Best picks
from my posts since the previous 'Best
of'.
Previously on MoreLiver’s:
EUROPE
CRISIS
OVER OR NOT?
Is a monetary union without
fiscal/political union doomed? – mainly
macro
The Euro Crisis: Mission Accomplished?* – Bruegel
The
improvement in financial stability is real, but the clear analogy,
unfortunately, is to President George W. Bush, who in 2003, stood on an
aircraft carrier beneath a banner that read, “Mission Accomplished,” only two
months into an Iraq war that would last another decade. The dark clouds of euro
crisis are hardly behind us.
Death
by Davos – Krugman /
NYT
This is the way the euro ends: not with the banks but
with bunga-bunga. OK, the euro isn’t doomed — yet. But the Italian election
signals that the eurocrats, who never miss an opportunity to miss an
opportunity, are getting very close to the edge.
The Euro Crisis: Mission Accomplished?* – Bruegel
The
improvement in financial stability is real, but the clear analogy,
unfortunately, is to President George W. Bush, who in 2003, stood on an
aircraft carrier beneath a banner that read, “Mission Accomplished,” only two
months into an Iraq war that would last another decade. The dark clouds of euro
crisis are hardly behind us.
ECB
Euro zone private lending falls, but the ECB
gets its excuse – TradingFloor
Juhani
Huopainen: In the aftermath of the Italian election, the European Central
Bank's whatever it takes promise is being doubted. To assure investors that
there is a backstop, the ECB needs an excuse - and today it got it.
It’s Frankfurt
that should be your worry – not Rome – The
Market Monetarist
The logic
is that a ‘bad’ political outcome in Italy will lead the ECB to become more
hawkish and effectively tighten monetary conditions by signaling that the ECB
is not happy about the ‘outcome’ in Italy and therefore will not ease monetary
policy going forward even if economic conditions would dictate it.
The inbuilt political
stand-off in the ECB's bond-buying programme – Open
Europe
A flaw in euro zone defences – MacroScope
/ Reuters
The story
of the last five months has been the bond-buying safety net cast by the
European Central Bank which took the sting out of the currency bloc’s debt
crisis. But now it has an Achilles’ Heel. The ECB has stated it will only buy
the bonds of a country on certain policy conditions.
3 Numbers to Watch: EZ inflation, unemployment
and LTRO repayment
– TradingFloor
Juhani Huopainen:
Today's data on low inflation and record-high unemployment should give Mr
Draghi what he needs to push for continued easy monetary policy in the European
Central Bank's meeting next week.
PIIGS
Will Irish & Portuguese
bailouts get Greek treatment? – Brussels
blog / FT
The
document – obtained by the Brussels Blog under the condition that we not post
it on the blog – makes pretty clear that while an extension might help smooth
“redemption humps” that now exist for Ireland (lots of loans and bonds come due
in 2019 and 2020) and Portugal (2016 and 2021), it’s not a slam dunk case.
Cyprus is a small island, they DSA things differently there – alphaville
/ FT
A
simulation of how the Troika might carry out a debt sustainability analysis
(DSA) for Cyprus. It’s pretty epic, and we don’t
just mean that Sterne finds the debt unsustainable under the IMF’s “So Italy’s
sustainable, right?” definition of sustainability for eurozone sovereigns
The
burning of Rome spreads – alphaville
/ FT
We’re talking a deep reversal back towards eurozone
crisis trends.
ITALY
Special: Italian Elections – MoreLiver’s
Daily
Italy economic overview – graphic of the day – Thomson
Reuters
Italian elections – what’s
next? – Danske
Bank (pdf)
Economic fact book: Italy – Danske
Bank (pdf)
Austerity, Italian Style – Krugman / NYT
(audio) Weekly
with Gideon Rachman: Instability rules in Italy – The
World / FT
Italian national elections have ended in chaos and the
voters’ message is that they are tired of austerity and the political elite.
The country faces a hung parliament after votes were split between a former
comedian, an ex-prime minister who faces corruption charges, and the
centre-left, who won narrowly in the lower house. Mario Monti, the technocratic
prime minister who was appointed 15 months ago, came a distant fourth place.
UNITED STATES
The Fed to face challenges as it ultimately exits the unprecedented monetary expansion – Sober Look
The Fed to face challenges as it ultimately exits the unprecedented monetary expansion – Sober Look
Ben Bernanke to Congress: You're doing it wrong – Wonkblog
/ WP
There seem
to be no serious monetary policy doves in Congress… The toughest real talk,
actually, tends to come from Bernanke himself, who uses his occasional visits
to the Hill to politely, opaquely scold Congress about their approach to fiscal
policy.
Draining excess reserves and
the exit strategy –
Sober
Look
Questions continue
to surround the Fed’s eventual exit from years of quantitative easing. The
ultimate fate of what is to become of the 3.5 - 4 trillion dollar portfolio of
securities
Bernanke’s Senate tone not
that of Fed Chairman seeking third term – MacroScope
/ Reuters
In
unapologetic and sometimes testy exchanges before the Senate Banking Committee
on Tuesday, the Fed chief defended his record and dismissed one Senate critic
in unusually blunt terms.
ASIA
Yen Plunges As Uber-Dove
Kuroda Set To Head Bank Of Japan – ZH
Abenomics: Where the Rubber Hits the Road – Marc
to Market
Abenomics
is the traditional LDP economic policy on steroids. It
distracts from the kind of structural reforms that are necessary to boost
Japanese growth capacity.
Ye olde Abenomics – alphaville
/ FT
All this
has happened before and will happen again… at least, so hopes the Japanese government.
OTHER
Blogs review: The safe asset
shortage – bruegel
Safe debts
– or what is often called information insensitive assets, as they do not suffer
from the types of financial frictions that are characteristic to other
financial assets – play a major role in facilitating transactions for
institutional investors. And, as we have learned in the recent years, they also
play a major role in triggering financial crises when they loose their safety
status and turn into information sensitive assets. As central bankers start
backpedalling on their commitments to increase the supply of safe assets and
start worrying about the negative effects of the “search for yield”, there has
been a renewed discussion in the blogosphere about the role of safe assets and
whether they remain in short supply.
The Pareto Economy – of
two minds
The Pareto
distribution suggests that costs could be cut by 80% across the entire economy.
OFF-TOPIC
When Brain Damage Unlocks The
Genius Within – Popsci
Brain
damage has unleashed extraordinary talents in a small group of otherwise
ordinary individuals. Will science find a way for everyone to tap their inner
virtuoso?
The Extraordinary Science of
Addictive Junk Food
– NYT
A chemist
by training with a doctoral degree in food science, Behnke became Pillsbury’s
chief technical officer in 1979 and was instrumental in creating a long line of
hit products, including microwaveable popcorn.
DIY Weapons of the Syrian
Rebels – The
Atlantic
Gangster Bankers: Too Big to
Jail – Rolling
Stone
How HSBC
hooked up with drug traffickers and terrorists. And got away with it
IN FINNISH
Eksynyt EU – Henri Myllyniemi / piksu
Miksi Saksa ei anna Euroalueen toipua – miksi antaisi
koska kaikkihan menee Saksan kannalta kuten pitääkin – tyhmyri
Humun raportti kallis kupla – Apu
Puhallus.
Huippu-urheilun muutostyöryhmän eli Humun hintava loppuraportti on
osoittautunut asiantuntijoiden mukaan nollatutkimuksen arvoiseksi.
Kostaako EKP Italian "väärän" vaalituloksen?
– Jan
Hurri / TalSa
Italian kansa on juuri äänestänyt väärin maansa
parlamenttivaaleissa, jos markkinoiden ensireaktiot asiasta mitään kertovat.
Samaa mieltä lienevät EU:n talouspäättäjät. Eurooppalainen demokratia sen
sijaan sai vaihteeksi välierävoiton – jota kestää, kunnes EKP ja markkinat taas
kiristävät Italiaan mieleisensä hallituksen.
Perussuomalaiset selvitti
omaan valuuttaan palaamista
– YLE
Perussuomalaisten
oma ajatushautomo Suomen Perusta tilasi selvityksen, jossa liittovaltiokehitys
nähdään EU:n olemassaololle välttämättömänä. Ulkopuolisilta tilatussa
tutkimuksessa esitetään vahvoja epäilyjä siitä, toimiiko euroalue kunnolla enää
tulevaisuudessa.
Miten euroalue kehittyy? – Suomen
Perusta (pdf)