Daily briefing for Thursday, January 13, 2011; A tough choice; 'New normal' new?; China's M3;

Here is a quick snapshot of some key overnight news, views, and data.

Grow or collapse
Europe needs to take immediate action to shore up the euro. In an interview with the German news organisation Spiegel, Nouriel  Roubini said Germany must provide more money to defend the common currency and allow the European Central Bank to loosen monetary policy. Otherwise, disaster could be looming.

An over-used term
The current fad to recognise a 'new normal' is actually something economic commentators have been doing for a long time. People are generally a little trigger-happy with the “new normal” label. In fact, someone has tracked the term's use in books over the last century, and it turns out it is not very new.

Making a problem worse
China’s foreign exchange reserves surged in the fourth quarter by a record amount while the money circulating within the Chinese economy also climbed more than expected in December, according to government statistics released Tuesday that underline the country’s worsening inflation dilemma

The power of credit 
"Perhaps you are thinking: 'But a tank costs several million dollars, not including floor mats. I don't have that kind of money.'
Don't be silly. You're a consumer, right? You have credit cards, right?
Perhaps you are thinking: 'Yes, but how am I going to pay the credit-card company?'
Don't be silly. You have a tank, right?"
- Dave Barry

more below ...

Kelly on the ropes?
BankingDay issued a subscriber-only news item saying Westpac's board had lost faith in Gail Kelly's leadership and was looking for a replacement. That brought a swift denial from the board chairman. 

Deluge drives up costs
Investors are demanding record yield premiums to buy European covered bonds, driving up funding costs for banks at a time when they are relying more than ever on the top-rated, loan backed securities as a source of capital.