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Saturday, March 30

30th Mar - Weekender: The Linkfest

This weekend's linkfest is a smart bomb of European misery. Weekly preview&review-post 'Weekly Support coming up next.

Previously on MoreLiver’s:

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Brussels blog round-up for 23- 29 Marcheuropp / LSE
Cyprus crisis continues, creative accounting in Spain, and is Germany Europe’s bully?

(audio) BizDaily: Eurozone Round-Up 29-MarBBC (mp3)
Is the crisis really over or are recent events in Cyprus a stark reminder of how fragile the region is? Yves Bertonici is the Director of Notre Europe, a think-tank committed to more EU integration. We ask him whether the bailout of Cyprus breaks fresh ground in the way Europe deals with failing member countries. Steve Evans reports on the formation of a new political party in Germany, a sign of disenchantment with the Euro spreading right to the centre of the union. And political uncertainty continues in Italy but some business leaders are already drawing up their demands for the new leadership - top of the list: Labour Reform.

The View from Brusselsmainly macro
As I have said before, its too easy to be rude about austerity. It is harder to put yourself in the mindset of reasonable individuals who take a different view, and pinpoint exactly - in ways that they will understand - why their view is wrong… There is a big mistake being made here. It essentially involves the prioritisation of issues. Fiscal adjustment is seen as the overriding priority. Issues involving the state of the economy are secondary: they are one factor in judging the appropriate speed of adjustment. This is the wrong way around.

Cyprus, Luxembourg, Italy or Malta: Which country will unravel the euro zone?Wonkblog / WP
Cyprus’s president says that country’s economic crisis is now contained, and it won’t need to leave the euro. But even if you believe him, that hardly means Europe is out of the woods. Slovenia was prompting concern last week, and Luxembourg and Malta are also stoking worries. And that’s not to mention the biggies Italy and Spain, whose failure would probably spark a worldwide economic crisis.

Timeline – Eurozone crisis: three-and-a-half years of painThe Guardian
Cyprus's banks have re-opened after the island became the latest eurozone country to agree a bailout. It all started back in October 2009, when Greece's finance minister revealed a black hole in his country's budget.

Stubborn and Egotistical: Europe Is Right to Doubt German Euro LeadershipSpiegel
The drama over Cyprus has made clear that the euro-zone crisis is developing into a struggle over German hegemony in Europe. On the surface, Merkel and Schäuble seem to be working to stabilize the economy. In actuality, they're binding other nations with the shackles of debt.

Eurozone Crisis: Could Informal Problem-Solving Mechanisms Prove the Conventional Wisdom Wrong?CFA Institute
Predictions of the disintegration of the “European experiment” have yet to be fulfilled despite more than 1,000 days having passed since the eurozone crisis first began. Investors owe it to themselves to consider alternate scenarios.

This is actually the scariest chart about EuropeWonkblog / WP
A new analysis by three economists at BofA Merill Lynch Global Research finds that Europe's major economies could be doomed to sluggish growth for many years to come

Poland to Krugman: don’t patronise us over euro choicebeyondbrics / FT

Europe’s Second Depression Krugman / NYT

Who Said It? "We Must Buy Government Bonds"ZH

Europe's Collapse Of Confidence In One ChartZH
Divergence between M3 and bank lending

Why European Monetary Policy Is Now Impotent ZH
AXA: The real divide within the euro area is the still broken monetary policy transmission mechanism.

Shredded Social Safety Net: European Austerity Costing LivesSpiegel
As the euro crisis wears on, the tough austerity measures implemented in ailing member states are resulting in serious health issues, a study revealed on Wednesday. Mental illness, suicide rates and epidemics are on the rise, while access to care has dwindled.

The Rewards of Being Very SeriousKrugman / NYT
More career opportunities internationally – national politicians have an incentive to drive policies not in the interest of the voters.

ECB's Knot backs Dijsselbloem comments on bank rescuesReuters
ECB Governing Council member Klaas Knot said on Friday there was "little wrong" with Eurogroup chair Jeroen Dijsselbloem's recipe for dealing with future euro zone banking crises, a newspaper reported.

Bail-In Blues: Luxembourg Warns of Investor Flight from EuropeSpiegel
In Luxembourg, leaders are warning that applying the Cypriot bailout model -- a levy on bank deposits -- to other crisis-plagued countries could lead to a flight of investors from Europe. But the EU is considering the option anyway.

When Will Deposit Haircuts Take Place In Other European Countries?ZH
The reality however is that all of Europe's banks have a soaring bad-asset overhang, and sooner or later it will have to be resolved… It is now common knowledge that such resolution will not take place via additional liquidity injections, but through impairment of the various liability classes as per the reverse waterfall of seniority

Buiter: Most European banks are zombiesCredit Writedowns

Betray Your Bank Before Your Bank Betrays YouView / BB
Wealthy depositors in Spain, Italy, Greece and elsewhere should assume he was speaking the truth the first time and take measures to protect their money, rather than trusting governments to do it for them.

French consumer recession worse than Italy's; Euro area economy in troubleSober Look

Crisis in France: Hollande Failing to Handle UnemploymentSpiegel
France has long had a chronic problem with unemployment, but the current jobless rate is especially dismal. The government has introduced several employment programs, but they're not taking effect quickly enough to convince the country things will get better.

Spanish banks: Up in smokeThe Economist

Slovenia will not be the next Cyprus: finance ministerReuters
Slovenia can afford to wait for lower borrowing costs before issuing new debt, its top economic official said on Friday.

When Is A "Unique Template" Bailout Not A Bailout? When It's In SloveniaZH

Will Slovenia Be the Next Victim of German Politics?naked capitalism
Ukraine: Cyprus ripples not negligiblebeyondbrics / FT
News headlines about a Cyprus-crisis contagion have so far focused largely on Slovenia, Malta, Italy and Spain. But Ukraine could also take a hit. While Ukrainian businesses are said to have possibly just $1-3bn in Cyprus – much less than the $30bn that has been estimated for Russia – if this money gets confiscated by the bailout levy or tied up by financial transaction limitations, it could be enough to tip the country’s troubled economy deeper into crisis.

Comments on Q4 GDP and InvestmentCalculated Risk

About Those (Not So) Record ProfitsZH

FactSet: Negative Earnings Guidance at Seven Year HighsThe Reformed Broker

An unusual good news inflation storyFree exchange / The Economist
Indeed, judging by the PCE  index the Fed is missing its mandate almost as badly on inflation as it is on unemployment, an even more compelling reason to maintain a fairly stimulative monetary policy. The main problem with below-target inflation  is that it translates into higher real interest rates. But real rates are determined by expected, not actual, inflation. Because consumers and investors focus more on the CPI, their expectations haven't responded at all to the pronounced slowing in PCE inflation.

The Abenomics Farce ContinuesZH

March Began like a Lion, Ends like a LambMarc to Market
The holiday casts a calm over the capital markets, here at month, quarter and, for some, fiscal year end.

Three days that saved the world financial systemWP
Adapted from “The Alchemists: Three Central Bankers and a World on Fire,” by Neil Irwin

No SurprisesThe Reformed Broker
As a general rule, it gets harder and harder to surprise people the more you do it. So too goes the game of economic expectations - as reports come in better, economists nudge their forecasts for future reports higher and higher. Until they get ahead of themselves and the data starts to "disappoint".

Rethinking Macro Policy II: First Steps and Early LessonsIMF
The IMF Will Host a Conference on "Rethinking Macro Policy II: First Steps and Early Lessons": conference will be webcast LIVE 16-17 April.

Weekend Reading for Financial Advisers: Jeremy Grantham, Steve Jobs, and Marshmallows – CFA Institute

Will driverless cars solve our energy problems — or just create new ones?Wonkblog / WP

The Price Is WrongKrugman / NYT
No, you can’t say “Well, there may be truth to both views”. Either the economy is supply-constrained or it’s demand-constrained.

The White House’s dangerous stance on ‘too big to fail’PostPartisan / WP

The Debate on Bank Size Is OverEconomix / NYT
Simon Johnson: While bank lobbyists and some commentators are suddenly taken with the idea that an active debate is under way about whether to limit bank size in the United States, they are wrong. The debate is over; the decision to cap the size of the largest banks has been made. All that remains is to work out the details.

Canada Discusses Forced Depositor Bail-In Procedures for "Too Big To Fail" Banks in 2013 BudgetMish’s

Large banks relative to GDP: is there a risk beyond Cyprus?Bruegel

Tarvitsemme Risto RytiäHenri Myllyniemi / Piksu

"Ensimmäistä kertaa euro ei ole euro koko talousalueella"YLE
Professori Vesa Puttonen uskoo, että Kyproksen pankkien nostorajoituksista ei luovuta pitkään aikaan.

Hautala & Himanen: oikeuskanslerilla ongelmaJukka Hankamäki

Riskimaan pankkiiri varoittaa poliitikkojen suhmuroinnistaTalSa
Salaisia palveluksia ja hurjaa riskinottoa, joka on johtanut veronmaksajien kirstulle. Slovenian suurimman pankin entinen toimitusjohtaja kertoo, miksi maan pankit ovat pulassa.

Keikuttaako eurovenettä seuraavaksi Portugali?TalSa
Portugalin valtionsääntötuomioistuin päättää lähiviikkoina, ovatko maan hallituksen kaavailemat säästötoimet maan perustuslain vastaisia.

Taloudellinen katsaus, kevät 2013 julkaistuValtiovarainministeriö
Vuonna 2013 Suomen BKT:n ennustetaan kasvavan 0,4 prosenttia. Ennuste pitää sisällään suhdannekäänteen parempaan päin. Historiaan nähden alhaiset kasvunäkymät sekä epävarmuus tulevasta johtavat siihen, että yksityiset investoinnit laskevat jo toista vuotta peräkkäin. Työllisyys heikkenee ja työttömyysaste nousee 8,2 prosenttiin. Vuonna 2014 kasvuksi muodostuu 1,6 % ja talouskasvu on entistä laajapohjaisempaa. Kotitalouksien säästämisaste säilyy negatiivisena ja velkaantumisaste nousee jo 122 prosenttiin (suora pdf-linkki).