I will find out where we are.
I suspect the world is in hospice.
The Closer
ROUND-UPThe Fed twisted (again), US stocks were shaken but not stirred. The S&P 500 broke four days of gains to fall 0.17 per cent, closing down at 1,355.69. The Dow Jones Industrial Average also fell, by 0.1 per cent, while the Nasdaq barely edged up 0.02 per cent (Reuters).
The Federal Reserve opted to extend Operation Twist instead of additional easing. The Fed will continue to sell shorter-term Treasuries and buy longer-dated bonds to the end of 2012 as its main response to slow growth, with a purchase total of $267bn (Fed statement, Financial Times). Official’s cut the Fed’s “central tendency” forecast for growth to between 1.9 per cent and 2.4 per cent, versus 2.4 per cent and 2.9 per cent seen in April (Wall Street Journal). But the FOMC did add that it was “prepared to take further action as appropriate” if the US economy weakens further. ”We are prepared to do what is necessary,” said Fed chairman Ben Bernanke at the FOMC press conference (Reuters).
An ECB policymaker has called for the EFSF to begin buying peripheral eurozone debt. “Certainly it’s a mystery why the EFSF was allowed almost a year ago to undertake secondary market interventions and governments have not yet chosen to use that possibility… It’s not our role to trigger these kinds of interventions. We would provide an opinion.” Benoît Cœuré said (Financial Times). Finland has rejected EFSF bond purchases ahead of an official discussion on the issue on Friday (Reuters). Germany said bond-buying is a “possibility” but went no further (Telegraph).
JPMorgan has offloaded 70 per cent of the credit index positions that pushed it into a $2bn trading loss. Activity in the index showed an unusual $31bn bump on Tuesday, according to Markit data (Financial Times). The accelerated exit from the positions may indicate that the bank is keen to minimise its exposure before it publishes a review of the trades on July 13.
More than 300 money market funds have been saved by their sponsors since the beginning of the industry in the 1970s, according to Mary Schapiro, chairman of the SEC. Research from Moody’s had previously indicated that parent companies rescued 200 funds from 1980 to 2010. Schapiro is using the review to press for tighter money fund regulations (Wall Street Journal).
Procter & Gamble has cut earnings and revenue forecasts for the second month in a row, promising to restrict its expansion plans to the strongest emerging markets in future. The consumer goods company’s stock fell 3.2 per cent after the warning (Reuters). P&G said organic sales would rise only 2 to 4 per cent versus 4 to 5 per cent, and that it would focus on a core of 40 markets (Financial Times).
UP NEXT
Watch out for initial jobless claims, as ever, and also existing home sales, where most expect a decline of 1.1 per cent in May.
Philly Fed manufacturing survey — having fallen to -5.8 in May, this is expected to come out flat (0.0) in June, according to consensus…
FURTHER READING
- Tim Duy takes the Fed to the woodshed over its growth forecasts.
- Meanwhile, Felix defends Ben on keeping the powder dry.
- Greg Ip notes that Operation Twist 2 will ‘exhaust’ the Fed’s supply of short-term securities.
- When high inflation is easy to live with — when you’re South Korea in the 1970s.
- “Why do Nigerian Scammers Say They are from Nigeria?”
- Gary Cohn: no plans to stage a Goldman coup just yet, apparently.
This entry was posted by Joseph Cotterill on Wednesday, June 20th, 2012 at 22:35 and is filed under Uncategorised. Tagged with briefings, The Closer.
http://ftalphaville.ft.com/blog/2012/06/20/1053401/cheat-sheet-for-europe/
Cheat sheet for Europe
What can Europe do? SocGen has a handy little chart:
The things that can have a real impact all require political action with high hurdles, either in the form of treaty changes or unanimity. ECB action is not, by itself, going to solve the crisis — especially not while/if it’s playing a game of chicken with the fiscal authorities.
We’re not encouraged by any of this either.
The Telegraph is not telling the same story.
http://www.telegraph.co.uk/finance/financialcrisis/
Bernanke: 'Fed prepared to do more' for the economy
20 Jun 2012
| 5 Comments Sir Jeremy Heywood: spending cuts will last for 10 years
20 Jun 2012
Debt crisis: bond buying plan only 'theoretical', says Angela Merkel
20 Jun 2012
| 128 Comments Greek coalition to plead for leniency on bail-out
![Greece will today [thurs] begin the uphill struggle of trying to secure revisions to its mammoth international bail-outs, just hours after ending its protracted political crisis by forming a coalition government.](http://i.telegraph.co.uk/multimedia/archive/02254/samaras_2254530g.jpg)
20 Jun 2012
| 4 Comments Debt crisis: as it happened, June 20, 2012
20 Jun 2012
| 586 Comments Markets bet Germany will be dragged down with everyone else
Nobody ever got rich shorting Japanese government bonds, it is often said. Are those now aggressively shorting German bunds about to fall into the same trap?20 Jun 2012
| 107 Comments 'Greece has a government'
Pasok leader Evangelos Venizelos confirms that Greek political parties have agreed to a conservative-led coalition.20 Jun 2012
| 3 Comments Thousands receive food handouts in Athens
Thousands of Greeks in Athens hurt by rising unemployment and crippling social cuts queued up in the heat for food handouts.20 Jun 2012
| 24 Comments The panic will continue.
http://agonist.org/steve_hynd/20120620/greece_has_a_government
Greece Has A Government
Antonis Samaras of the conservative New Democracy party has been sworn in as Prime Minister after managing to cobble together a coalition with Pasok and the Democratic Left. Both junior coalition members have made clear their membership is conditional on swift action to re-negotiate Greece's bailout conditions and that they won't take cabinet positions, leaving the NDP to sink or swim on it's efforts.
A very short stay of execution.
About a week. Germany has said no already.
http://www.nakedcapitalism.com/2012/06/links-62012.html
Wednesday, June 20, 2012
Links 6/20/12
I have a TV taping this AM (more on that later), hence thin posts.‘On the brink’ species counted BBC
India in Race to Contain Untreatable Tuberculosis Wall Street Journal. This is serious.
Belief in Hell Predicts a Country’s Crime Rates More Accurately Than Other Social or Economic Factors Medical Daily. I guarantee that they did not correlate crime rates with income disparity.
Distractions: winter in Sydney John Hempton
WikiLeaks founder Julian Assange seeks asylum in Embassy of Ecuador in London Washington Post. More from Glenn Greenwald
G20 summit: perils of a half-baked rescue for Spain and Italy Ambrose Evans-Pritchard, Telegraph
Frayed Tempers at G-20: Euro-Zone Leaders Tired of Criticism from Abroad Der Spiegel
G20 bid to cut cost of euro borrowing Financial Times
Egypt’s Mubarak ‘close to death’ BBC
Mixed Message From U.S. Aids Egyptian Coup Bloomberg
U.S., Israel developed Flame computer virus to slow Iranian nuclear efforts, officials say Washington Post
Board of Immigration Appeals rejects ‘DOMA denials’ for binational same sex couples Raw Story
Food Stamp Vote In Senate Blocks Bid To Restore $4.5 Billion In Aid Huffington Post
Public Workers Face Continued Layoffs, Hurting the Recovery New York Times
NC school strip searches 10-year-old over $20 he didn’t steal Raw Story
Make Voting Mandatory Peter Orszag. Bloomberg. How long has yours truly been saying this, citing Oz?
Homeowner Aid Boosts Big Banks Wall Street Journal (LadyLiberty)
Hedge funds battered by euro crisis Financial Times
[JPM Whale-Watching Tour] Where the OCC should have looked Lisa Pollack, FT Alphaville
MF Global Customers “Get the Chance” To Auction Off Their Hopes For the Return of Stolen Funds Jesse
Foreclosure fraud combatant eyes clerk of court role in Florida Housing Wire
Robin Hood Tax Campaign Comes to the US Dave Dayen, Firedoglake
Equity Financing of Higher Education Adam Levitin, Credit Slips
Predators and Professors Simon Johnson, Project Syndicate. I suspect Johnson will be getting fewer Christmas cards this year.
* * *
Krugman To Colbert: "Ireland Is America's Future If Romney Is President"
Submitted by Tyler Durden on 06/19/2012 - 20:07 Great Depression Greece Ireland Krugman Paul Krugman Recession Stephen Colbert
Forget turning Japanese, an anxious-looking Paul Krugman appeared on Stephen Colbert last night to hawk his book and suggested that "Ireland is Romney economics in practice". Noting that Obama "inherited a Depression" but has unfortunately not taken us out of it due to a "whole lot of opposition from 'the other guys'". The Kaped Keynesian Krusader went on to note that "a recession is when things are going down but a depression is when things are down" and suggests an Obama campaign slogan "It's Not As Bad As The Great Depression" to which Colbert retorts that electing Romney would seem to be the path to 'ending this depression now'. While Krugman opines that if we would just re-hire all the government workers who have been laid off over the past few years then all would be well in the world, we suspect Colbert is closer to the truth when he comedically adds that "obviously the way to end the real depression is a war in Europe" and while USA is not Greece (or Uganda), it appears we will be Ireland if Romney gets elected.The reporter does not understand. Ireland is not a good place at this time.
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