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Thursday, November 7

7th Nov - ECB lowered, but markets recoup

Previously on MoreLiver’s:

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Europe Making Same Mistakes as Japan in 1990sWSJ
Europe is making the same mistakes that Japan did during the 1990s and as a result is likely to suffer a similarly prolonged period of stagnant growth, a paper argues.

Austerity and
Today’s austerity, many argue, is stupid. This column argues that today’s EZ austerity may arise from stupidity before the crisis – specifically lacklustre structural reform. Excess debt arose in nations maintaining unsustainable living standards and welfare systems in the face of poor growth. The Crisis forced radical adjustments such as austerity in a recession. It’s not austerity which caused low growth, but low pre-Crisis growth which ultimately caused austerity. The way out of austerity is fundamental pro-growth reforms that create room for more gradual fiscal adjustment.

France won’t meet its deficit target. No problemReuters

Troika Statement on 2nd review mission to CyprusIMF
Press release here.

The European Banking DisunionProject Syndicate
The future of the eurozone depends crucially on whether Europe’s financial markets “renationalize” or become fully integrated. But either outcome would be preferable to partial integration – which is where the eurozone appears to be headed.

Germany is a weight on the worldFT

The modern DeutschmarkFT

The German trade surplus may widen with the euro-area recoveryBruegel

The polarisation of the German party system in the 2013 elections and the disappearance of the FDP explain the country’s tortuous coalition negotiationsEuropp / LSE

Merkel Dominating German Coalition Talks Attains Peak of PowerBB

German Economic Model Wins Backing in Merkel Coalition TalksBB

On Lowering the Unemployment TargetTim Duy’s Fed Watch
Policymakers would like to normalize policy by moving away from asset purchases to interest rates.  Emphasizing forward guidance is part of that process.  Incoming research suggests not only that threshold based forward guidance is effective, but has room to be even more effective. Indeed, the current low level of unemployment relative to the threshold, combined with clear indications that the Fed has no intention of raising rates anytime soon, argues by itself that a change in the thresholds is a likely scenario in the months ahead.

Be wary of assuming that a change in the unemployment threshold to 5.5% implies the Federal Reserve intends to keep rates near zero into 2017.  The results of the English et al. (2013) paper suggests a much smaller change in expectations for the timing of the first rate hike from such a policy shift.

Fed wonk special, now with Q&AFT
Some prominent Fed Reserve Board staffers recently put out two weighty papers in advance of the 4th Jacques Polak Annual Research Conference which is hosted by the IMF starting on Thursday (today).

On escaping the zero lower boundThe Economist
For forward guidance to have any impact on the economy, markets must believe that rates will stay close to zero even as growth and inflation pick up, thus making current borrowing and investment more attractive than they otherwise would be.

Fed’s Dudley Sees ‘Deep Seated’ Cultural, Ethical Lapses at Many Financial FirmsWSJ

  Q3 GDP
Roars To 2.8% Despite Weakest Consumer In Over Two Years – ZH
+2.8% y-o-y in Q3 – Calculated Risk
Analysis: Not Really Telling a Better Story – WSJ
Inventories Swell GDP; Will They Meet Q4 Sales? – WSJ
Advance Estimate Rises to 2.8% - dshort
Vital Signs: Solid GDP Rate Masks Shaky Details – WSJ
Economists React: ‘Some Concerning Undertones’ in GDP Gain – WSJ
Delivers An Upside Surprise – The Capital Spectator
Growth slightly above Expectations, but Weak Personal consumption – Calculated Risk
How GDP Report Shows Government Dragging on Growth – WSJ

China's Communists want unattainable goal of affluence without freedomThe Telegraph
China's Communist Party has promised us a "master plan". The Third Plenum of the 18th Party Congress this weekend will launch the next great leap forward, propelling China into the world's top league of hi-tech affluence.

IceCap Asset Management On 'Super Taxes' And Why Elvis Has Left The BuildingZH

Understanding Emerging Market Banks: A new
New micro-level data sets allow better testing of existing and new hypotheses on how banks operate in the often challenging environment of emerging markets. This column introduces an eBook that reports on the findings of a recent conference in London on using different research methodologies and data sources in banking research.

EMEA Weekly, Week 46Danske Bank

OPEC World Oil Outlook 2013OPEC
OPEC says will lose oil market share to shale, rivalsReuters

Inflation, deflation and QE, reduxCoppola Comment
Soc Gen have looked at QE.....and they have concluded that its effects may indeed be deflationary. Their reasoning is somewhat different from mine.

Voitatko vai häviätkö, jos asuntojen hintakupla puhkeaa?TalSa
Jos Suomessa – tai pääkaupunkiseudulla – olisi nyt asuntojen hintakupla, sen puhkeaminen voisi olla useimmille lähes yhdentekevä tai jopa hyödyllinen. Ekonomistin mukaan Suomessa on vallalla "käsittämätön" ajatus, että asumisen on oltava koko ajan kalliimpaa.

Menikö peruskoulu metsään?TalSa
Suomen koulujärjestelmä saa jatkuvasti kehuja. Taannoisen lehtijutun mukaan oppilaiden perustaidot kuitenkin heikentyvät. Eikä korkeakoulututkintokaan enää varmista työpaikkaa. Menikö jotain kenties vikaan?

Evan pamfletti: Tuloerojen kasvulle ei voi mitäänTalSa
Elinkeinoelämän valtuuskunnan (Eva) uuden pamfletin mukaan tuloeroja ja niiden kasvua tuskin voidaan estää. Kirjoittajien mielestä tuloerojen kanssa pitää osata elää, ja lopettaa verotiedoilla märehtiminen.

Henkisestä kestävyysvajeestaAkateeminen talousblogi

Himasen pamfletti loukkaa tieteentekijän oikeustajuaProfessorin ajatuksia