse (corner of Branch Road and Horseferry Road, E14) has been chosen as an ideal location from which to carry on the Occupy movement’s critique of global capital. It is the first of a number of new autonomous tented sites expected to pop up around the capital in the coming months.

always thought Limehouse needed to be gentrified

How do we feel about journalists being paid for giving speeches at events of banks and all other financial institutions of the rainbow? read article

And finally, the case for philosophy in finance and why the UN should be more like a trading floor.

So long.

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And why wouldn’t Serbia want to join the EU right now…

Herman von Rompuy, the by far funniest looking European politician, was elected for a second term as president of the European Council. Kind of surprising that there was any kind of election considering the person in question is Belgian… Anyway, he will be in office until 2014, but can not be re-elected thereafter. read article

In other EU news, Serbia was confirmed as a candidate member country and the fiscal pact will be signed today [by all except the UK and the Czech Republic].

Relevant for everybody who’s using Twitter: the micro-blogging service has sold the rights to mine its data to two research companies, so expect super tailored ads in the near future… read article

Otherwise, we’re all looking forward to the outcome of the Russian presidential elections on Sunday. It’s a breath-taking race between Vladimir Putin and… wait IS there another candidate? read article

The Economist examines why SME should stand for ‘small-and-medium-sized-enterprises-hopefully-soon-to-be-massive’read article

New York City blog Gothamist finally got approved as official press by the NYPD. That’s interesting because it took more than 90 months for the application to go through. In 2008, it was rejected on the grounds that blogging wasn’t considered journalism. It was only in the year after that a law suit forced the NYPD to give out press passes to bloggers. Pretty late to jump on that train… read article

Have a good weekend.

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The ECB is a wizard

EU officials have extended the judgment day deadline, i.e. the deadline to strike a deal. for Greece to 15 February. Reuters had estimated a six-week administration period between agreeing on a deal and 20 March, when the next pile of debt matures. In the latter case, a solution would have had to be found this Thursday.

Otherwise, Greek protesters burned a German flagAngela Merkel pretended not to care and said she wouldn’t force Greece to exit. Dutch PM Mark Rutte, however, didn’t hold back and said the EU could live without Greece, so there you have it.

Also, the European Central Bank showed how it could make $11bn of Greek debt disappear “just like that”. With the debt swap dance in the next round, but I will let Felix Salmon explain it [in very clear words]:

The details are sketchy, but to a first approximation, it seems to work like this: the ECB has €50 billion of Greek bonds, which it bought for €39 billion. It will sell those bonds to the EFSF for €39 billion, which in turn will “return the bonds to Greece”, whatever that means. Greece, in turn, “will then agree to repay the EFSF” — which may or may not mean issuing new bonds to be held by the EFSF. Since Greece will now have €39 billion of debt rather than €50 billion, that’s an €11 billion savings. read article

Alphaville voices some more concerns, also regarding the role of national European central banks, which are unlikely to buy into this game.

Meanwhile, it might be time to worry about Iceland and its debt again read article

Planet Money on the somewhat recursive nature of literature on the financial crisis: economist Andrew Lo sat down to bring a stop to the books written on the books written on the books written on the financial crisis 08/09. read article

And more in terms of financial writing: I was pointed to this article in Economist yesterday, rightly mocking poor headlines (oh wait, was that meant for me?) read article

So long.

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