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Sunday, August 31

31st Aug - W/E: The World

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Great Graphic: The Euro and Commodity PricesMarc to Market

Brussels round upEuropp / LSE
Jumpstarting the Eurozone’s economy, French government resigns, and the Italian left at a crossroads

Special Report: The billion-dollar fall of the house of Espirito SantoReuters
When a $365 million bond investment by Venezuela's state oil company went south, it portended doom for Ricardo Espirito Santo Salgado's 150-year-old financial empire. 

Scylla, Charybdis, and the EuroKrugman / NYT

Sweden: 2014 Article IV ConsultationIMF
Sweden’s economy has re-gained speed, following supportive macroeconomic policies and strong household demand. Employment has been rising, but the labor force expanded even more, resulting in higher unemployment mostly among vulnerable groups. Inflation remains very low, driven by external and domestic factors. At the same time, financial stability risks are an increasing concern, reflecting high and rising household debt, accelerating house prices, and Sweden’s very large banking system.

Untangling the Mess of Austrian Bank HypoWSJ
Tracing the Losses Behind a Lending Debacle That Has Cost Taxpayers Billions of Euros So Far

That sinking feeling (again)The Economist
If Germany, France and Italy cannot find a way to refloat Europe’s economy, the euro may yet be doomed

Can Europe Avoid Its Own “Lost Decade”?Alpha Now
The combination of low inflation and low growth, which Japan has experienced for the best part of two decades, is increasingly becoming a feature of the single currency bloc.

Lessons of the Great Depression for the EurozoneMainly Macro
Two of the major lessons of the Great Depression are to use fiscal stimulus to get out of a liquidity trap, and that it is far too painful to insist that uncompetitive countries should bear all the costs of readjustment. The Eurozone has failed to learn either lesson.

Eurozone delusionsMainly Macro
How confused the Eurozone macroeconomic debate has become. The confusion arises because talk of fiscal policy reminds people of Greece, the bailout and all that. That is not what we are talking about here. We are talking about what happens when the Eurozone’s monetary policy stops working.

EU Leaders to Meet on Growth Amid Recovery WorriesWSJ
EU leaders aim to meet in Italy in October and hold other discussions on the economy in the coming months amid concerns about the faltering recovery.

The German economy: Clouds aheadThe Economist
Recent vigour hides underlying weaknesses in Europe’s leading economy

Fear the fear Coppola Comment
It was fear of inflation, fear of debt and fear of extremism that enabled the Nazi party to come to power.

Germany to Europe: Help Isn't on the WayView / BB

Germany’s SinKrugman / NYT

Spain’s economic recovery: Bouncing backThe Economist
A surprisingly strong recovery, largely export-driven

Italy Back In Deflation With Lowest CPI Print In HistoryZH
European Inflation Lowest Since 2009

The Fall of FranceKrugman / NYT

Does France need a 21st century revolution?TradingFloor
Steen Jakobsen: France´s new government lacks a true mandate for reform * The policy of "dirigisme" is outmoded and ill-informed * Macro-level changes are needed if the French economy is to recover

France: Good news, but … - Nordea
A more coherent government is a condition for progress, not a guarantee

NATO’s summit: Mr Putin’s wake-up callThe Economist
The Western alliance is responding better to Russian aggression in Ukraine. But there is more to do

EU summit: leaked language on Ukraine sanctionsFT

In Putin’s Russia, financial plumbing blocks youFT
Disconnecting Russian banks from Swift?

Europe’s Russian
The conflict in Ukraine and the sanctions against Russia have already affected the Russian financial markets. This column discusses the repercussions for the rest of Europe of possible disruptions in the trade and financial flows with Russia. Eastern European countries could be seriously affected by a slowdown in the Russian economy due to their close links with Russia. Western countries – despite having looser links with it – could also experience significant effects.

This means war: miscalculations have pushed Ukraine and Russia over the edge – FT
Ukraine says Russian tanks flatten town; EU to threaten more sanctions – Reuters
EU Says Russia Must Scale Back in Ukraine or Face New Sanctions – Reuters
EU Preps Russia Sanctions as Ukraine Warns of Invasion – BB

The ECB and the BundesbankMainly Macro
Do not blame the Bundesbank for the flawed architecture of the ECB. The ECB abandoned the critical aspect of Bundesbank policy, which was to target an aggregate closely related to nominal GDP.

ECB preview: ABSolutely interesting even without QE and rate cutsNordea
Rate cuts don’t make much sense. QE would be premature. Watch out for any announcements on ABS purchases.

When the economic record is broken it is time for a new tuneTradingFloor
The Fed's stance on inflation is being mired by too many views * The US CPI has been trending lower since a peak in 2011 * Any sensible economist should check and recalibrate their stance

All you need are 24 indicators to understand the labor marketWaPo

This is why it feels like the recession never endedWaPo
From the start of the recession in 2007, for all but the top wage earners, real (inflation-adjusted) earnings are actually down.

Something really important is starting to happen in the US economyQuartz
It’s finally happening. American companies are spending again.

Merrill and Goldman Forecasts for August Non-Farm PayrollsCalculated Risk

China's bond market reforms may backfireTradingFloor
China is about to take the leap that will finally end the 19-year ban on direct debt issuance by provincial governments. The development has been hailed as positive for reform and transparency. Yet generating hardly any discussion is the crucial question of what would happen to investor demand for local issues once they are stripped of the comfort of implicit sovereign support.

Foreigners in the firing line as Chinese regulators take aimTradingFloor
Foreign companies swept up in China’s anti-trust investigations may soon find company in misery. The threat of rising defaults in wealth management and other investment products is focusing regulatory attention on the liabilities of fund management companies and that of their foreign partners.

Don’t bet on a real appreciation of the renminbiThe Market Monetarist

Markets signaling return of economic weakness in ChinaSober Look