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Saturday, February 2

2nd Feb - Weekender: Best of the Week

Picks from my posts since the previous 'Best of'.

Previously on MoreLiver’s:

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Blogs review: A bird’s eye view on Bruegel’s research in the crisisbruegel
In the spirit of the Stability and Growth Pact, we decided to grant an exception the rules governing our blogs review and survey some of our very own publications for those of you (especially in the blogosphere since we were pretty late at joining the dance) who may have missed these.

Europe’s Debt Crisis Endgames—Stealth SolutionsEconoMonitor
Satyajit Das: The probable endgame of Europe’s debt crisis is already known – de facto mutualisation of European debt and greater integration. But the precise events leading up to it are unknown. The story is being told backward.

Europe’s robust financial-transactions taxMacroScope / Reuters
The details of Europe’s new financial transactions tax won’t be made public for a few weeks, but the FT’s Alex Barker has seen a draft, and it looks impressively robust.

The surprisingly long path to US monetary unionalphaville / FT
Deutsche Bank strategist Stuart Parkinson makes the interesting argument that it took about 147 years

The ECB will come under pressure in the currency warsThe A-list / FT
Mohamed El-Erian: Having solved its urgent problem, the eurozone needs to deal with a new dilemma: that of an appreciating currency. There is a growing number of countries seeking to weaken their own currencies. Indeed, in the last six months, the euro has appreciated by 11 per cent against the US dollar and by 8 per cent in nominal trade weighted terms. It has appreciated by a lot more against the Japanese yen.

As The Euro Soars, This Is Where The "Max Pain" In Europe IsZH
Deutsche: When controlling for the pace of world demand and when looking at the Euro area as an aggregate, we are according to our estimates currently in or near the “danger zone” where the exchange rate is effectively undermining competitiveness.

ECB Says Private Lending Contracted for Eighth Month in DecemberBB
Euro zone lending falls for 8th month – Reuters
Loans to companies and households in the euro zone contracted for the eighth month running in December, showing low official borrowing costs are having little success in reviving investment and spending.

Envelopes of Cash: Corruption Charges Put Madrid on DefensiveSpiegel
New revelations about the corruption scandal that is rocking Spanish politics has put conservative Prime Minister Mariano Rajoy and his party on the defensive. Voters are beginning to lose patience.

Spain's Rajoy, ruling party deny secret payment schemeReuters
Prime Minister Mariano Rajoy and Spain's ruling People's Party denied on Thursday that the party made payments from business donors to the premier and other party leaders after a newspaper published what it said were secret party accounts.

Spain Recession Deepens More Than Forecast Amid AusterityBB

Cyprus’s now-certain defaultFelix Salmon / Reuters
Cyprus and the euro: Aphrodite’s indebted island The Economist
Could a country smaller than Sicily reignite the euro crisis? In June 2012 the Cypriot government asked for a bail-out after the two largest banks, stacked with Greek bonds, fell victim to the 2011 write-down of Greek debt. Seven months on, time is running out.

Germany won’t stand in Cyprus’ way, apparentlyalphaville / FT
Cyprus, the small economy with the relatively massive bank recapitalisation problem, may have some kind of good news in its quest for a bailout: Germany might not be so wedded to blocking or delaying said bailout after all.

Why financial markets are
Roger E. A. Farmer: The efficient market hypothesis – in various forms – is at the heart of modern finance and macroeconomics. This column argues that market efficiency is extremely unlikely even without frictions or irrationality. Why? Because there are multiple equilibria, only one of which is Pareto efficient. For all other equilibria, the whims of market participants cause the welfare of the young to vary substantially in a way they would prefer to avoid, if given the choice. This invalidates the first welfare theorem and the idea of financial market efficiency. Central banks should thus dampen excessive market fluctuations.

'Wealth Effects Revisited: 1975-2012'Economist’s View
Housing cycles matter.

Ray Dalio: Cash Will Move Into 'Stuff' in 2013Marketfolly

East versus West - two states of mindTradingFloor
Steen Jakobsen: In Europe, we have crisis tunnel vision, while the big Asian economies face a critical transition period. Meanwhile, the small, illiquid economies are the frontier offering the most opportunity - and risk.

Policymaker's Guide To Playing The Global Currency WarsZH
Steven Englander, Citi: “Do you only know how to play? Or can you shoot as well?”

Bye, bye RoRoalphaville / FT
JP Morgan: Correlations across dollar pairs are collapsing to their lowest level in five years (chart 1), which is statistical jargon for currency moves having little to do with global issues and almost everything to do with local ones.

Checklist: Are you doing these five things to be the best?Barking

How roads could beat railFelix Salmon / Reuters

Why You Truly Never Leave High SchoolThe New York Magazine
New science on its corrosive, traumatizing effects.

Everybody’s An ExpertFarnam Street
One of Tetlock’s counter-intuitive findings is that specialists are not significantly more reliable than non-specialists in predicting what is going to happen, even in the field they study.

Building Blocks and InnovationFarnam Street
Most innovation comes from combining well-known, well-established, building blocks in new ways.

What would George Orwell have made of the world in 2013?The Guardian
If he were alive today, would he be writing about call centres and Occupy? Or would he have become a rightwing food writer? It's not as crazy as it sounds

The west's crisis is one of democracy as much as financeThe Guardian
Slavoj Žižek: The spirit of dictators like Ceausescu is finding new life in the response of the European elite to pressures in the eurozone

Tuhat miljardia euroa – kuin taikurin hatusta
Jan Hurri / TalSa
Euroalueen keskuspankki EKP lupasi puoli vuotta sitten, että se puolustaa euroa tarvittaessa vaikka rajattomin velkakirjaostoin. Vielä se ei ole käyttänyt tukiostoihin euroakaan, mutta lupaus on tuottanut riskipitoisen finanssivarallisuuden omistajille mojovan pikavoiton: tuhat miljardia euroa.

Irtisanoudun yhteisistä eurooppalaista arvoistaOlli Pusa / US Puheenvuoro
(keskustelu on huima)

Kriisitietoa komissaareille ja muille haaveilijoilleJan Hurri / TalSa
Europäättäjillä ei ole toivoa taltuttaa kriisiä niin kauan kuin he sulkevat silmänsä kriisin syiltä. Näin tekee esimerkiksi EU:n korkea-arvoisin viranhaltija, komission puheenjohtaja José Manuel Barroso. Hän väittää yhä, että Kreikka ja muut kriisimaat kärsivät Yhdysvaltain vastuuttoman finanssialan ylilyönneistä eivätkä suinkaan Euroopan omista virheistä.

Maahanmuutto ja työvoimapula – Hesari kirjoittaa melkoista höpöä aiheen tiimoiltatyhmyri

Urpilainen huolissaan nuorisotyöttömyydestä – syytä onkintyhmyri