News Links: Euro Zone Bond Yields Fall, Futures Rise

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• Euro Zone Bond Yields Fall, Futures Rise – MarketBeat – WSJ

  Wall Street’s new morning ritual of checking European sovereign debt yields before deciding whether or not to buy stocks that day is a strange one. It’s like tuning into Animal Planet instead of the Weather Channel to decide how you’re going to dress yourself that day.

• Debunking Economics: An Interview with Steve Keen – Part II « naked capitalism

  Steve Keen is an Associate Professor in economics and finance at the University of Western Sydney. The second expanded edition of his popular book Debunking Economics is available now.

• Swiss Central Bank Forces MegaBanks UBS and Credit Suisse to Shrink and De-Risk « naked capitalism

  The Financial Times gives prominent play to a story that I suspect will go largely unnoticed in the US, that of the way that the Switzerland’s bank regulator, the Swiss National Bank, has forced its two biggest banks, UBS and Credit Suisse, to shed risk in a serious way and shrink.

• Currency Wars: The Making of the Next Global Crisis | The Big Picture

  In his timely new book, Currency Wars: The Making of the Next Global Crisis, my friend and colleague James Rickards tells the story of currency wars going back more than a century.  Rickards lays the ground work for the next phase of global beggar-thy-neighbor in this timely volume, which comes to market as the illusory stability of the post WWII era gives way to a more dynamic and volatile future in the international economy.

• Novak Djokovic’s Season Ranks Among Greatest in Tennis, Boris Becker Says – Bloomberg

  Novak Djokovic’s near perfect tennis season, which included three major titles and a five-month win streak, is one of the greatest of all time, former Wimbledon champion Boris Becker said. Djokovic didn’t lose until June, when his unbeaten 43-match run that began at December’s Davis Cup final was halted by Roger Federer at the French Open. The Serb’s haul of 10 titles includes the Australian Open, Wimbledon and U.S. Open.

• European Banks Face $270 Billion Goodwill Hangover for Past Acquisitions – Bloomberg

  European banks may have to write down some of the $270 billion of goodwill from their purchases in the run up to the financial crisis before they can sell assets, or new stock, to bolster capital. UniCredit SpA (UCG), Italy’s biggest lender, this week opted to take an 8.7 billion-euro ($10 billion) impairment charge following a series of acquisitions at home and in eastern Europe. Other European banks are yet to follow, analysts said. Credit Agricole SA (ACA), Banco Santander SA (SAN) and Intesa Sanpaolo SA are among European banks with the most goodwill remaining on their balance sheets, according to data compiled by Bloomberg.

• One professor to another: listen to the people, or fail – FT.com

  After economic default comes political default. Politicians in Greece and Italy have failed. Now it’s the technocrats’ turn. Having been pummeled by the bond markets and disgraced by their own intrigues, the Greek political class has turned to Lucas Papademos while the Italians have turned to Mario Monti. Both are skilled and reputable economists, but a sceptic can be forgiven for asking: why should ordinary citizens trust them?

• Even chance ECB to start printing money: Reuters poll | Reuters

  (Reuters) – The European Central Bank could soon bow to pressure to print money to prevent a further escalation of the euro zone’s debt crisis, with respondents in a Reuters poll giving an even probability the ECB would adopt a policy of quantitative easing.

• BBC News – Hungary seeks new IMF agreement

  Hungary expects to sign a new agreement with the International Monetary Fund (IMF) and the EU early next year, the Economy Ministry has said.

• Franco-German Spat on Role of ECB Renewed – Bloomberg

  The failure of European leaders to end the debt crisis with their broadest effort yet has revived a Franco-German dispute over the European Central Bank’s role and fueled investor concerns over policy makers’ economic impotence.

• Germany is not for turning on how to save the euro – FT.com

  Some argue the euro can be saved only at the price of sacrificing monetary stability. This would be a momentous mistake. Putting the European Central Bank’s printing presses to work might at best bring some short-term relief. But it would have dire consequences, both raising inflation and dissipating vitally important incentives for reform

• Kindle First Costs About $203 To Build, Teardown Finds – Arik Hesseldahl – News – AllThingsD

  But, as is always the rule with consumer electronics, prices come down. That $25 worth of TI chips will cost about $12 in the near future, meaning that Amazon will in time be able to sell the same device, but at a much lower cost to build. Of course, if it’s successful, consumers will want one that’s a little more fabulous, perhaps with a bigger screen, perhaps.

• How Household Debt Contributes to Unemployment: Mian and Sufi – Bloomberg

  The weakness in household balance sheets and the associated pullback in spending are directly responsible for the lion’s share of employment losses in the U.S. economy. This deficiency remains the most significant impediment to a robust recovery. Our research suggests that 65 percent of the job losses from 2007 to 2009 came from the drop in household spending induced by the collapse in home prices and its effect on a highly levered household sector.

• ECB crisis actions: The printing press perspective | vox

  Sarkozy’s insistence was thus reason enough for the Bundestag to declare formally, in its decision on the leveraging of the rescue plan, that it assumes that the ECB will end its policy of buying government bonds, news of which must have made Sarkozy’s blood boil. Whether the ECB Council will be influenced by the declaration of the Bundestag remains to be seen. The Council, after all, is independent – not least because this is what the Bundestag originally insisted on. The Bundestag may indeed threaten to block the use of the EFSF rescue funds with further decisions in future should the ECB continue its bond-purchase programme, but ultimately the ECB is in a stronger position. It is the master of public finance in the Eurozone, and it can always start up its own rescue machinery if it deems the rescue efforts of the international community insufficient. It determines who is rescued and when and where, not the Bundestag or any other authority in Europe.

• OWS Camp crackdown coordinated by US city mayors – RT

  If you thought the recent crackdowns of Occupy encampments across the country was more than a coincidence, there is a good chance you were right. Oakland Mayor Jean Quan admits to talking to other cities before the massive coast-to-coast evictions . In an interview this morning with the BBC, Mayor Quan reveals that she spoke with officials from other cities over the phone before a Monday morning raid that led to the eviction of hundreds of Occupy Oakland protesters and the arrests of many.

• Latin showdown with Germany over ECB – Telegraph

  Germany is facing a moment of strategic truth. The sacred union with France that has held together through thick and thin for half a century is in growing danger as contagion spreads North, engulfing the French bond market.

• Kenny rejects report budget plan was leaked to Germans – The Irish Times

  Taoiseach Enda Kenny has rejected reports that details of next month’s Budget, including a planned hike in the VAT rate, were shown to German officials yesterday. Mr Kenny met chancellor Angela Merkel in Berlin yesterday after which reports emerged that the Irish Government was planning raise the top rate of VAT by 2 per cent to 23 per cent.

• Spain’s prime minister pleads for help from EU and ECB as yields climb | Business | The Guardian

  * Zapatero: ‘This is why power has been transferred to them’ * Madrid’s borrowing costs near 7% * ECB reportedly steps in to buy up Spanish debt

• Man charged with Obama assassination attempt – USATODAY.com

  Oscar Ramiro Ortega-Hernandez of Idaho Falls, Idaho, made his first court appearance before a federal magistrate in Pittsburgh on Thursday, one day after he was arrested at a western Pennsylvania hotel. He will be taken from the federal court in Pittsburgh to face the charges in Washington. If convicted, Ortega-Hernandez could face life in prison.

• Angela Merkel says UK must work with the eurozone or risk being ‘left behind’ – Telegraph

  Angela Merkel has charged Britain to "work with us on the euro" or risk being "left behind" ahead of a testy summit with David Cameron in Berlin on Friday.

• Are The Conservative Dutch Immune To Contagion? Are You Safe During An Earthquake Because You Keep You Keep Your Shoes Tied? | ZeroHedge
• IMF to Wait for Political Support for Greek Funds – Bloomberg

  The International Monetary Fund won’t release the next tranche of funding for Greece under a 110-billion euro ($148 billion) package with the European Union until there is broad political support for the measures attached to the loan, a spokesman said.

• The euro crisis: Rule by technocracy | The Economist

  the euro zone, and indeed the European Union, has always had a legitimacy problem. Given the clear economic costs of the single currency for much of Europe, it now has a serious legitimacy problem. Residents of every euro zone country are now asking themselves very difficult questions about whether it is in their interest to stick with this project.

• Why Not Break-Up Citigroup? « The Baseline Scenario

  In 1982, Citi had a large loan exposure to the emerging markets of the day, Latin America, communist Poland and communist Romania; it was saved from insolvency by "regulatory forbearance," meaning that the Federal Reserve and other regulators did not force them to recognize their losses.  Citi was a relatively big bank at that time – but it was much smaller than it is today. And its complex global operations are exactly what would make it very hard to "resolve" or put through orderly liquidation under Dodd-Frank.

• Milliardenoffensive: Zentralbanken kaufen tonnenweise Gold – SPIEGEL ONLINE – Nachrichten – Wirtschaft

  Die Notenbanken der Welt häufen riesige Goldreserven an. Allein von Juli bis September haben sie fast 150 Tonnen gekauft – so viel wie nie zuvor in einem Quartal. Offenbar wollen die Währungshüter in der Schuldenkrise ein solides Polster aufbauen.

• Worthwhile Canadian Initiative: The ECB’s internal contradictions

  Suppose the ECB made a very public commitment to buy unlimited quantities of the bonds of any Eurozone government, if ever the interest rate on those bonds rose above (say) 5%, conditional on "good behaviour" of those Eurozone governments. If it did that, and also loosened monetary policy more generally, most Eurozone governments would be able to get back to solvency, their bonds would become safe liquid assets, and their bond yields would fall below 5%. (Greece might be an exception). By promising to buy the bonds in unlimited quantities if necessary, the ECB would most likely have to buy none. It could even start selling the bonds it already owns, if it wanted to. (Readers may recognise Chuck Norris making a guest appearance in this post).

• Nevada AG RoboSigning Indictments | The Big Picture

  Below are the first criminal charges brought in the foreclosure fraud scandal. Every state Attorney General will take note of what Nevada AG Catherine Cortez Masto just did. We’ve read the indictment, and those 606 charges are no joke. Just open it up to any page and you’ll see what was going on. A likely probability is that Nevada AG Masto is starting by going after mid-level employees, with the intent to flip up the chain.

• Sean Parker thinks Silicon Valley is in trouble | Digital Media – CNET News

  Q: What’s the problem with the assembly line model of rapid-fire investing that’s going on now? Parker: This is a model that works well in a bubble–the model of making a large number of investments very rapidly and outsourcing your due diligence to members of your network. Obviously in a market where everything goes up, this works extremely well. And that’s a bubble environment.

• Wells Fargo Says 80 May Be the New 65 for Retirees – Bloomberg

  Americans are prepared to work longer in order to save enough for retirement, according to a survey by Wells Fargo & Co. (WFC) About 76 percent of respondents said it’s more important to reach a specific dollar amount before retiring, compared with 20 percent who said it’s more important to retire at a given age, regardless of savings, according to the survey of adults with household incomes or assets from about $25,000 to $100,000. "Eighty is the new 65," Joseph Ready, executive vice president of Wells Fargo Institutional Retirement & Trust, said in an interview at Bloomberg headquarters in New York before the survey was released today. "It’s a real sea change."

• Prosecutions for Bank Fraud Fall Sharply – NYTimes.com

  Federal prosecutions for financial institution fraud have tumbled over the last decade, despite the recent troubles in the banking sector, according to a new analysis of Justice Department data by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University.

• Banks Face Funding Stress – WSJ.com

  European banks, increasingly concerned about their ability to access funding, are devising complex and potentially risky new deals that enable them to continue borrowing from the European Central Bank. The banks’ moves, which include behind-the-scenes swapping of assets among financial institutions, could heighten risk across Europe’s already fragile financial system, say some senior industry officials and regulators.

• Reuters On the "Payment Protection" Scam : CJR

  So-called payment protection plans have super-high profit margins for the banks selling them. Reuters reports on a Government Accountability Office study that says the loss ratio on such insurance is just 21 percent. In other words, people buying the insurance get just 21 cents for every dollar they spend on premiums. The banks keep 79 cents.

• 6 Burning Questions About the Violent Crackdowns on Occupations Around the Country | Occupy Wall Street | AlterNet

  In the aftermath of a city-by-city crackdown featuring hundreds of arrests and evictions of Occupy encampments, plenty of questions demand answers.