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Friday, December 7

7th Dec - Weekender: Best of the Week

The best article links from my past seven day’s posts – enjoy!

Previously on MoreLiver’s:
7-Dec EU Open US Payroll day
6-Dec US Close ECB done, federal Europe coming, payroll preview
6-Dec US Open Independence Day: The Unknown Soldier

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Private Wealth and European SolidarityProject Syndicate
A little-discussed but crucial factor in the debate over wealth transfers from Europe’s more economically sound north to its troubled south is the relationship between public debt, GDP, and private wealth (households’ financial and non-financial assets, minus their financial liabilities) – in particular, the ratio of private wealth to GDP in the eurozone countries.

The most important numberFree exchange / The Economist
All it takes is one government to decide that it has had enough. The more places that have chronically underemployed workers as a large plurality of the adult workforce, the more likely such decisions become. If that were to occur, all the hard work European leaders have gone to to save the single currency would probably be for nought.

Would it have paid to be in the eurozone?National Bank of Poland (pdf)

Next Up For A "Recovering" Europe: A 30-50% Collapse In Wages In Spain, Italy And... France ZH
Goldman Sachs: We view relative wage cuts of this magnitude as unfeasible: it is difficult to imagine France accepting a one-third fall in living standards relative to Germany. Of course, one could rely on Germany to raise wages, so as to redress the competitiveness gap from the other side. But ultimately such an approach would imply Germany accepting much higher rates of inflation, say above 4% pa for a decade or more, assuming the ECB met its target of keeping area-wide inflation close to 2%. We doubt the German public would countenance such an eventuality….

Chart of the week: a deadly embracebruegel
As Europe is advancing its work on the banking union, the increased dependence of banks on their sovereigns in the last year has not received sufficient attention…sovereign debt restructuring is actually becoming less likely and more mutulisation is possible. Even if sovereign debt was unsustainable now, a debt restructuring would have more negative and incalculable consequences on the banking system now than 5 years ago.

London Mayor demands pared back EU links for BritainReuters
London Mayor on Tuesday calling for a referendum on a deeply pared back British membership of the EU.

David Cameron set to offer in-out EU votepresseurop
UK Prime Minister “David Cameron is ready to give voters the chance of rejecting Britain’s membership of the European Union in a landmark referendum,” reports The Times.

ECB afterthoughts: No new help, Draghi throws ball back to MadridSaxo Bank

The Eurozone after the November Eurogroup ‘Greek Deal’: On the current state of play Yanis Farouvakis
On November 27th, 2012, the Eurogroup (comprising the Eurozone’s finance ministers) reached a decision on Greece. Its essence is a guarantee that Greece will remain in the Eurozone (and therefore off the Northern European agenda) for another ten to twelve months; at the very least until the German federal political cycle has seen through the election of a new Bundestag. The repercussions of this short-sighted agreement are grave not only for Greece but for the Eurozone, and indeed the European Union, more broadly.

Calm after the storm MacroScope / Reuters
Is the problem solved? Absolutely not. But has Germany achieved its goal of delaying any disasters, or really tough decisions, until after its elections in the Autumn of 2013? Almost certainly. So we could (famous last words) be in for a period of relative calm on the euro zone crisis front.

Will EU summit back eurozone reform “contracts”?Brussels blog / FT
The “for discussion” only papers are to be signed – surprise!

EU summit to consider 'reform contracts' for all euro stateseuobserver
Draft ideas ahead of next week's EU summit foresee reform contracts for all euro states, political agreement on a full banking union and, post-2014, a budget for the eurozone.

Analysis: For the EU, way ahead may be a three-lane highwayReuters
Much has been written over the past year about the risks of a two-speed Europe in which the 17 euro zone countries move ahead more rapidly than the rest of the European Union.

Van Rompuy’s American-style eurozoneBrussels blog / FT
Van Rompuy’s 14-page outline includes many of the ideas he’s been proffering since October, including a requirement that all eurozone countries engage in “contractual arrangements” with Brussels, committing them to economic reform plans, and the creation of a eurozone budget. Barroso’s plan has similar elements.

EU sets out detailed "map" for euro zone's overhaulReuters
European Union leaders will examine a detailed plan for completing a banking union and strengthening euro zone fiscal policy next week, with officials concerned that momentum is waning in tackling the debt crisis.

House Prices up 6.3% Year-over-year in October, Largest increase since 2006Calculated Risk

The Fiscal CliffWonkblog / WP
“Absolutely everything you could possibly need to know, in one FAQ”

Bloomberg's 'Ultimate' US Fiscal Cliff And Debt Primer Slideshare via ZH

Monetary Policy to Become Easier Next Week?Tim Duy’s Fed Watch
There are reasons to expect the Fed would go the full monty.  Notably, the fiscal cliff drama already appears to be affecting the economy, even though it is more risk than reality.  But why are inflation expectations sliding?  And what does that imply about the effectiveness of additional easing at this juncture?  Important but as of yet unanswered questions. 

Cut out’n'keep guide to prospective new BoJ governorsalphaville / FT
Japan’s election on December 16 is going to be a doozy. It’s probably the first election where the role and independence of the central bank is a key issue, says Gavyn Davies. There’s also rather a lot of yen short positions that are riding, at least in part, on the outcome

(audio) BizDaily: Winning - and losingBBC (mp3)
Today Business Daily has an interview with most successful investor of all time - Warren Buffett. We'll be discovering how to build a 46 billion dollar fortune - so have your pen and paper ready. And just in case that doesn't work out for you we speak to another leader in his field - one of the world's most successful casino designers.

Weekend Reading for Equity InvestorsCFA Institute
Dividends, Buybacks, and an Ill-Fated Acquisition

Is stock-picking just another hobby for men?Felix Salmon / Reuters

Popular Delusions: The bull case for safe havensJohn Mauldin / The Big Picture
SocGen’s Dylan Grice’s note.

Investing in, Not Gambling Within, the CasinoAll About Alpha
Ineichen’s effort to steer investors away from some myths. From the point of view of the hedge fund industry, some of the myths are negative (such as the idea that hedge fund investing is just gambling) some are positive (such as the notion that hedge funds generate strong returns in all market conditions.)

Why have Global Macro Hedge Funds underperformed?Macronomics

Trade Ideas for 2013Global Macro Trading
2012 ideas and what happened to them can be found here.

Investment Outlook Dec 2012: Strawberry Fields – Forever?PIMCO

My Christmas Wish ListSteen Jakobsen / Saxo Bank
Could you please take all politicians, central bankers and chief economists far, far away for the next five years? I promise you Europe will be growing at 3%+, the US at 5% and Asia will be reformed and moving smartly towards its proper role in the world economy when they come back. Yes, it is that simple.

Global Scenario: The tide is turningDanske Bank (pdf)
The global economy is set for a moderate recovery in 2013 * Decreasing uncertainty and more forceful stimulus underpin growth * Emerging Markets to give new impetus to global demand * The US economy is projected to strengthen after a short-term bump * The euro area leaves recession but growth stays weak

The Great Oil FallacyNational Interest
On the right, the need for oil is seen as justifying an expanded and assertive military posture, as well as the removal of restrictions on domestic drilling. On the left, U.S. foreign-policy is seen through the prism of “War for Oil,” while the specter of Peak Oil threatens to bring the whole system down in ruins.

BizDaily: The future of world energyBBC (mp3)
Is the world about to run out of oil and natural gas? Are fears that the world is approaching 'peak oil', the moment we begin to run out of supplies, misplaced?

Ayn Rand Was NOT a LibertarianZH
Many people assume that Ayn Rand was a champion of libertarian thought. But Rand herself pilloried libertarians, condemning libertarianism as being a greater threat to freedom and capitalism than both modern liberalism and conservativism.

Offshore secrets revealed: the shadowy side of a booming industryThe Guardian
A worldwide research effort in collaboration with BBC Panorama and the ICIJ reveals the people behind these anonymous companies

Enemies at the Gates: Security Lessons from a Foiled Embassy AttackForeign Affairs
In 2001, Washington and Singapore prevented a major terrorist attack on the U.S. embassy in Singapore. Here's how they did it.

RahoitusmarkkinaveroHannu Visti

(audio) Onko taloustiede ideologiaa?YLE
Taloustieteen ideologiasta ja eurokriisin ideologisuudesta ja ratkaisuvaihtoehdoista väittelevät maailmanpolitiikan professori Heikki Patomäki Helsingin yliopistosta ja tutkija Niku Määttänen ETLAsta. Sakari Sirkkanen toimittajana. (38 min.)

Ajantasan lauantaivieras Jan HurriYLE1
Taloustoimittaja Jan Hurri etsii työssään vaihtoehtoisia tulkintoja viralliselle totuudelle. Ajantasan lauantaivieraan, Suomen Kuvalehden Journalistipalkinnon saaneen Jan Hurrin tapasi toimittaja Janne Junttila.

Näin se etenee – eurokraattien vallankaappausJan Hurri / TalSa
Alkuviikon Kreikka-sopimukset ovat vaikutuksiltaan eurokriisin sivujuoni sen rinnalla, mitä komissio täyttä päätä valmistelee: talousvallan siirtoa euromaiden parlamenteilta EU:n virkakunnalle. Komission mielestä tämä "eurokraattien vallankaappaus" on välttämätön – muuten meidät hukka perii.

Ulkoisen ja sisäisen devalvaation vertailua osa II: Miksi ulkoinen devalvaatio nostaa talouden lamasta?tyhmyri

Kallista pankki- ja vaalitukea Saksaan – sinä maksatJan Hurri / TalSa
Saksa on sittenkin valmis antamaan anteeksi Kreikan tukiluottoja – mutta vasta sitten, kun maan oma "vaalisykli" sallii ja "omat" pankit ovat kuivilla. Saksa haluaa saada omansa pois ennen Kreikka-lainojen leikkauksia. Temppu onnistuu, kunhan Suomi ja muut euromaat jatkavat kiltisti maksamista.

Amerikkalaisguru Helsingissä: "Euromaiden vajeet yhteiseen piikkiin"TE