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Tuesday, May 14

13th May - US Close: Fed not in a hurry?

Looks like the unemployment threshold will be updated soon - too many people are dropping out of the labor force, so a drop in unemployment does not mean much. Fed has still more room to do QE, so unless the program faces dire political opposition, the current fears of an early end could be unfounded. Meanwhile, ECB's policy reginalization is not yet flying, and it is uncertain if it ever will.  

Previously on MoreLiver’s:

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Roundups & Commentary
Markets – Between The Hedges
The Closer – alphaville / FT
US: Turmoiling Market Plummets By 0.17% On POMO-Free Day – ZH

Effects of the Euro Crisis on Reserve Currency HoldingsPIIE
The shares in foreign exchange reserves of the euro and the US dollar may recover somewhat as the euro area and US financial assets become financially more attractive and less risky. Nevertheless, it is likely that we will continue to see a reduced relative preference for holding dollars and euros as reserve managers increasingly diversify their holdings beyond the five traditional reserve currencies, following the lead of private sector investors.

Current account reversals in industrial countriesECB (pdf)
Does the exchange rate regime matter?

NPLs and lights in dark placesalphaville / FT
Chart from JP Morgan’s Flows & Liquidity team shows the evolution of non-performing loan ratios (as percentages of total loans) across three different Euro area blocks: Germany, core and periphery.

Worst of Euro-Zone Crisis Not Yet OverWSJ
A majority of European investors believe the worst of the euro-zone crisis isn't over yet, with weak economic growth prospects the central concern, a survey by Fitch Ratings said Monday.

EU targets tax evasion on savingseuobserver
The EU commission wants to tighten tax loopholes for EU citizens who hold accounts in member states and in Switzerland, Andorra, San Marino, Monaco and Lichtenstein.

Reflections from BuckinghamshireOlli Rehn’s blog

Recovery in their timeFree exchange / The Economist

Is the UK facing a fiscal crisis?alphaville / FT

Economists Far From Sure We’ll See Negative ECB Deposit RatesWSJ

'Violation of Treaties': Berlin Wary of ECB Plan to Help Southern EuropeSpiegel
The ECB would like to encourage banks in Southern Europe to issue more loans. But Berlin is concerned that a planned move to trigger such lending could violate EU treaties. German Finance Minister Wolfgang Schäuble has hit the brakes.

The Fed can keep buying for a while, if it wants toalphaville / FT
It will be a little while yet before the Fed approaches that threshold, even if it increases purchases to $65bn a month. And the Fed also has the option to shift its purchases along the curve if chooses to:

A gap-ing problemalphaville / FT
The US unemployment rate has continued to decline steadily, and at its current pace would hit the Fed’s 6.5 per cent threshold to begin raising rates by roughly the middle of next year. But the suggestion made by the research is that the decline in the unemployment rate perhaps projects an overly optimistic image of improvements in the labour market.

Is A Fed 'Taper' Positive For Treasuries?Mark Grant / ZH

Retail Sales: slow growth but better than expected

Nothing Fails like SuccessMarc to Market
Far from a revolution that many observers have hyped, the Abe's diagnosis and medicine is not new, even if the dosage is.  The problem, as we have argued before, is not too little investment in Japan but really the opposite; too much investment. 

Japanese Government Bonds Give BOJ A HeadacheWSJ
What Does Japan Mean For The Rest of the World?Tim Duy’s Fed Watch

Chinese shadow banking: three different onesalphaville / FT

Chinese Power Consumption Collapses: Slowest Since Early 2009ZH

ECB Rate Talk Blunts Fed’s ImpactWSJ

Why do people support austerity? A conjecture. Noahpinion

The Man Behind the Google Brain: Andrew Ng and the Quest for the New AIWired
There’s a theory that human intelligence stems from a single algorithm. The idea arises from experiments suggesting that the portion of your brain dedicated to processing sound from your ears could also handle sight for your eyes. This is possible only while your brain is in the earliest stages of development, but it implies that the brain is — at its core — a general-purpose machine that can be tuned to specific tasks.

What Bloomberg scandal reveals about how the media really makes money – Wonkblog / WP

Return of the Borg: How Twitter Rebuilt Google’s Secret WeaponWired

More Science Fiction for Economists (Seriously Time-Wasting)Krugman / NYT

11 Essential Features that Visual Analysis Tools Should HaveStrata

With Personal Data, Predictive Apps Stay a Step AheadMIT Technology Review

How Can They Charge That? (And Other Questions)NYT