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Saturday, April 6

6th Apr - Weekender: Best of the Week

The best articles from the ending week, The ‘best of the best’ are highlighted. Summary of the week: Bank of Japan delivers, European Central Bank fiddles and USA brought a string of negative surprises. A Views & Charts-post coming up on Sunday, probably another Weekender Linkfest as well.

Previously on MoreLiver’s:

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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.

The Politics of Moral HazardBruegel

Jean Pisani-Ferry: The crisis in Cyprus has shown that the true contest in Europe is less between moral hazard and financial stability than it is between financially sensible and politically acceptable solutions. But politics in Europe is national, so what one parliament regards as the only possible solution another regards as entirely unacceptable.

Why the Euro Is Doomed in 4 StepsThe Atlantic

1. Too Tight Money 2. Too Tight Budgets 3. Too Little Trade 4. Too Much Financial Interconnection

The Tequila Crisis: The Prelude to Europe’s Economic StormTestosterone Pit

"Saving" crisis countries is mostly saving your own banks.

“The Euro: Monetary Unity To Political Disunity?”The Market Monetarist

Friedman’s article “The Euro: Monetary Unity To Political Disunity?” from 1997 has turned out to have been particularly prolific.

Eurozone RouletteZH
From JPMorgan’s Michael Cembalest - full pdf

Special: ECB Watch MoreLiver’s
Some sort of "transmission broken, helping PIIGS SME lending is coming, but not now.

Blogs review: The when and how of exit strategiesBruegel
Markets trembled when minutes from the December FOMC meeting revealed that members had discussed the side effects of maintaining a $85 billion pace of monthly asset purchases and the timing of its potential end. In a recent press conference, Ben Bernanke said “we may adjust the flow rate of purchases from month to month to appropriately calibrate the amount of accommodation” generating a number of discussions about the practicalities and implications of the Fed’s exit from years of quantitative easing.

Special: US Employment ReportMoreLiver’s
Commentary before and after the bad numbers. Note that they weren’t that bad.

Special: Bank of JapanMoreLiver’s
All the links on the Bank of Japan's move that I've posted earlier.

Guide to the Markets JPM

Think Cyprus is unique? Think again warns Citi's Matt KingZH

GS: Visualizing 193 Years Of Currency Regimes & CrisesZH

Currency Wars For DummiesZH
Charts from Goldman Sachs. Not only will every individual partly have to constantly monitor what everyone else is doing, but in addition, there is a constant risk of escalation into protectionist policies. Trade disputes are already on the rise. The number of WTO dispute cases in 2012 was the highest in 10 years. Finally, the extensive use of macro prudential policies and capital controls as observed in recent years poses the longer-term risk of misallocation of resources.

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

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.

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.


Tämän takia talletussuoja on meilläkin mielikuvakuplaJan Hurri / TalSa

Jos pankit joutuisivat meillä samanlaiseen pinteeseen kuin Kyproksella, olisi talletusten turva yhtä heikko kuin saarivaltion pankeissa. Rahat jäisivät nostamatta ja jumiin ties kuinka pitkäksi ajaksi, vaikka talletussuoja on paperilla vuoren varma. Suoja kestää pikkukupruja mutta ei kansallista pankkikriisiä. Samoin talletuksista vain murto-osa on mahdollista nostaa kahisevaksi.

Kyproksen kriisin pelottavat opetuksetTyhmyri

Jumala suojelkoon pienten maiden kansalaisia

Euroalueen nykyisellä rahapolitiikalla eivät euromaiden rakenteelliset uudistukset auta pätkääkäänTyhmyri

Suurtallettajien kasvava vastuuNordea
Kyproksen kriisiratkaisun myötä euroalue on siirtynyt uuteen aikakauteen. Euroryhmän lähettämä signaali on selvä: kriiseissä pankkien suurtallettajia ei enää välttämättä pelasteta.

Kypros-riski yli tuplaten suurempi kuin näyttääJan Hurri / TalSa
Suomen ja muiden euromaiden Kypros-riskit ovat rutkasti runsaammat kuin saarivaltiolle luvattu kymmenen miljardia euroa. Uhanalainen summa paisuu 30 miljardiin, kun "pelastuspaketin" päälle lasketaan keskuspankkirahoitus. Niinpä Suomenkin maksimiriski on yli 500 miljoonaa eikä alle 200 miljoonaa euroa.