I've barely seen any reporting on it but there was an extremely important hearing at the ECJ today on the application of the working time directive to the Army. Believe it or not this could have substantial implications...even on.... QE and the ECB's asset purchases! How so ?
I hope you're intrigued!
Because France is one of the countries arguing that the WTD does not apply. And one argument made is that the free organisation of the army is a core constitutional principle; I.e. one that would even trump the EU treaty (whatever the ECJ's view)
So that could lead to further constitutional fights between member states and the ECJ, but not on any constitutional issue, only on core constitutional principles.
Which of course remain a largely undefined term and subject to case by case basis
So going back to the ECB's purchase programs, if this case escalates to a fight between French's supreme courts and the ECJ it could change the balance of power on constitutional law...something the BvG will surely watch closely !
The bottom line is this : if you think EU treaty > Constitution, remember that it's actually much more complicated than that
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Bloomberg has some nice charts on the tariffs’ impacts.
The first one argues that tariffs on China are coming globally: too many countries will see a spike of imports from China & that's not sustainable.
The second shows GDP impacts, taking into account direct effects + indirect via trade partners (using a WTO macro model, so, you know...)
SE Asia impact is massive, -1% for EU, -1.3% Japan and -2.5% Korea. Mexico bonanza.
Some details on who’s going to stop which exports – very interesting split (especially if you try to model loan losses 😊). Overall 30% drop in US imports of goods (with retaliation modelled as 50% of US). China is -85%, Vietnam -75%, Taiwan, Japan, Korea Thailand -50%, EU -40%.
A week ago the Swiss gvt bravely decided to leave the decision on UBS capital requirement to Parliament.
I’m not sure that was such a great idea – as the recent proposal of the Swiss Social-Democratic Party shows.
If implemented, it would be a massive game changer. A thread.
First, a reminder: the SDP is not a fringe party, they’re #2 in the National council (41/200) & #3 in Council of States (9/46) & they’re also not particularly extreme (I mean, Swiss rarely are.)
But their proposals for UBS are a bit wild.
Let’s unpack.
1) A new leverage ratio surcharge of 3% for assets >300bn$ - in practice it means 40bn$ more capital required (out of approx 85bn of equity).
Ouch.
And having the biggest req on a non-risk adjusted basis is not exactly a very safe approach imho
Tomorrow is the end of the grace period for fentanyl-related tariffs (Canada Mexico), China ones r supposed to start on March 12. Time to look at some numbers. So far Trump has enacted 10% “fentanyl” tariffs on Chinese goods, enacted and cancelled 25% on Columbia and threatened :
Canada, Mexico (25% goods + 10% Canadian energy), China (+10% addtl), 25% steel & aluminium worldwide, “fees” for Chinese ships/freight operators, “reciprocal tariffs” (whatever that means) for all nations + 25% autos pharma & lumber, + unknown % on copper.
We’ll know more after the report on ‘America First Trade Policy’ on April 1st, especially on "reciprocal ones", but here are few thoughts from a great Autonomous report on this.
Some historical perspective: maybe raising tariffs in the early 1920 wasn’t a great idea?
You should watch the full unedited version of this unreal press conference All going as expected (Trump w/ his weird obsessions, Z trying to stay cool, Rubio wishing he was in bed) until it totally blows up bc Z can't help correcting Vance about diplomacy
The best summary of the twisted world we live in is how Trump ends the press conference:
"This is going to be great television"
You can't make it up
Also : the journalist who asked the suit question should really look at himself in the mirror tonight bc it clearly contributed to the unravelling of the meeting
This is pure gold, Greek edition.
How did Eurobank achieve such an increase in capital ratios, in Q3 24? The trick is in the +99bps.
Which comes from a mysterious decrease of 2.4bn€ in RWA. But how? Deleveraging?
Oh no, that would be hard work. I’ve got a better idea.
Thread.
It’s obviously the ICAP CRIF CQS, you idiot. Err, what?
Here’s the explanation, & it’s beautiful.
Under Basel/EU rules, banks using the standard approach (no internal ratings) have capital charges (RWA) based on external ratings which are then mapped on so-called “Credit Quality Steps” that give RWA using this table.
BNP has very good notes on the US elections and how to trade them. They are mostly focused on timing and the info you should focus on. Here's my summary
Before the elections
Apart from betting markets / polls, a source of info is mail-in ballot statistics.
Early voting doesn’t favor the Dems as much as 2020 (but Covid).
Before the elections
Some states - notably Wisconsin, Pennsylvania, Georgia, Michigan North Carolina - start counting on Nov 5th. They are important states so could provide info.