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Sunday, September 14

14th Sep - W/E: Linkfest






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EUROPE
European ‘Project’ Not Irreversible, New Paper SaysWSJ
There is still a modest risk that a weak economy and rising political dissatisfaction could unravel Europe’s currency union, despite gradual, halting progress toward further integration there, according to new research.

Monnet's Error?Brookings
In spite of the worst recession in recent history, the Europeans still support the common currency. Europe seems trapped in catch-22: there is no desire to go backward, no interest in going forward, but it is economically unsustainable to stay still.

  WAYS OUT OF RECESSION
Do it yourself European Unemployment InsuranceBruegel
In their Policy Brief prepared for the September 13 informal meeting of EU finance ministers (ECOFIN), Claeys, Darvas and Wolff (2014) discuss the benefits, drawbacks and possible designs for a potential European Unemployment Insurance (EUI) scheme. They end their discussion by formulating 10 key decisions that policy makers would have to take before implementing such a scheme.

Eurozone recovery: there are no shortcutsVoxEU.org
There is a growing consensus that austerity is contributing to the Eurozone’s macroeconomic malaise, but also that spending cuts are needed in the long run to achieve fiscal sustainability. Some commentators have advocated a temporary tax cut financed by unsterilised ECB purchases of long-term public debt, accompanied by a commitment to future spending cuts. This column argues that such commitments are simply not credible – especially given the moral hazard problem created by central bank monetisation of debts.

Show us the money: EU seeks billions of euros to revive economyReuters
The European Union sought ways on Saturday to marshal billions of euros into its sluggish economy without getting deeper into debt, considering options from a pan-European capital market to a huge investment fund.

No miracles in southern Eurozone without resource reallocationVoxEU.org
As the most acute phase of the Eurozone crisis is over, the current-account balances of France, Italy, and Spain have improved. This column warns against complacency about this improvement, pointing at some structural factors that impede growth and damage competitiveness. Resources should be relocated towards the tradeable sectors and to those firms most prepared to grow and compete. If not, these three countries are likely to aggravate the dysfunctional duality of their economies.

  POLITICS
Commission Juncker: New team, new structures – new policies?DB Research
On Wednesday the Commission's new President Jean-Claude Juncker unveiled the next European Commission. As a new element, Juncker has established an intermediate level of six Vice-Presidents. This new formation of the college of Commissioners could enhance governance efficiency but could also cause rivalries over matters of competence.

Europe's Deadly Borders: An Inside Look at EU's Shameful Immigration PolicySpiegel
Along the frontiers between Spain and Morocco, Greece and Turkey and Hungary and Serbia, the EU is deploying brutal methods to keep out undesired refugees. Many risk everything for a future in Europe and their odysseys too often end in death.

V for Victoria Catalans Want Independence TooSpiegel
Catalonia wants to join Scotland in holding an independence referendum. But the Spanish constitution doesn't allow for secession. Nationalists in Barcelona are prepared to push the vote through anyway.

Euro zone ministers upset by broken French budget promisesReuters
France faced harsh criticism on Friday for failing to meet a deadline to put its finances in order, as frustrated euro zone ministers struggled to keep alive their post-crisis strategy for the bloc's stagnating economy.

Sweden’s election: The eight-year itchThe Economist
The centre-right government of Fredrik Reinfeldt has been a great success, yet voters may well eject it in favour of the Social Democrats

  GERMANY
Germany and the euro: You Kant do thatThe Economist
Many Germans fear that the European Central Bank is not on their side

Charlemagne: A Teutonic unionThe Economist
Behind the scenes, Germany quietly asserts its influence in Brussels

Only Germany is holding together as separatists threaten to rip Europe apartThe Telegraph
The increasing predilection for fragmentation across the continent will result in Teutonic political hegemony - if we're lucky

  EUROPEAN CENTRAL BANK
Is the ECB doing QE?VoxEU.org
Charles Wyplosz: Last week, the ECB announced that it would begin purchasing securities backed by bank lending to households and firms. Whereas markets and the media have generally greeted this announcement with enthusiasm, this column identifies reasons for caution. Other central banks’ quantitative easing programmes have involved purchasing fixed amounts of securities according to a published schedule. In contrast, the ECB’s new policy is demand-driven, and will only be effective if it breaks the vicious circle of recession and negative credit growth.

France and Germany oppose guarantees for ECB debt-buy plan: documentReuters
France and Germany oppose granting government guarantees to support the market for repackaged debt, a document seen by Reuters shows

The euro-zone economy: Asset-backed indolenceThe Economist
The European Central Bank’s plan for economic revival is underwhelming

  SCOTLAND
Britain needs greater unity not a messy break-up – FT
Will Scotland make the euro mistake? – Krugman / NYT
This isn't brave Scotland, it's foolishTradingFloor
Scottish independence: UK RIP? – The Economist
What happens after a Yes vote will shock the ScotsFT

However amicably a divorce begins, that is rarely how it ends. Talks will be bitter and prolonged

  UKRAINE / RUSSIA
It's payback time for Europe as Gazprom turns nasty – TradingFloor
U.S. intensifies sanctions on Russia over UkraineReuters
Putin says considering retaliation against 'strange' Western sanctions – Reuters
  
UNITED STATES
A few Analysts comments on FOMC meeting next weekCalculated Risk

  MACRO NUMBERS
August Retail Sales Bounce Back – dshort
Robust US retail sales add to picture of strengthening recovery – Danske Bank
Retail Sales increased 0.6% in August – Calculated Risk
Retail Sales Increase in U.S. by Most in Four Months – BB
U.S. retail sales move higher; consumer spirits rise – Reuters

September Michigan Consumer Sentiment Beats Expectations – dshort
Preliminary September Consumer Sentiment increases to 84.6 – Calculated Risk
U.S. consumer sentiment at 14-month high in September – Reuters
Consumer Sentiment in U.S. Rises to Highest in 14 Months – BB

ASIA
Are The Disinflationary Consequences Of China’s Economic Slowdown Beginning To Be Felt?Alpha Now

China August factory growth slows to near six-year low, calls grow for more stimulusReuters

MARKETS
A Cross Asset ObservationGlobal Macro Trading

EURUSD: Will the FOMC cease anchoring short-term USD rates?Nordea
The FOMC decision on September 18 will be crucial for the USD as the market is speculating in a removal of the “considerable period” phrase from its statement, doing so would “unanchor” short-term rates which would be USD-positive while barring to do so would likely prompt some USD weakness.

A Fireside Chat With Charlie MungerWSJ

Be grateful for drizzleLondon Review of Books
Donald MacKenzie on high-frequency trading

Lessons from Freestyle ChessCredit Suisse
Merging Fundamental and Quantitative Analysis

Beware of markets bearing gifts… but take them!Adam Grimes

Outflows Signal High Yield Credit Concerns Remain; Deals Pulled, Potential Downgrades SurgeZH

A Role Reversal For Stocks and BondsA Wealth of Common Sense

ECONOMICS
What's special about monetary coordination failures?Worthwhile

Secular Stagnation Part III – The Expectations FairyFistful of Euros

Quantifying the macroeconomic effects of large-scale asset purchasesvoxeu.org
Central banks have resorted to various unconventional monetary policy tools since the onset of the Global Crisis. This column focuses on the macroeconomic effects of the Federal Reserve’s large-scale purchases of mortgage-backed securities – in particular, through reducing the ‘mortgage spread’ between interest rates on mortgages and government bonds at a given maturity. Although large-scale asset purchases are found to have substantial macroeconomic effects, they may not necessarily be the best policy tool at the zero lower bound.

Krugman interviewPrinceton Magazine

How 'Keynes' Became a Dirty WordView / BB

The Fed’s un-announced 4% NGDP target was introduced already in July 2009Market Monetarist

OFF-TOPIC
The rise of Generation AmexObserver
Need an Intern with a Strong Sense of Entitlement and Bad Manners? Hire a Rich Kid

Hell in the Hot ZoneVanity Fair
As the Ebola epidemic rages, two questions have emerged: How did the deadly virus escape detection for three months? And why has a massive international effort failed to contain it? Traveling to Meliandou, a remote Guinean village and the likely home of Patient Zero, Jeffrey E. Stern tracks the virus’s path—and the psychological contagion that is still feeding the worst Ebola outbreak in history.

The Upside of PessimismThe Atlantic
The theory of defensive pessimism suggests that imagining—and planning for—worst-case scenarios can be more effective than trying to think positively.

The Hazards of Going on AutopilotThe New Yorker
The more a procedure is automated, and the more comfortable we become with it, the less conscious attention we feel we need to pay it.

FINNISH
"Perustulon monia vaikutuksia vaikea ennustaa"Verkkouutiset
Ajatushautomo Tänk selvittää, millä edellytyksillä erilaisia perustulomalleja voisi kokeilla.

Ei näillä vielä kuuhun mennäNordea
Euroopan keskuspankki yllätti uudella elvytyspaketilla syyskuun kokouksessa, ja EKP:n Draghi asetti elvytystoimien tavoitteet korkealle. Näihin tavoitteisiin ei päästä ilman valtionlainaostoja, ainakaan nopeasti. Samalla keskuspankin uskottavuus kärsi syyskuussa selvän kolauksen.

Pääkirjoitus Jyrki Kataisen pitäisi nyt uudistaa EU:n talouttaHS
Antti Tanskanen: Alijäämäiset EU-maat tarvitsevat paremmassa kunnossa olevilta jäsenmailta työtä, eivät lainoja.

Wahlroosin mukaan Suomi on pahemmassa ahdingossa kuin vuonna 1991HS
Björn Wahlroos, selviääkö Suomi talouskriisistä?HS / TV
Wahlroosin mukaan ay-liike on vaipunut "kvartaalisosiaalidemokratiaan", jossa maksimoidaan jäsenistön lyhyen aikavälin edut mutta samalla ammutaan lypsävä lehmä.

"Wahlroos - mihin unohtui euroratkaisu? "Verkkouutiset
Perussuomalaisten puheenjohtaja Timo Soini huomauttaa, että Björn Wahlroos unohti Helsingin Sanomissa julkaistussa haastattelussa Suomen talouden kritiikissään euron.

Kommentti: Suomelta yli 2,2 miljardia EU:n ja kehitysmaiden köyhilleIS

Eurooppa ei ole AmerikkaSK
Paul Krugman ei ota Euroopan heikkoutta kyllin vakavasti, kirjoittaa Juhana Vartiainen.

Romakkaniemi: Kataisella on komission puheenjohtajan valtaoikeudetHS

Taru Tujunen oli Kataisen rautanyrkki, Romakkaniemi on silkkihanskaHS

Superkomissaari Kataisen Mission ImpossibleJan Hurri / TalSa
Suomen entinen pääministeri Jyrki Katainen kuvaa uutta komissaarin tehtäväänsä haastavaksi. Termi ei liioittele vaan vähättelee pestin vaikeutta: tavoite on EU-talouden täyskäännös vuosien alamäestä ja anemiasta kelpo kasvuun. Elokuvissa mahdotonkin tehtävä voi onnistua, mutta komission kotipaikka on Bryssel eikä Hollywood.

Onko kaikki voitava tehty euroalueella?Raha ja Talous