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Wednesday, August 29

29th Aug - US Close

Some charts from the past two days to kick off the evening post:

US capital investments looking bad...

Consumer confidence looks bad...

Confidence levels suggest bad times for US stocks...
Emerging markets also dependent on QE

We have bad macro, zirp, repeated QE, possible European meltdown - and China is doing badly. US corporate earnings are at historic highs. Just what or who is going to make the day for the bulls, US housing and coming economic strength that pulls everyone else along? Ideas welcome. Also some Finnish articles at the bottom. Enjoy!

Previously on MoreLiver’s:

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Roundups & Commentary
News – Between The Hedges
Markets – Between The Hedges
The Closer – alphaville / FT
The T Report – TF Market Advisors
Tyler’s US Summary – ZH
  VIX Rises, Equity Futures Fall, Volume Disappears (Again)

TV: Bloomberg, BBC
Debt crisis: live – The Telegraph
The Euro Crisis Blog – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
European 10yr Yields and Spreads – MTS indices

Balkanisierungalphaville / FT
If you’re a central banker, how might you counteract the trend for core banks to match assets with liabilities in their peripheral subsidiaries? One reason, perhaps, that bond-buying won’t be the end of efforts to tackle convertibility risk.

Charting sovereign bond holdings across the eurozonealphaville / FT
At a point when government bonds are considered risky assets, euro-area banks are faced with both balance sheet and reputational risks compared to their non-euro area counterparts, and may prove reluctant to increase this exposure further.

Has the EU failed its original agenda?qfinance
Perhaps the European Commission should consider a back track of policy and only aim for a softer political union similar to the post war arrangement, scrapping the idea of a single European currency.

Which way for Europe?bruegel
The big question to which nobody has a clear answer is whether Europe is in the process of inventing a model of its own or whether it has only taken a detour from the inevitable choice between disaggregation and convergence on the standard federal template.

Europe’s Necessary UnionJose Manuel Barroso / Project Syndicate
The European Commission is busy drafting a proposal to create a European banking union, with the European Central Bank at the heart of a new system of integrated banking supervision, designed to help restore confidence in the euro. Such a mechanism is essential to ensuring confidence and financial stability.

Euro-zone bailout fund struggling to find demandNordea
Even these orders were received after price concessions.

Buba Strikes Back To Draghi OpEd With Weidmann InterviewZH
Weidmann: The Fed is not bailing out a cash-strapped country. It's also not distributing risks among the taxpayers of individual countries. It's purchasing bonds issued by a central government with an excellent credit rating. It doesn't touch Californian bonds or bonds from other US states. That's completely different from what we have in Europe.

Policy of targeting "monetary transmission" by the ECB looks good in theory, but questions about independence remainSober Look

Will The ECB Buy Bonds? No Says GermanyThe Big Picture
5 press article summaries with links

Is This The Fed's Secret Weapon?ZH
The difference between price level targeting (PT) and the more familiar inflation targeting (IT) is that under PT the central bank has to make up for past misses of the inflation target, while IT lets bygones be bygones. This becomes crucial in times of sustained misses of the target.

China is OkayStephen S. Roach / Project Syndicate
Around the world, concern is growing that China’s economy could be headed for a hard landing. But the doom-and-gloom hype overlooks one of the most important drivers of China’s modernization: the greatest urbanization story the world has ever seen – and one that will fuel investment and consumption for decades to come.

Latest on China: all is well and "economic growth is stabilizing"Sober Look

Is Inflation Returning?Martin Feldstein / Project Syndicate
Inflation is now low in every industrial country, while high unemployment and slow GDP growth removes the usual sources of upward pressure on prices. Nevertheless, investors are increasingly worried about future inflation, owing to the large expansion of commercial bank reserves engineered by the Federal Reserve and the ECB.

Kaaoksella hekumointi ja odottaminen sairasta politiikkaaSeppo-Juha-Pietikäinen / US Puheenvuoro
Artikkeli on surullinen esimerkki proeuroleirin analyysi- ja argumentointitaidoista. Tyylilleen uskollisena SJP nurkkaan jouduttuaan yksinkertaisesti vaikenee ja vaihtaa puheenaihetta. Ei jatkoon.

Juhana Vartiainen: Jos euro romuttuu, tarvitaan uusi rahaliittoKU

Suomen Pankin Liikanen Aamulehdessä: "Eurokriisi voi jatkua vielä vuosia"TalSa

TaakkaHannu Visti
Ajan hengessä on jotain äärettömän outoa, sillä yhteiskunnan sentimentti tuntuu kallistuvan enemmän ja enemmän kieltämisen kannalle. Ikään kuin tuskailemme kaiken vapautemme taakan alla ja ahdistusta lieventääksemme taakkaa pitää keventää luopumalla osasta kuormaa. Mutta milloin vapaudesta on tullut tällainen sietämätön taakka?