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Sunday, December 22

22nd Dec - Weekender: The World

Previously on MoreLiver’s:

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Brussels blog round up 14 – 20 DecemberEuropp / LSE
Banking union, EU downgrade, and can Renzi change Italian politics?

The Eurozone, Germany and the ECB’s interest ratesCredit Writedowns
Solving Germany’s investment problem requires both low interest rates and increased government investment. The ECB is at least attempting to address the first of these. But when is the German government going to accept its responsibility for the second?

The Eurozone’s “Democratic Deficit”: A Reading List for the PerplexedCraig Willy
This post provides a reading list of major authors, with summaries, on the origins and nature of the lack of demoracy in the eurozone.

Is corruption holding back convergence?DB Research

European Leaders Say ‘No’ to More German BondageWSJ
EU leaders on Thursday evening watered down a German plan that would have required governments to sign "binding" contracts committing them to policy overhauls.

Banking union: ECB independence at risk?
The literature has overlooked the distributional effects of the tradeoff between monetary and financial stability. In a political economy framework, heterogeneity in voters’ portfolios can cause the degree of central bank independence to differ from the social optimum.

Not Fit for the Next Crisis: Europe's Brittle Banking UnionSpiegel
German Finance Minister Wolfgang Schäuble has negotiated a European banking union suited perfectly to his country's tastes. It looks like a victory, but it could prove to be very expensive if Europe or Germany face another financial crisis.

€ liquidity is getting more valuable: what can be done about it?Money Matters
Should the tensions on the money market prove not to depend just on the reinforced end of year effect and should the ECB want to buttress with facts its forward guidance, It would have two fairly effective and not too costly tools to use: stopping the absorption of liquidity injected through the SMP or providing a new VLTRO that would roll over existing ones.

Hans-Werner Sinn: Rescuing Europe from the Ground UpProject Syndicate
Europe’s crisis is far from over, though the insurance that the ECB has offered, free of charge, to buyers of EU members’ government bonds has temporarily calmed financial markets. Europe should now use the calm between the storm fronts to reformulate its monetary union, including provisions for temporary exit.

How to Measure Corporate America’s Huge ProfitsWSJ

The 13 Most Important Charts of 2013Economic Policy Institute

5 Things To Ponder: The Taper Editiondshort
5 disparate views on the effect, and potential outcome, of the Federal Reserve's latest move.

Great Graphic: The Fed's Mandates: How Close?Marc to Market
Although it is commonly talked about as two mandates, and even Fed officials often use that short-hand, in fact, the Fed has three mandates.  As it celebrates its 100-year anniversary, it behooves us to keep the third mandate in mind:  financial stability.

Fed’s Rosengren: FOMC Dissent Focused on Counseling PatienceWSJ

Despite Falling Short of Goals, Fed Suffers From QE-FatigueWSJ

This is how history should judge Ben BernankeWaPo

The big steepener unwindSober Look
Why would the 5-year note sell off the most while the long bond rallied?

The Twist-er Tantrum: Bernanke Unleashes 5-Sigma Curve FlatteningZH
The term structure of Treasury yields has collapsed by 5 standard deviations to 3-month flats.

Citi Warns Of "Deja Vu All Over Again" For Treasury Bond Bears ZH
Previous endings of the Fed’s bond buying programs have seen a quick spike in yields that proves to be short-lived as the reality of a still weak global economic backdrop takes hold.

Declining Labor Force Attachment and Downward Trends in Unemployment and ParticipationFED

Fewer Than Half of Young People Will Be in Work ForceWSJ

FAQ: Unemployment benefits for 1.3 million expire next weekWaPo

Another look at labor force participationSober Look

China: Money market stress returnsDanske Bank
There is again focus on the Chinese money market where interest rates have increased markedly in recent days. The recent spike in interest rates has also started to weigh on the Chinese stock market.

Confusing Signals in Chinese Financial Policy Reflect Challenges of ReformWSJ

China Money Market Interest Rates JumpWSJ
Interbank Rates Hit Highest Since the Summer Despite Central Bank's Cash Injection

No, the Chinese Communist Party Isn't Threatened by Income InequalityThe Diplomat
Many Western commentators don’t understand Chinese views no income inequality.