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Sunday, November 2

2nd Nov - W/E: Linkfest

The world, economics, markets, off-topic and Finnish-language stuff for your weekend.
Previously on MoreLiver’s:

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Book Review: Europe on the BrinkEuropp / LSE
Europe on the Brink brings together a selection of seven important voices in a discussion of the biggest economic issues currently facing Europe. Adrián Cosentino writes that with essays from figures such as Nobel Laureate Joseph Stiglitz, the book will be of interest in particular to students of European politics and economics.

Tough tone of Trichet letter to spark new controversyIrish Times
The letter is understood to threaten the removal of emergency funding

French public finances: Budget, fudge itThe Economist
France wriggles free from the hard taskmasters of Brussels

Europe's Deadly Fiscal ParalysisView / BB
Squabbling over rules that made no sense to begin with is no substitute for real reform.

Russia and the West: Hard talkThe Economist
What lies behind Vladimir Putin’s latest anti-American rant

Deutsche Bank: A weary lenderThe Economist
Germany’s flagship bank is in trouble. Some is of its own making

European banks: Stress reliefThe Economist
Europe’s banks are in decent shape—but that is not enough to repair its economy

How Bank Credit Is Holding Back Europe’s RecoveryWSJ

Banks breathe sigh of relief over UK leverage ratioFT
The BoE’s Financial Policy Committee said it wanted big UK banks to hold capital equal to 4.05 per cent of their assets from 2019 onwards, up from 3 per cent now. That could be increased in boom times by an extra buffer of another 0.9 per cent to cool excessive lending. Some bankers had worried that the ratio could be set well above 5 per cent,

The UK's Bank Stress Tests Are Just As Flawed As The EU'sForbes
UK’s adverse scenario is higher inflation and lower asset prices, but the economy is most vulnerable to lower inflation.

Draghi can only dream of moving like BOJ’s KurodaReuters

The mid-term elections: What they’re all aboutThe Economist
On November 4th America is set to kick the president and hand control of the Senate to the Republicans

Quantitative pleasingFT

QE, who needs ya? No, don’t answer thatFT

Another Kocherlakota DissentTim Duy’s Fed Watch
ocherlakota's dissent raises the possibility that labor data will trump inflation data in policy considerations. It also suggests that given the pace of labor market improvement, they are not writing off the possibility of a March rate hike (although that is not my baseline). 

US: Changes to Fed’s tool box point to tighter policyNordea
New important changes to the Fed’s tools for adjusting rates indicate that the central bank is stepping closer to the first rate hike.

China's global financial diplomacy moves into higher but uncertain gearNikkei
George Magnus: Whatever the course of capital liberalization, there is little question that China will use capital in the pursuit of political initiatives it sees as advantageous

Bank of Japan's Money Can't Match China's EngineView / BB
William Pesek: As Shinzo Abe looks for new growth engines to reinvigorate Japan, he's ignoring the most obvious one.

[Quicktake] Abenomics - Japan's Economic Shock TherapyBB

Why Hasn’t Inflation Picked Up in Japan?WSJ

Japan risks Asian currency war with fresh QE blitzThe Telegraph
Ambrose-Evans Pritchard: The Bank of Japan is mopping up the country's vast debt and driving down the yen in a radical experiment in modern global finance

Thoughts on JapanGMT
It’s not clear how much of the move in asset prices were driven by the BoJ, and how much by the GPIF announcement. This question is key – because the BoJ can print forever, but the GPIF can only rebalance like this one more time.

More Thoughts on “Fad Investing”PragCap

Facts and myths about bank leverage ratiosMedium

Can you beat a dart-throwing monkey?TradingFloor
We show that random portfolios beat S&P 500 most of the time with the average random portfolio generating 1%-point in excess annual return over S&P 500, raising a lot of questions. Is the outperformance driven only by the size factor and should long-only equity managers shift their benchmarks from their current ones to random indices?

Fear of illiquidityMoneyness
Say that you are petrified that a day will come when markets will be too illiquid for you to convert your wealth into the things you need. There are two ways for you to buy complete peace of mind.

Morgan Stanley's European Equity Strategy Data GalleryZH

John Maynard Keynes Is the Economist the World Needs NowBusinessWeek

The takeaway from six years of economic troubles? Keynes was right.Reuters
Anatole Kaletsky: In the era of high inflation when monetarism was introduced, the idea that interest rates could always be cut by enough to revive private economic activity was reasonable enough.

In praise of macroeconomists (or at least one of them)mainly macro

Apologizing to JapanKrugman / NYT

The untold story of the Eurozone crisismainly macro
So the reason why Germany seems to have largely escaped the second Eurozone recession of 2012/3 is that it pursued (perhaps unintentionally) a beggar my neighbour policy within the Eurozone. Low nominal wage growth in Germany led to lower production costs and prices, which allowed German goods to displace goods produced in other Eurozone countries both in the Eurozone and in third markets.

Fiscal Devaluation in a Monetary UnionIMF
We find that a FD in ‘Southern European countries’ has a strong positive effect on output, but mild effects on the trade balance and the real exchange rate. Since the benefits of a FD are small relative to the divergence in competitiveness, it is best addressed through structural reforms.

Romer and Romer vs. Reinhart and RogoffWSJ
Declines in economic output, as measured by gross domestic product and industrial production, following crises were on average moderate and often short-lived.

Blaming Easy Money for Alien InvasionsView / BB
Some people will always despise QE, no matter how benign it turns out to be in practice.

Secular stagnation: the scary theory that's taking economics by stormvox

Will it matter when the Fed has “traction?”The Money Illusion

Central Banks that make the same mistake are ‘rewarded’ with similar outcomesThe Faint of Heart

Quantitative pleasingFT

Global imbalances: Whither now?
Global current-account imbalances narrowed substantially over the past eight years. As a result, the systemic risks associated with these imbalances have decreased. This column argues that despite this narrowing, the net creditor and debtor positions diverged further. Some large debtor economies remain exposed to changes in market confidence. Containing remaining imbalances requires a rebalance in global demand.

Interview with an Islamic State Recruiter: 'Democracy Is For Infidels'Spiegel
How does Islamic State think? How do its followers see the world? SPIEGEL met up with an Islamic State recruiter in Turkey to hear about the extremist group's vision for the future.

The Police Are Still Out of ControlPolitico
I should know. By FRANK SERPICO

William Gibson Writes the FutureGQ
He coined the term cyberspace before we even knew cyberspace existed. He imagined reality TV years before it was everywhere. He's made the leap from cult novelist to mega-selling oracle by writing intensely enjoyable techno-thrillers about viral-ad agencies and shadowy clothing designers and Cuban-Chinese data traffickers. And while William Gibson insists that he's the last guy to know what's coming next, predictions he made decades ago keep coming true. Which is a little alarming, actually. Because his new novel, The Peripheral, is his most dire yet

Crossing Off the Red CrossView / BB

This is why flying on a plane makes you feel terriblevox

22 maps and charts that will surprise youvox

38 maps that explain Europevox

CIA Hiring Chief Demystifies Agency's RecruitmentForbes
And Reveals Top Interview Questions

Lunch with the FT: Sir John Sawers FT
In his first on-the-record interview the UK’s spy chief talks about risk, the Snowden revelations and reforming MI6

The Holder of SecretsNew Yorker
Laura Poitras’s closeup view of Edward Snowden.

Remembering the fall of the Berlin WallFT
When the Wall fell 25 years ago, the bankruptcy of East German communism had long been clear. Yet there was nothing inevitable about the events of November 1989

My CaptivityNYT
Theo Padnos, American Journalist, on Being Kidnapped, Tortured and Released in Syria

Stephen King: The Rolling Stone InterviewRolling Stone
The horror master looks back on his four-decade career

FT interview with Google co-founder and CEO Larry PageFT
Even the search engine’s original mission is not big enough for what he now has in mind

Lunch with the FT: Richard BransonFT
This interview was conducted before Virgin Galactic announced on Friday that a serious ‘in-flight anomaly’ had resulted in the loss of SpaceShipTwo in a test flight in Mojave.

Artificial intelligence: machine v manFT
Computers will soon become more intelligent than us. Some of the best brains in Silicon Valley are now trying to work out what happens next

A human writes . . .  - FT
For all the Silicon Valley gains, our world is now being shaped by people who think man i

13 classic scenes that explain how horror movies workvox

Rational regretinterfluidity
Most of us do not perceive of our life histories as mere throws of the dice, even if we acknowledge a very strong role for chance. Most of us, if we have tried some unlikely career and failed, will either blame ourselves or blame others. We will look to decisions we have taken and wonder “if only”.

Journalists need a point of view if they want to stay relevantThe Conversation
What has happened to journalism?medium
Redeeming an institution that is essential to democracy

This photo of Kim Jong Un looks like a still from a Wes Anderson movievox
North Korea's gulags: a horror "without any parallel in the contemporary world"vox

Euromaat yhä tiukemmin velkaloukussa Jan Hurri / TalSa
Euromaat ovat omalaatuisessa velkaloukussa, johon ne juuttuvat sitä tiukemmin kiinni mitä pontevammin pyrkivät irti. Julkisen talouden velkataakka kasvaa, vaikka sen piti kutistua. Yksi selitys löytyy EU:n toispuolisista taloussäännöistä ja niiden ristiriitaisista vaikutuksista.

20 vuotta Eussa: Entä jos olisimme sanoneet EU:lle EIHS
Suomi olisi aluksi ollut Norjan, sitten Viron ja nyt Ruotsin läheinen kumppani.

Lamalääkkeitä: lasketaan työnantajamaksuja?Akateeminen talousblogi

Aki Kangasharju: Kimalaisen lento katkesiNordea
Jos yksityisen sektorin työpaikkojen määrää ei saada pian kasvuun, kimalainen tippuu korkealta ja kovaa.

EU ja Venäjän kaupan pakotteiden aikaBrysselin kone / YLE
Osastopäällikkö Markku Keinänen ulkoasiainministeriöstä taloudellisten ulkosuhteiden osastolta puhuu EU:n ja Venäjän välisistä pakotteista, eli esimerkiksi siitä mikä on pakotetilanne nyt milloin pakotteet ehkä puretaan ja millä metodeilla. Lisäksi ohjelmassa keskustellaan myös muusta EU:n kauppapolitiikasta.

Talouskriisit tuottavat "keynesiläisiä"Henri Myllyniemi / US