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Saturday, July 6

6th Jul - Weekender: Linkfest

In this week's edition the usual Europe with focus on the PIIGS, Vatican's latest scandal, Marc Rich is dead, some interesting off-topic articles and couple of Finnish-language links.

Previously on MoreLiver’s:

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Brussels blog round-up for 29 June – 5 JulyEuropp / LSE
Croatia joins the EU, trouble in Portugal and France’s ‘restive left’.

Speech  Benoît Cœuré: Monetary Policy and the Risk of a Lost DecadeECB
Eurozone faces 'lost decade' unless action taken on banksThe Telegraph
The eurozone faces a Japanese style "lost decade" unless action is taken to address the deep-seated problems of its banks, ratesetter Benoît Coeuré has warned.

The impact of sovereign-debt exposure on bank lending: Evidence from the European debt
The European sovereign-debt crisis has raised many questions regarding the link between sovereigns and banks. This column goes to the heart of one and shows that tensions in Eurozone government-bond markets were transmitted internationally through the bank lending channel. Lending by European banks with sizeable exposures to sovereign debt from the troubled Eurozone countries became impaired after the start of the crisis, resulting in a reallocation away from foreign (especially US) markets.

Potential Mistakes (Wonkish)Krugman / NYT
The European Commission has, rather belatedly, woken up to the likelihood that it is understating potential output in debtor countries, overstating their “natural” rate of unemployment, and therefore underestimating the degree of fiscal austerity being imposed.

The Portuguese government seems close to collapse The Economist
No one is likely to emerge a winner from the political disarray triggered in Portugal by the resignations of the finance and foreign ministers.

How to Leave the EuroOpinion / WSJ
The consequences of years of irresponsible fiscal policy, bad microeconomic policies and inadequate supervision of commercial banks cannot be put right simply by reintroducing a national currency. But it's important to understand that abandoning the euro wouldn't unleash hell upon Greece, either. An orderly, market-based solution is available if and when the decision is made to pull the trigger.

Spain: Disillusion is leading to the rise of two alternative partiesThe Economist
Dramatic political change is sweeping Spain, or so polling suggests. For three decades Mariano Rajoy’s conservative Popular Party (PP) and the Socialists have taken turns to run the country.

Spain needs no further bailout funds, says ECB reportEl Pais
Exclusive: Spain banks do not need new EU aid at present - EC documentReuters
Spain's banks do not at present need further European aid, according to a document prepared by the European Commission and the European Central Bank and seen by Reuters on Friday.

Bankers whisper: Spain's bailout bill could riseReuters
Spain's bill to bail out its banks may yet rise, some bankers and analysts fear, as a worsening economy hampers the government's early attempts to sell off nationalised lenders and threatens the "bad bank" housing their rotten property deals.

‘Conned’: a German view of IrelandIrish Times
Last week, the German newspaper ‘Süddeutsche Zeitung’ published an article about the ‘conning’ of Ireland – over several decades – by its political masters. We talk to the writer, reprint the article and add some footnotes of our own

Money will find a wayThe Economist
The Eurobond’s 50th birthday has lessons for governments about how not to regulate finance

Senior Vatican cleric arrested in money smuggling case (28-Jun)
Top Vatican bank managers resign after Monsignor's arrest (1-Jul)
Arrested Vatican monsignor felt he could act with impunity-judge (1-Jul)
Prosecutors consider trial for ex-Vatican bank managers (2-Jul)
Arrested Vatican prelate lived lush life in hometown (4-Jul)
Vatican bank told of "clear failings" at meeting (4-Jul)
Italian prosecutors drop inquiry into former Vatican bank chief (6-Jul)

First signs of rate-driven weakness in the housing sectorSober Look
Today Citi and some other banks quoted the 30-year conforming mortgage rate at 4.625%. Others are quoting the rate even higher (see national averages below).

The Derp and Fall of Inflation FearmongersThe Atlantic
Nothing can kill zombie ideas. Not facts. Not figures. And certainly not failed predictions…Derp doesn't fall under the Fed's dual mandate.

China’s Local Debt MysteryWSJ
Leaders in Beijing know that swelling local government debt is one of the greatest threats to China’s economy. What they don’t know, apparently, is just how big the threat is.

China’s banks: Ten days in JuneThe Economist

Another little China growlLong Short / FT
Mostly what’s cheap is commodity-related stocks set to suffer from the slowdown of demand in China. Domestically-oriented companies are down, but aren’t that cheap.

Basel Report Sees Diverging Bank Views on RiskDealBook / NYT
The Basel Committee on Banking Supervision, a body of central bankers, says it has found significant differences in how some of the world’s large banks continue to assess risks on their balance sheets.

Basel Probes Banks’ Diverging Views of Risk-Weighted AssetsBB

Are we having fun yet?London Review of Books
John Lanchester on the banks’ barely believable behaviour

Credit and growth after financial crisesBIS (pdf)
The lack of association between deleveraging and the speed of recovery does not seem to arise due to limited data. In fact, our data shows that increasing competitiveness, via exchange rate depreciations, is statistically and economically significantly associated with faster recoveries. Our results contradict the current consensus that private sector deleveraging is necessarily harmful for growth.

Bank bondholders: Fail saferThe Economist
Authorities on both sides of the Atlantic make progress towards safer banking

Central banks adopt a three-speed interest rate policy, but will it work?The Telegraph
These contrary stances reflect very different positions in the economic cycle. The US already seems to be in self-sustaining recovery mode, but Europe remains mired in recession. As ever, the UK is somewhere in between, still unsure whether it dances to the US or the European tune.

The Inflation SolutionPieria
Don’t tell Wall Street Journal editorial writers (or Sun readers) but more and more economists  now recognize that moderate inflation is precisely what the world economy needs. 

Lunch with the FT: Meredith WhitneyFT
The Wall Street analyst who foresaw the US banking crisis talks to Lucy Kellaway about standing out in a ‘dull’ industry

Research Review | 7.5.13 | Portfolio ManagementThe Capital Spectator

Book Bits | 7.6.13The Capital Spectator

Newsletter Issue 7The Short Side of the Long

Markit: Plumbers in suitsThe Economist
A private company controlled by banks connects much of the financial system

Cover Story: How the NSA Targets Germany and EuropeSpiegel
Top secret documents detail the mass scope of efforts by the United States to spy on Germany and Europe. Each month, the NSA monitors a half a billion communications and EU buildings are bugged. The scandal poses a threat to trans-Atlantic relations.

The Rock ’n’ Roll Casualty Who Became a War HeroNYT
From Nirvana and Sound Garden to U.S. Army Ranger and Special Forces.

A Test to Measure How Rational You Really Areio9
Standard IQ tests are problematic on many levels — not least, because they do very little to tell us about the quality of our thinking.

Buried SecretsThe New Yorker
How an Israeli billionaire wrested control of one of Africa’s biggest prizes.

(video 5:19) An inside look at the Taliban's bankersReuters

Manhattan Fold ’EmNew York Magazine
How a high-stakes poker game that started at Tobey Maguire’s house became part of a $100 million gambling and money-laundering operation orchestrated by the Russian mob.

My encounters with Marc RichFortune
A Fortune senior editor-at-large recounts how he landed an exclusive interview with the elusive late financier.

Marc Rich, Financier and Famous Fugitive, Dies at 78 NYT

Obituary: Marc RichThe Economist

The double life of Marc Rich (2001)NBC
From ski villas and high finance to the uneasy life of a fugitive

Marc RichWikipedia

Pohjois-Amerikan Yhdysvallat on tulonsiirtounioni tyhmyri

Pelkkä vähäinen hintakilpailukyky ei riitä yhteisvaluutan oloissa – klusteriedut, teollisuuden katoaminen ja talousmaantiedetyhmyri

Tutkimus: Velkakriisistä on vaikea toipua, jos kuuluu valuuttaliittoonTE

Veropetossyytteen tutkintaa koskeva merkittävä linjanmuutosJyrki Virolainen