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Sunday, April 6

6th Apr - W/E: The World

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In Euro We TrustCraig Willy
Are European institutions the secular descendants of the medieval Church?

How rich nations benefit from EU
One concern with EU enlargement is that relatively poorer countries benefit more from becoming members. This column uses data from the 1973 and 1995 enlargements to show that richer countries also benefited a lot from joining the EU. Per capita incomes would have been considerably lower had these countries not joined the EU when they did. Yet, the difference between the estimated benefits for 1973 and 1995 enlargements is large, and thus, should not be attributed to differences in per capita incomes at the time of joining.

Euro crisis 2.0 will need a new shock absorberReuters
European banks kept yields in check by buying sovereign debt in 2010-13. Now that Basel III rules force losses to be deducted from capital, banks like BPI are shedding their holdings. It unpicks the notorious “doom loop,” but leaves the ECB explicitly on the hook in future.

Putin's Rejection of the West, in WritingView / BB
A document called "Foundations of the State Cultural Policy" has been under development since 2012. A special working group under Putin's chief of staff Sergei Ivanov will soon roll it out for a month of "public debate" before Putin gets to sign it. Quotes from the culture ministry's draft, presumably the basis for the final one, have leaked out.

Putin Debt to Equity Hit on Crimea Seizure: Russia Reality CheckBB

SEK FI & FX Strategy - Riksbank scenario analysisNordea
The rate announcement on 9th April is an important one, with the capability of shaping the trading pattern for quite a while. In this analysis we discuss three different scenarios and the likely market implication

Charlemagne: Trading placesThe Economist
How China is affecting Europe’s position in the world.

Frost in spring: The recovery may be warming but inflation is coolingThe Economist
Seen from another standpoint the euro zone is an accident waiting to happen. As inflation slips ever lower, a slide into Japanese-style deflation looks increasingly likely. That would raise an already onerous debt burden in real terms and pull down growth.

„Trilog“: Schatten-Gremium beschließt EU-GesetzeDWN
Google Translation Shadow body decides EU laws: In the EU, a secret body has assumed the government shops: in the so-called trialogue drop the decisions about laws off the already rudimentary democratic structures. The elections to the EU Parliament are a farce against this background. Europe's citizens will be extras in a bad political theater.

Brussels Says "No" to France Proposal for Deficit Target LeniencyMish’s

ECB "Models" €1 Trillion QEZH
Where did the ECB "get" all of these bright and original ideas? Why Goldman Sachs of course,

Draghi Deflation Fight Seen on Different QE Path to FedBB
While U.S. firms tap markets for about three quarters of their lending, companies in the euro region rely on loans from banks for the same proportion of their borrowing. That makes it harder for the ECB to use asset purchases as a way to improve credit conditions for small-and-medium sized enterprises

ECB models trillion euro asset purchase program: newspaperReuters
ECB has modelled the effects of buying a trillion Euros of assets to ward off deflation, a German newspaper reported on Friday, a day after the ECB's president said radical policy action might be needed.

ECB must spend big to lift prices, study showsCNBC
ECB would need to buy assets worth €1 trillion ($1.4 trillion) to lift inflation by as little as a fifth of a percentage point,

Is the €-area in 2014 like Japan on the dawn of deflation?Money Matters
If you are impatient and somewhat trust my judgment, let me give first my synthetic answer to the title question: out of the five criteria I use to compare the current situation in the €-area to that in Japan at the end of the ´90s, two (current situation of the banking sector and inflationary expectations) do not indicate that the €-area is in a better position than Japan when it was about

EC & ECB Statement following surveillance mission to SpainECB

Italian, Spanish yield drop below US yieldsZH, BB

Tighter Fed Policy Will Boost EconomyBB
The increasing likelihood of a Federal Reserve interest rate increase next year should help rather than slow the U.S. economy, according to UBS AG.

Fed Releases Staff Memos Prepared for December 2008 Policy MeetingWSJ
the release of a package of memos Fed staff prepared for officials in December 2008 ahead of that month’s policy meeting. Policy makers at that meeting ventured into uncharted territory for the Fed, voting to cut short-term interest rates to effectively zero. The memos on the costs and benefits of the policy options at the Fed’s disposal were unveiled by former Fed official Joseph Gagnon in a blog post Friday for the Peterson Institute for International Economics

It IS about the risk premium!Humble Student
Unless we start to see blowout macro data, such as the upcoming jobs report, or Earning Season brings such surprising good news as to boost the earnings growth outlook, investors may wish to think about selling in May and to go away.

More Wall Street economists see rate hike in first half of 2015Reuters
More Wall Street economists now believe the Federal Reserve will raise interest rates in the first half of 2015, as evidence builds that the U.S. economy has regained some momentum lost during an unusually rough winter, a survey showed on Friday.

Fed Gov. Jeremy Stein is resigning. Here are his greatest hits.WaPo