The week
was dominated by the European crisis with suggestions of Spanish bailout, while
the plans for an ever-closer union are made in the background. Greece seems to be getting more time, so
it is of less immediate interest to markets right now. In US, the fiscal cliff,
elections and possible trouble with corporate earnings are the most important
themes.
Previously on MoreLiver’s
EUROPE
The Truth About Sovereignty – Project
Syndicate
If the EU's
future is now in doubt, it is because sovereignty stands in the way once again.
By denying that European integration hinges on restraining national
sovereignty, Europe’s leaders are misleading voters,
delaying the Europeanization of democratic politics, and raising the costs of
the ultimate reckoning.
Supervisory
failures were key to the 2008 financial crisis. This column argues that
supervisory governance has improved but that more is needed. The reforms should
include a separation of macro- and micro-supervision since this allows for
checks and balances that complement and strengthen governance.
'We're ready to walk out on Europe': Prime Minister's closest ally
Michael Gove sparks EU furore with dramatic admission – Daily
Mail
Education
Secretary has told friends that he would vote to leave if there was a
referendum today on whether the UK should cut its ties with Brussels…He has discussed his views in
detail with David Cameron
What do Henry Kissinger, Le Duc Tho, Yasser
Arafat, President Obama, And The European Union Have In Common? – Testosterone
Pit
Maybe the
Norwegian Nobel Committee ran out of good candidates for this year’s Novel
Peace Prize and didn’t want to transfer the money to the Main Fund, as they’d
done in the past. So they handed it to the European Union, which triggered an
avalanche of snickering and mocking. It wasn’t exactly an obvious choice. Its
government is engaged in a phenomenal power grab, and its sub-group, the
Eurozone, is mired in an extraordinarily screwed-up debt crisis that has led to
bloody protests in the streets.
Euro area labour markets and the crisis – ECB
(pdf)
EU Cohesion spending: policy can deliver what
economic research cannot – bruegel
While public attention is focused on the
eurozone crisis, EU Member States and the European Parliament are locked in a
struggle over reforming the Common Agricultural Policy – Europp
/ LSE
Gauging the effects of fiscal stimulus packages
in the Euro area – ECB (pdf)
For
centuries the city of London has been a key centre of world
trade, but four years ago today it was humbled. As the financial crisis raged,
the British government poured half a trillion pounds into the nations failing
banks. Four years on - has Britain retained its place at the centre of
world finance?
EUROPE: SPAIN
Spanish aid request from euro zone seen in
November – Reuters
Spain could ask for financial aid from
the euro zone next month and if it does the request would likely be dealt with
alongside a revised loan program for Greece and a bailout for Cyprus in one big package, euro zone
officials said.
EUROPE: GREECE
A Grexit delayed if not denied – alphaville
/ FT
Official
sector, including IMF, have become more understanding – but Greece will still
run out of money and be denied bailout payments in the future according to
Citi.
Euro zone mulls new ways to cut Greek debt
mountain – Reuters
Euro zone
officials are considering new ways to reduce Greece's huge debts because delays
to reforms by Athens and continued recession have put the target of a debt to GDP ratio of 120 percent in 2020 out of
reach, euro zone officials said.
USA
Hard to be Easing – Nouriel
Roubini / Project Syndicate
The United
States Federal Reserve’s decision to undertake a third round of quantitative easing,
or QE3, has raised three important questions. Will QE3 jump-start America’s anemic economic growth? Will it
lead to a persistent increase in risky assets, especially in US and other
global equity markets? Finally, will its effects on GDP growth and equity markets be
similar or different?
Seven Varieties of Deflation – John
Mauldin / The Big Picture
One of the
questions I (and other analysts) get asked most frequently is whether I think
there is deflation or inflation in store for the US. My quick answer is “Yes.” A brief
answer is that we are in a deflationary period and have been for over 30 years,
but like all cycles it will come to an end. A great deal of the “when” depends
on how the US deals with its deficit following
the election.
Slides and
text from GS and BoAML.
Trickle-down central banking – Free
exchange / The Economist
Incidentally,
suppose that Mr Bernanke and his colleagues are successful at boosting home
values. In that case, the Fed’s stated policy seems uncannily similar to the
one that got us into this mess.
Chairman
Ben S. Bernanke at the "Challenges of the Global Financial System: Risks
and Governance under Evolving Globalization," A High-Level Seminar
sponsored by Bank of Japan-International Monetary Fund, Tokyo, Japan
Comparing
Obama and Romney
CHINA
Stratfor’s
short video comment
Courts With Chinese Characteristics – Foreign
Affairs
China's legal system is more formalized
and better functioning than many realize. Still, given the Chinese Communist
Party's lock on judicial power, the country still has work to do.