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Saturday, May 10

10th May - W/E: Best of the Week

Here are the ”best” from my posts of the ending week. Last week’s edition here.

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The Eurozone: out of the ashes?mainly macro
How can you be planning to move towards fiscal union when the governance structures of the Eurozone have clearly failed with a more limited set of tasks?

Spring 2014 forecast: Growth becoming broader-basedEC

“The urge to merge meets the dash for trash”FT
Matt King believes that the combination of the remarkably supportive liquidity environment of the past few years and the lack of better alternatives will remain in place for a while — even as credit fundamentals keep deteriorating and valuations become less and less attractive. This “greater fools game” is unlikely to end well…King’s new note is about the incentive for investors in European credit to shift down in quality.

France's Montebourg says euro rate is matter for politiciansReuters
Economy Minister Arnaud Montebourg stepped up France's push for a weaker euro on Wednesday, saying political leaders had the right to assess the right level for the currency in a position completely at odds with Germany's.

Draghi ABS Plan Seen Helping Banks, Not BusinessBB
Plan to spur growth by getting the ECB to buy asset-backed securities and persuade lenders to sell more of the bonds is being met with skepticism by the region’s biggest money managers.

The ECB must - and can – actBruegel
By coyly debating the definition and likelihood of deflation, while hoping for a renewal of inflation, the ECB is ignoring increasing risks, especially the growing cracks in the Italian fault line… The ECB may already have waited too late. Even if it were to finally act, its past delays may render its actions and 

Addressing weak inflation: The ECB’s Shopping ListBruegel
Think Tank Sees Workaround for ECB Bond BuysWSJ
Inflation forecasts by the ECB have fallen substantially below the two percent threshold. It was a mistake that the ECB did not act earlier. Conventional policy measures are unlikely to change inflation dynamics substantially. The ECB therefore needs to start buying assets. We propose to buy €35bn per months of a portfolio of ESM/EFSF/EU/EIB bonds, corporate bonds, and ASB. Buying international securities is not advisable as it would be against international commitments (full 25-page pdf-document).

ECB is delighted by the splendid prospect of deflationThe Telegraph
The great mystery is why the voting public of debtor states continue to put up with an arrangement that ensures years of mass unemployment

A Glance at the ECB’s DashboardWSJ

Why European QE Will Not Help (In 2 Simple Charts)ZH

The story of the American recovery in 15 chartsWaPo

All "Rules-based" Economists Agree: Fed Policy Is Too EasyZH

Fed seen hiking rates in June 2015 as U.S. job creation surgesReuters
Fed could start raising benchmark interest rates in just over a year, based on trading in U.S. short-term interest-rate futures after a government report showed employers added many more jobs than expected in April.

How tight is the US labour market?Danske Bank
The data is not conclusive but, given the Fed view, we believe the risk seems skewed towards a tighter job market than perceived by the Fed.

The Fed’s riposte on short v long-term unemploymentFT

All You Need to Know About Fed Policy in Three QuestionsWSJ
How much slack remains in the U.S. economy? Once the economy returns to normal, say 5.5% unemployment, where should the Fed expect short-term interest rates to be? What else should the Fed take into account?

China’s leaning towersFT
Nomura says every property market leading indicator at the national level turned down in Q1, and for most monthly indicators the rate of decline accelerated through the quarter. The question is no longer “if” or “when”, but rather “how much” China’s structurally oversupplied property market will correct.

A deep correction's on the horizon; how prepared are you?TradingFloor
The seasonal "Sell in May" effect is promising flat returns for the next five months or so. Several other factors are suggesting that this flat period could very well include a deeper market correction.

Oh the thinks you can thinkFT
Discussing the megatrends. Link to full report available.

The permanent damage from the crisisFT
OECD has published its latest guess at the permanent damage from the crisis and the different causes in different countries.

Euron tulevaisuus - Suomen vaihtoehdotMoreLiver’s

Saksan menestys ja Suomi Tyhmyri
On harhakuvitelma uskoa Saksan edun olevan Suomen etu

Onko itsenäisessä keskuspankissa mitään järkeä?Tyhmyri

Euro ja turvallisuuspoliittinen harha Tyhmyri
Keksittyjen puolusteluiden ketju jatkuu

Lipponen, Katainen ja maan etuPaavo Väyrynen / US
Kalliiksi tuli Suomelle Lipposen pyrkimys päästä komission puheenjohtajaksi.

Miksi euroalue on ongelmissa?Kansantaloudellinen aikakauskirja 4/2013
Tuomas Malinen & Tero Kuusi

Luottoluokitus euromaalle tärkeämpiRoger Wessman

EU:n suunta: Kuinka tiivis liitto?Ulkopoliittinen Instituutti
Tässä raportissa tarkastellaan Euroopan unionin (EU) kehitysvaihtoehtoja. Tarkastelun keskiössä ovat talous- ja rahaliitto EMU sekä siihen liittyvät, Euroopan rahoitus- ja velkakriisin liikkeelle sysäämät uudistukset.