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Friday, November 23

24th Nov - Weekender: Best of The Week

The best picks from my posts since last Friday

Previously on MoreLiver’s:

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Troika Statement on the Sixth Review Mission to PortugalIMF

Should the Eurozone’s fiscal rules be abolished?mainly macro
Eurozone governments still do not know what to do if a future Greece emerges. How does it differentiate between a future Greece (where default is required) and a future Ireland (where it is not)? The answer at the moment seems to be that the fiscal rules will ensure there will never be another Greece. 

Fiscal cliff lessons from the eurozone crisisThe A-List / FT
As the deadline to avert the fiscal cliff gets closer, US policy makers may want to learn some lessons from the way eurozone authorities managed their crisis.

A year in a life…alphaville / FT
Dear euro, this has been your 2012 so far. Do try and get through the rest safely:

French downgrade to give way to Greek debt dealMacroScope / Reuters

Misconstruing Germany Will Prove to Be Death of the EuroEconoMonitor
Megan Greene: If Germany doesn’t change its position, the best we can realistically hope for is that it will continue to pay lip service to eventually establishing an effective banking union, and that the European Central Bank will pretend to believe this fiction in order to continue buying euro-area sovereign bonds. That could keep the wheels on the euro-area project for some time. But it cannot solve the crisis.

The Finnish Erosion: Dilemmas of the Last Triple-A Eurozone EconomiesEconoMonitor
During the past two years, the Eurozone focus has been on the ailing Southern European economies and their austerity fatigue. In the next two years, it will be on the last triple-A economies in Northern Europe and their bailout fatigue. One of these is Finland – a legendary Nordic tiger whose competitiveness is eroding.

Is the EZ’s “cunning plan” for Greece credible?Kiron Sarkar / The Big Picture
The meeting of the EZ finance ministers next Tuesday (20th November) to “settle” on a deal for Greece is certainly a “must be watched “event. The market consensus suggests that some kind of deal will be done. Well, that may be the case, but let me just raise the following.

EU Stumbles on Greek Debt Reduction After Clash With IMFBB

Euro zone, IMF fail to strike Greek debt dealReuters

More Jockeying over Greece’s Inevitable HaircutPIIE
In light of Greece’s erratic program implementation so far, they are right to keep its debt on their books until the end of the reform process in maybe 2015. They reason that it is better to wait before deciding on the scale of the losses their taxpayers will have to absorb until more information about Greece’s future is available.

On Greece, Europe should listen to the IMFThe A-List / FT
Mohamed El-Erian: The IMF is right. Greece urgently needs OSI. The longer Europe resists, the greater the risks to the integrity of Greece and to the credibility of Eurozone policy responses.

Spain’s’ only three options for recoveryFabius Maximus
The Euro-crisis began in March 2010, and yet its causes and basic elements remain widely misunderstood — including, based on their public statements, by many of Europe’s leaders.  Here Prof Pettis gives a clear explanation of what’s happening, and of Spain’s only three ways out of this crisis.

El Rosario De La AuroraA Fistful of Euros
(on Spain) I could go on and on. I would like to be optimistic, but five years of watching this train crash in slow motion have left me with the feeling that this one now has no solution. The country’s political leaders just aren’t up to the levels of complexity involved

Spanish Bad Loans Hit Fresh Record High AgainZH

Expect more from the Fed — and soonThe A-list / FT
Mohamed El-Erian: officials are considering additional measures, and are confused about what they should do next.

How big will the Fed’s QE3 end up being?MacroScope / Reuters
Minutes from the Federal Reserve’s October meeting point to solid support within the central bank for ongoing monetary easing via asset purchases well into 2013.

Economists React: The Fiscal Cliff ‘Can’t Be Fully Avoided’WSJ

Strength in numbers? Pros and cons of Fed policy thresholdsMacroScope / Reuters

Fed’s Lacker Is Skeptical of More Explicit Policy ThresholdsWSJ
More explicitly stating what would prompt a change in monetary policy could risk a breakdown in the Fed's inflation fighting credibility, a veteran policy maker said Tuesday.

Research Japan: Bank of Japan is turning into a doveDanske Bank (pdf)
Election will increase pressure on BoJ for more easing * BoJ has already stepped up easing substantially * Reshuffle of BoJ board gives ample room to influence next year *

Bank of Japan previewDanske Bank (pdf)
BoJ takes a breather but is poised to ease further

Monetary policy in Japan: Battle of the BOJFree exchange / The Economist
Stockmarket analysts have generally welcomed Mr Abe’s pledge to inflate the economy with aggressive pump-priming measures, saying it has already cheapened the yen and boosted share prices. They hope he will do more to stir business activity if his Liberal Democratic Party (LDP) wins the December 16th election. But they should consider carefully what they wish for.

The Shirakawa redemptionFree exchange / The Economist
There is a lesson in the story for politicians elsewhere. Some may read the Japanese experience as suggesting that insufficiently expansionary monetary policy is no excuse not to pursue fiscal consolidation. A better lesson, however, might be that central bankers worried about long-run fiscal conditions would be wise to push their economies back to potential as quickly as possible.

W(h)ither China? "The End Of Extrapolation"ZH
UBS’s full note!

Current Thinking on the Financial Crisis and the Way ForwardCFA Institute

Cato Institute 30th Annual Monetary Conference – The Aleph Blog
Quick summaries – five minutes to read them all:

(audio) How the clash between John Maynard Keynes and Friedrich Hayek continues to define the difference between left and right today  LSE
Eighty years ago at the LSE, Friedrich Hayek launched an assault upon the new economic thinking of John Maynard Keynes. The clash was so bitter and vituperative that it scandalized the cloistered world of academia. Eighty years on, the differences between the two men have still not been finally resolved and their conflicting approaches to the economy continue to define the profound chasm between politicians of left and right. (direct mp3-link)

Solving the too big to fail problemBIS (pdf)

International monetary policy interactions: challenges and prospectsBIS

The monetary policy of the ECB and its transmission in the euro areaECB (pdf)

The Lender of Last Resort: Lessons from the Fed’s First 100 YearsThe Big Picture

The good (political) times are over for risk assetsalphaville / FT
Morgan Stanley cross-asset strategist Gerard Minack has been looking over a long horizon, and observes that risk assets have had a good run from policymakers for several decades. But that time is probably over.

Suomi yhtä lähellä ydintä kuin Bulgaria ja RomaniaJan Hurri / TalSa
EU:n talouspolitiikan "kova ydin" on komission talous- ja raha-asiain pääosasto, jonka ennusteet ovat koko unionin talousohjauksen perusta. Suomi ei ole tämän ytimen sisäpiirissä vaan niin kaukana laitamilla kuin mahdollista. Suomea paimentaa sama yksikkö kuin Bulgariaa ja Romaniaa. Kauniita maita kumpikin, mutta tuskin EU:n kovinta ydintä. Se siitä henkseleiden paukuttelusta.

Kiistaa, valhetta ja vilppiä – tästä ei Kreikka selviä Jan Hurri / TalSa
Europäättäjät ja IMF ovat yhtä mieltä siitä, että Kreikan "pelastaminen" ei ole sujunut niin kuin piti. Hoitovirhettä ne eivät myönnä mutta kinastelevat, pitäisikö Kreikan väärää lääkehoitoa seuraavaksi pitkittää vai vahvistaa. Kumpikaan tuskin pelastaa potilasta – jolle käy tätä menoa lopulta joka tapauksessa kalpaten.

Suomen pelastusohjelma ja todellisuuden kieltäminen – Helsingin Sanomat ei vieläkään kirjoita asioista niiden oikeilla nimillätyhmyri

Raimo Sailas ja Osmo Soininvaara peräänkuuluttavat säästöjä ja sisäistä devalvaatiotatyhmyri
Ilmeisesti itseaiheutettu katastrofi on mieluisampi vaihtoehto kuin typerien päätösten peruminen

Lontoon terveisiä Timo Soini

”Jykä” ”Meidän on hoidettava Eurokriisi ensin” Vähemmän on Enemmän

Työttömyyden lasku tilastoharhaaNordea (pdf)
Tilastokeskuksen tänään julkaisemat lokakuun työvoimatutkimuksen tulokset antavat liian hyvän kuvan Suomen työmarkkinoista. Vastaavasti elokuun ja syyskuun osalta kuva työmarkkinoista oli tähän päivään saakka liian synkkä. Tämä käy ilmi siitä, että Tilastokeskus on madaltanut arviotaan työttömyysasteen trendistä näiden kahden kuukauden osalta.

Sanna Ukkola: Yksinäinen Jyrki BoyYLE
Zen Cafén biisiä vapaasti tapaillen: Jyrki Kataisesta on tullut mies, jonka ympäriltä avustajat viedään.

Kolme reittiä ulos kriisistä – kaikki "mahdottomia"Jan Hurri / TalSa
Europäättäjillä on kolme edes teoriassa mahdollista keinoa ratkaista kriisi. Kaksi niistä on äärimmäisen epätodennäköisiä tai käytännössä mahdottomia. Kolmaskin on erittäin vaikea – ja lisäksi tyystin sopimaton kriisikokousten esityslistoille. Tiistain Kreikka-kokous ei käsitellyt ainuttakaan näistä keinoista.

Kortit pöytään liittovaltiobluffissa!Sampo Terho

Suomen, Ruotsin ja Saksan kilpailukykyvertailu kolmella kuvallatyhmyri
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