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EUROPE
EU plans
to streamline but not change key budget rules – Reuters
The
European Commission wants to streamline the EU's complex rules
governing economic policy-making, but won't change the two key laws that
sharpened budget policy control during the debt crisis, a top official
responsible for the euro zone said.
The
European Commission should be able to veto national budgets if they breach the EU's
common fiscal rules, German Finance Minister Wolfgang Schaeuble said on Friday.
The key
question ahead of the parliament voting on the government’s budget proposal due
3 December is whether the Sweden Democrats will vote on the right-wing
coalitions’ budget bill or not. If they do, this could lead to a government
crisis.
Avoiding
Lost Decades: European Edition – Econbrowser
Uncompromising
attempts to bind Europe together may instead hasten its abrupt and unmanageable dissolution,
with unknown consequences. Making it easier for nations to take small steps
away from European integration may be the best way to save the benefits of
union in the long run.
Swiss
Gold-Fetichism – An Expensive Decorative Effort – Place
du Luxembourg
INVESTMENT PLAN
Jean-Claude
Juncker, president of the European Commission, has provided details of the
commission's plans to kickstart investment spending in Europe and seed growth.
Jean-Claude
Juncker’s investment package is laughably inadequate
Jean-Claude
Juncker’s kick-start for the economy rests on some magical thinking
CRISIS COUNTRIES
Special
Report: Why Italy's stay-home shoppers terrify the
euro zone – Reuters
Podemos’s
spending plans lack financing ideas – FT
EUROPEAN CENTRAL BANK
ECB
preview: An interim step ahead of sovereign QE next year – Nordea
The
question seems to be when, not whether the ECB will extend its asset purchases.
Time is not ripe for sovereign QE. However, we expect the ECB to extend the
purchases to investment grade corporate bonds and possibly also agency and
supranational bonds. Even such an outcome is unlikely to push bond yields much
lower in light of the falls already seen, while the euro should feel some
pressure. If we are wrong, Draghi will at least sound dovish and leave the door
wide open to new stimulus in Q1.
How
innovative should central banks be? – ECB
Keynote
speech by Sabine Lautenschläger, Member of the Executive Board of the ECB
ECB
bond-buying: last action hero – FT / Youtube
The
European Central Bank began its purchases of asset-backed securities to
stimulate the eurozone economy on Friday. But it is already looking at doing
more.
It's now
or never, Mr. Draghi
– TradingFloor
Stephen
Pope: Regional inflation in Eurozone at five-year lows * Bundesbank blocking
ECB's path to sovereign bond purchases * Italian unemployment hits highest
level since 1977
Inflation
declined - but ECB likely not to act next week – Handelsbanken
Draghi
needs support on QE in the eurozone – FT
The effect
of trying whatever it takes may raise expectations of inflation and growth by
itself
Markets
think it will happen but will not work
How
innovative should central banks be? – ECB
ECB's
Lautenschlaeger says sees little room for further easing – Reuters
Keynote
speech by Sabine Lautenschläger, Member of the Executive Board of the ECB
ASIA
Has China really blown $6.8 trillion on
worthless investments over the past five years? This is the startling claim
made by two Chinese government researchers that has, understandably, caused
quite a stir. If true, it would mean that fully 37% of Chinese investment since
2009 was wasted on building bridges to nowhere and homes with no one in them.
MARKETS & ECONOMICS
I see
currency wars – FT
A Long
Look at Short-Termism: Questioning the Premise – Credit
Suisse
Economic
Development and the Effectiveness of Foreign Aid: A Historical Perspective – naked
capitalism
Potential
Output and Recessions: Are We Fooling Ourselves? – FED
Deep
Recessions Leave Permanent Scars, Fed Research Finds – WSJ
Harsh
downturns tend to permanently lower the economy’s growth potential, according
to new research from the Federal Reserve that upends conventional theory and
suggests early and aggressive policy action is advisable when dealing with
recessions.
Measuring
financial conditions in major non-euro area economies – ECB
Causes
of the G7 fixed investment doldrums – VoxEU.org
The
post-Crisis G7 economies have suffered weak business investment despite record
low interest rates and the favourable financial positions of corporates. Some
consider this the ‘new normal’ arising from secular, supply-side forces that
have contributed to declining potential growth rates. This column argues that
structural factors alone are not sufficient to explain the current weakness in
investment rates. There is thus room for positive surprise if companies realise
the pent-up investment demand.
Welfare
spending across the OECD – FT
Contrary to
stereotypes, the US consistently spends more than Canada, while Germany spends more than Greece and the Norwegian government is
stingier than most of Europe. Iceland’s ranking also surprised us.
Within-
and cross-country price dispersion in the euro area – ECB
You Want
a Bigger Paycheck? Convince Me – View
/ BB
OIL
Global:
Oil prices strain (some) central banks' credibility – Nordea
A
supply-driven drop in oil prices is net-positive for medium-term i7nflation
outlook. But this matters little for central banks whose credibility is being
challenged. Instead, it rather increases the risks for already-challenged
central banks (e.g. ECB). The FX theme of monetary policy divergence will
remain on track. Inflation expectations will remain crucial in the Euro Area
and are rising in importance in the US.
OPEC
Meeting."The time has come. To say fair's fair" - or? – Nordea
OPEC
decided to leave the production quota unchanged at 30 mb/d. Although the
expectations about the outcome ware evenly split among analysts, the market
reacted with disappointment. The Brent oil price fell by USD 4/barrel to USD 72.69/barrel
after the decision was announced.
Oil
prices and monetary policy – Long
and Variable
A simple
guide to the sudden collapse in oil prices – WaPo
Oil
Enters New Era as OPEC Faces Off Against Shale – BB
OPEC’s
decision to cede no ground to rival producers underscored the price war in the
crude market and the challenge to U.S. shale drillers.
Breakeven
Oil Prices For Every Drilling Project In The World – BI
MONETARY POLICY
Monetary
Policy When the Spyglass Is Smudged – SF
FED
An accurate
measure of economic slack is key to properly calibrating monetary policy. Two
traditional gauges of slack have become harder to interpret since the Great
Recession: the gap between output and its potential level, and the deviation of
the unemployment rate from its natural rate. As a consequence, conventional
policy rules based on these measures of slack generate wide-ranging policy rate
recommendations. This variability highlights one of the challenges policymakers
currently face.
Are some
workers “slacker” than others? – FT
We don’t
really understand why inflation-targeting central bankers closely monitor the
job market. For starters, there is something unseemly about connecting consumer
price inflation to theories of labour market “slack”. The implication of ideas
such as the “non-accelerating inflation rate of unemployment” is that innocent
people should lose their jobs if the weighted-average nominal cost of goods and
services rises a bit faster than an arbitrary target.
Central
banks, December: ECB gears up for QE, but not quite yet – TradingFloor
Send in
the helicopters? – The Economist
Would QE,
as so far practiced, be the best approach? The idea of a helicopter money drop
has been mooted by Milton Friedman and others.
DEBATE
Keynes Is
Slowly Winning – Krugman
/ NYT
Keynes is
slowly losing (winning?) – Marginal
Revolution
Understanding
Anti-Keynesians – mainly
macro
In Front Of
Your Macroeconomic Nose – Krugman
/ NYT
OFF-TOPIC
How To
Deal With Difficult People: 5 New Tips From Dan Pink – Bakadesuyo
When to
Book Your Plane Ticket: A Guide – The
Atlantic
Two
economists share what they've learned from tracking airfare's seemingly
inscrutable fluctuations.
26
Pictures Will Make You Re-Evaluate Your Entire Existence – Buzzfeed
It was
top-secret in 1959 and remains almost completely unknown to this day - the
first Soviet nuclear missile base outside the USSR. But it is still there, crumbling
and steadily being reclaimed by nature in the forests north of Berlin.
Vogelsang
in Ruins – Uncube
An
abandoned Soviet garrison rotting in the Brandenburg woods
Behind
the Writing on the Stalls – The
Atlantic
Why do
people scribble on bathroom walls? Other than, you know, for fun.
Link
feast - psychosis special – BPS
His
career as a trader flamed out, so he tried oil tycoon – WaPo
Bryan
Sheffield never planned on returning to Texas. He did. Now he’s the billionaire
CEO of Parsley Energy.
Mohnish
Pabrai's Million-Dollar Advice For A 12-Year-Old Investor – Forbes
The
Jihad Cult: Why Young Germans Are Answering Call to Holy War – Spiegel
Hundreds of
young German Islamists have traveled to Syria to fight with the terrorist group
Islamic State. SPIEGEL explored the extremist scene in Germany and the fascination with jihad in
order to find answers about what drives people to join the murderous cult.
Why your
family drives you crazy – VOX
Research
shows that the people who most annoy us are our loved ones and that, at the
same time, we tend to be cruelest to the ones that we love the best. The
question is: why?
Enthusiasts
and Skeptics Debate Artificial Intelligence – Vanity
Fair
Kurt
Andersen wonders: If the Singularity is near, will it bring about global techno-Nirvana
or civilizational ruin?
How
Brands Become Cults
– The
Atlantic
The future
of marketing will be about identity, not information
Of
Course There Are Black Stormtroopers in Star Wars – The
Atlantic
Fans
objecting to John Boyega in The Force Awakens' teaser aren't just close-minded—they
misunderstand the galaxy far, far away.
Rock
Snob: Robot-Rock Originators Kraftwerk – The
Scene
Music
Snob: Inside Moby's Drum-Machine Collection – The
Scene
How the
World’s First Computer Was Rescued From the Scrap Heap – Wired
A Guide
to Flatland: What It’s Like to Live in Two Dimensions – Wired
Magnus
Carlsen, an unlikely chess master – FT
He
moonlights as a model, naps on the job, skips homework – and snuffs out every
rival
FINNISH
Onko valtiovarainministerin värillä väliä? – Sakari
Heikkinen
Kysyntä, tarjonta ja Hesari – Akateeminen talousblogi
Kotitalouksien talletuskanta supistuu – Tarinoita
taloudesta
David Cameronin maahanmuuttolinja otettava malliksi koko
EU:lle – Professorin
ajatuksia
"Ajoneuvoveron voimassa pitäminen ei lainkaan
mahdollista" – IS
Euroopan Unionin vaatimukset autoilun ja liikenteen sääntelyn
vapauttamiseksi ovat suuri uhka Suomen nykymuotoiselle verotukselle, paljastaa
Eduskunnan arkistosta löytyvä muistio.
”Stubb painosti kirjoittamaan myönteisemmin TTIP-kauppasopimuksesta”
– KU
Alkoholistin puoliso ei helposti kaada kulissejaan – TalSa