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Friday, July 26

26th Jul - Weekender: Best of the Week

The best articles from the ending week. Last week’s ‘best’ here. This blog turned two years old last week. 

Overall, a dull week. Europe showed terrible monetary data, while optimism is on the rise according to Markit PMI.  The most important development has been the sudden uncertainty over who gets nominated as the next chairman of the Federal Reserve. Up next: the usual weekender-posts, plus link collections on Summers vs. Yellen-debate and the SAC.

We Germans don't want a German EuropeThe Guardian
Wolfgang Schäuble: Germany has no taste for shaping others in its image – but we want a European Union that can compete

Is Germany Repeating American Errors at Bretton Woods?View / BB
Lippmann, if he were alive, would no doubt warn that the seemingly endless austerity being imposed on southern Europe will ultimately lead to a political backlash that will make it unsustainable. Germany will soon have to choose: a Marshall Plan for the south, or an economic and political breakdown of the euro zone.

Controlled dismantlement of the Eurozone: A proposal for a New European Monetary System and a new role for the European Central BankNBP (pdf)
National Bank of Poland Working papers by Stefan Kawalec, Ernest Pytlarczyk

Press release Article IV Consultation on Euro Area PoliciesIMF
Euro Area Policies: 2013 Article IV ConsultationIMF (pdf)
Euro Area Policies: Selected Issues PaperIMF (pdf)

Results of the Q2 / July 2013 euro area bank lending surveyECB

Monetary developments in the euro area June 2013ECB (pdf)

European Banks Face Capital Gap With Focus on LeverageBB
Europe’s biggest banks, which more than doubled their highest-quality capital to $1 trillion since 2007 to meet tougher rules, may have further to go as regulators scrutinize how lenders judge the riskiness of their assets.

Eurozone PMI offers tantalising glimpse of growthTradingFloor
Juhani Huopainen: The Eurozone could be on the brink of, wait for it, a return to growth. The Markit July Flash Purchasing Manager Indices offer a tantalizing glimpse of a prospect that we've not seen in a long time.

Pretty Much ImprovementNordea
Today’s Euro-zone PMI data and the ECB lending survey provided fresh evidence the area is making good progress in finally defeating recession.

Terrible Eurozone loan data will keep ECB dovishTradingFloor
Terrible Eurozone monetary data will consign to the dustbin any thoughts that next week's European Central Bank meeting might be hawkish. But don't expect concrete dovish measures either - Germany's looming elections will legislate against that.

Redesigning the ECB with regional rather than national central
Eurozone national central banks that take a national perspective risk politicising the ECB’s monetary policy. This column argues that this is a significant risk that should be overcome with a fundamental overhaul of the Eurosystem. A central element would be to take the ‘national’ out of the EZ’s national central banks. Just as US regional Fed banks encompass more than one US state, EZ ‘national’ central banks area of responsibility should be redrawn along economic geography lines rather than nation lines. An example of such a proposal is provided.

The effectiveness of the non-standard policy measures during the financial crises: the experiences of the Fed and the ECBECB (pdf)
ECB Working papers by Seth Carpenter, Selva Demiralp, Jens Eisenschmidt

Monetary Developments JuneECB (pdf)

ECB Says Bank Loans to Private Sector Shrink Most on RecordBB
Loans to the private sector dropped 1.6 percent from a year earlier. That’s the 14th monthly decline and the biggest since the start of the single currency in 1999.

How Spain Just Made Mario Draghi's Nightmare WorseZH

ECB preview: More clarity on forward guidance?Nordea

Hallelujah, Spain is recoveringThe Telegraph

Spanish Unemployment Falls as Rajoy Sees Growth ReturnBB

China risks deflation trap as true GDP crumblesThe Telegraph
Ambrose Evans-Pritchard: China is sliding towards a deflation trap and may be in outright recession already if data are measured accurately, with serious knock-on risks for the global economy.

China’s interest rate liberalisation: more complicated than it looks?alphaville / FT
In themselves, the changes announced on Friday are expected to have very limited effects. Or… will they?

Japan’s lessons for Chinaalphaville / FT
While timing is difficult to predict, it does seem very hard to argue that the economic model can continue along with the social, political and legal status quo, all while maintaining recent high rates of growth.

The Chinese Economy: A short guide to its Past, Present and FuturePlace du Luxembourg

Is This The End of China's Economic Miracle?Econmatters
By George Friedman at Stratfor Global Intelligence

HSBC Flash China Manufacturing PMIMarkit (pdf)

Financial Forecast Update July 2013Nordea (pdf)
…or read the summary.

Are hedge funds really for suckers? Yeah, kinda. Wonkblog / WP

Does Dodd-Frank work? We asked 16 experts to find out Wonkblog / WP
Sunday is the third anniversary of the Dodd-Frank Act. To get a sense of how implementation has been going, I asked 16 people at the forefront of the debate to answer two questions: What has gone better than you had expected? And what has gone worse?

SEC Warns: Prepare For Repo DefaultsZH
In recent weeks, between The Fed, Basel III, and the FDIC, regulators have signalled the possible intent to change risk, netting, and capital rules that could have dramatic implications on the repo markets and now, it seems, the SEC has begun to recognize just how big a concern that could be.

Fear and Loathing in Modern Mediabrain pickings
Hunter S. Thompson on Journalism, Politics, and the Subjective

Richard Feynman on Morality and the Zen of Sciencebrain pickings
Plus His Prose Poem for the Glory of Evolution

Rahoitusneuvos Kari Nars osaa mainiosti poliitikkojen kielenTyhmyri

Vartiainen pohjustaa demariäänestäjiä sisäiseen devalvaatioon ja köyhtymiseenTyhmyri
Voisin olla vahingoniloinen ellei kyseessä olisi niin vakava asia

Sampo Terho: Hallituspuolueilla liittovaltiosta eri puheet EU:n parlamentissa ja SuomessaHS

Elinkeinoelämän edut, euro ja yrityskentän jakaantuminen – ulkoisesta devalvaatiosta hyötyisivät eniten kotimarkkinayrityksetTyhmyri

Euroeron malli on jo esitelty – kiitos komission, EKP:n ja Saksan Tyhmyri

LomarahatHannu Visti

Talouspolitiikan paradigma muuttumassa?Soininvaara