Death Star Economics



OMG, Japan is actually growing

US jobless claims came in higher than expected and housing data disappointed as well, raining on the American recovery 2013 parade and adding to the uncertainty over the future of the Fed‘s asset purchasing program. read New York Times
At the same time, those with disposable income seem to be working on a new housing bubble of sorts. read Bloomberg

Japan reported its economy grew in the first quarter of the year, leading to a 3.5% annualized growth leap and supporting Shinzo Abe’s approach since his inauguration in September. Most of the growth is attributed to private consumption. read Bloomberg

Meanwhile, Japanese companies prefer to look for opportunities elsewhere, for example the US, where a handful of corporates bought into the US shale gas market for several billion dollar. read Financial Times

Following the Bloomberg user data debacle, Citigroup has banned its fixed income traders from participating in Bloomberg chat groups to shield the banks from any security breaches. read Financial Times

This morning…
Lloyds Banking Group might just be short of fully returning into private sector hands, as the bank’s shares rose higher than the government’s cut-off point for a sale of 61.2 pence per share. Over the past weeks, David Cameron had reiterated that bailed out and partly nationalized institution shouldn’t stay government owned for longer than needed. read Reuters

Word got out that Qatar spent up to $3bn on supporting the Syrian opposition since 2011, the same year in which Libya’s rebels also received support, fueling rivalry over political influence between Arab countries. read Financial Times

Other than that, there is not much going on, time to get on the below.

Weekend reading…

Bangladesh, globalization and the price of your t-shirts, read New York Times
– from pork bellies to ruling the world – a brief history of the Chicago Mercantile Exchange, read Economist
gold bulls vs bears, read Alphaville
– Super Abe and the fight for a prosperous Japan, read Economist leader
– on the uselessness of asset management, read Harvard Business Review

Have a good one.


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In Europe, the rate of concern keeps rising

If we think about for how long concerns about the eurozone have been growing already, it makes me wonder just how muchconcern is necessary (also, is this a compounded rate of concern?), before it turns into some ludicrous version of panic

News of the day: The ECB left its core interest rate where it was before (1.00%), just as everyone had predicted. This will probably end up with an idealistic discussion about monetary policy that could last for the rest of the week. Also, now that the rate has been left alone, it is more likely that it’ll get cut even further next month.
As MarketBeat puts it:

But there is only so much the ECB can doThe fix for the euro-zone’s woes must come from its governments. Any relief the ECB could provide would be temporary in nature, and ultimately would allow Europe’s governments to put off making any hard decisions to solve the crisis.

Sounds inefficient and pretty much exactly like what we’ve been seeing in all those EU summits. Tell me again that the EU has turned into ze German Union, ja…

Speaking of Germany. YesterdayGermany has rejected using the various European bailout funds to directly inject cash into Spain’s crumbling banking system. It’s a game of chicken to achieve more or less the same thing. Germany wants Spain to request a bailout from the EFSF and then do with it whatever they please, while Spain wants Germanyto agree to direct financial aid for its struggling banks only. The difference seems mostly semantic and legal, but either way, it might be time for things to get going.

Oh, look at what happened there! Confusingly using the same picture, the FT reports that Spain is now down on its knees, begging for European institutions to please do something and suddenly liking the idea of eurobonds.

Here’s what else happened over the long weekend:

– At the EU-Russia summit on Monday, leaders (always has a communist ring to it, doesn’t it?) discussed Syria and, who would have guessed, the euro.

– Also on Monday, Portugal injected €6.6bn in three of its banks (Banco Commercial Portuges, Banco BPI and Caixa Geral de Depositos) to help them meet European capital requirements. Portugal is sort of following its recovery plan, but the EU appears to keep planning for another bailout. The plan, which states that the country could go back to raising funds from the private sector again next year, is endangered by Portugal’s current high borrowing costs.

– Finally, George Soros gave a speech about the eurozone and the end of civilization as we know it on Saturday, here’sEzra Klein’s dissection of it.

All this is making the topic of discussion for this week: the European stab at a banking union.

Maybe we all need something to laugh this day off. Thank god, Charlie Sheen is on the cover of Rolling Stone this month. That ought to be good.

So long.

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