1.Franco-German motor is essential to ensure EU integration, however extending Germany recently more often a hand to the British, giving British PM ammunition to defend Britain’s EU membership. France’s economy is weakening as French exporters lost market shares for high-technology goods, lacking competitiveness and willingness to undertake reforms, while the German economy is recovering slowly and its exports rose to a new record high in 2012. Socialist President Hollande had to acknowledge that growth will fall short of his Government’s 0,8% forecast, after admitting already France will miss its deficit target 2013. Accepting austerity-easing without neclecting budget consolidation, relaxing EU its strict austerity policies, Germany’s powerful and popular Chancellor Angela Merkel softened her stand toward the European debt crisis in an effort to keep it under control, seen as crucial to her most likely re-election in 2013, remaining the preservation of the €uro the goal. Increasingly unpopular Hollande hopes for a change of Government in Berlin, prefering an electoral victory of a coalition with Germany’s Social Democratic Party/SPD, which might take a friendlier approach toward Paris, and Franco-German relations are expected to improve only after Germany’s general election in September, stalling progress in the EU and making the preparation of joint economic and monetary decisions for the important EU summit in June difficult. Merkel knows that the stability of Germany and the €uro-zone depends of Holland’s success. Italy, Spain, Portugal and Greece continue to be perceived as critical Euro-zone nations that may produce new tensions in 2013.
2.G8 countries – of the 8 nations only Canada and Germany continue with a triple A rating from all the three leading U.S. credit rating agencies, since Moody’s downgraded Britain to Aa1, cutting Moody’s and Standard& Poor’s credit rating of France also to Aa1, lowering Standard & Poor’s credit rating of the United States 1 notch to Aa1, signaling also Fitch and Moody’s downgrade warnings .
3.Financial Stability Board’s mission: Contributing to reorganize and strengthen the international financial system to avoid a future financial crisis/go to 1read.me/Basel III, etc. Financial Stability Board/FSB.
4.Fannie Mae reported reported net income of $9,7 Billion for the first 9 months of 2012, after posting net income of $1,8 Billion for the 3rdQ. 2012, and expects a significant net income for the 3 months and the year ended December 31, 2012, after Bank of America reached a $10,3 Billion settlement with Fannie Mae in the 4thQ.2012 in relation with the sale of questionable home loans, paying $3,55 Billion in cash and repurchasing mortgages paying $6,75 Billion. Fannie Mae said it was unable to file its annual report 2012 by the March 18, 2013, filing deadline due to need of additional time to analyze if it has to release any portion of the valuation allowance on its deferred tax assets, reaching $61,5 Billion at the end of September 2012, and would result in a significant dividend payment to the U.S. Department of Treasury, holding $117,1 Billion in senior preferred stock, requiring in any case a dividend payment of $2,9 Billion in the 4thQ.2012. As expected Fannie Mae reported a $7,6 Billion profit for the last quarter of 2012 and for the whole year a profit of $17,2 Billion, driven by the improving housing market and the Bank of America settlement, while it suffered a loss of $16,9 Billion for the previous year 2011. Freddie Mac also posted a $11 Billion net income for 2012, compared with a loss of $5,3 Billion in 2011.
5.Currency composition of official foreign exchange reserves – 2012: Dollar 62%, €uro 23,9%, Pstg 4%, Yen 3,9%, CHF 0,1%. Other currencies like the Australian, the Canadian and the New Zealand Dollar increased their participation to 6,1%.
6.The European Banking Authority/EBA will determine guidelines for the planned ECB asset quality review and the subsequent stress test once a new law setting up the ECB as banking supervisor is adopted, delaying the bloc’s new round of stress test until 2014.
7.QIA VTB – three sovereign wealth funds – QIA, Norwegian Government Pension Fund Global and State Oil Fund of the Republic of Azerbaijan invested between $479 Million and $639 Million each, purchasing jointly with China’s Construction Bank about 55% of the new shares issued by VTB, completing VTB’s offering of new shares, reducing Russian State stake to 15%.