This
weekend’s edition has stuff on shadow banking, IMF’s change of attitude on
capital controls, TARGET2, while the trading & markets-related links are a
mixed bag.
Previously on MoreLiver’s:
7-Dec US Close Payroll monster
BANKING
Shadow Banking Regulation – FED (pdf)
Shadow Banking:
Economics and Policy – IMF (pdf)
Outlines the basic economics of the shadow banking
system, highlights (systemic) risks related to it, and suggests implications
for measurement and regulatory approaches.
Too big to fail: some empirical evidence on the
causes and consequences of public banking interventions in the United Kingdom – BOE
ECONOMICS
Five myths about the
unemployed – Opinion
/ WP
Evidence in
Macroeconomics – Krugman
/ NYT
Death Star II nowhere, sadly – alphaville
/ FT
This
petition to the White House to secure resources and funding, and begin
construction of a Death Star by 2016 has got “no brainer” written all over it…
IMF: Budget cuts hurt
growth a lot. But tax increases barely matter – Wonkblog
/ WP
Adjustment
Mechanisms in a Currency Area – SSRN
We focus on three badly affected states, Arizona, Spain and Latvia, to
examine the working of relative adjustment mechanisms within the currency
region. We concentrate on four such mechanisms, relative wage adjustment,
migration, net fiscal flows and bank flows. Only in Latvia was there
any relative wage adjustment. Intra-EU migration has increased, but is more
costly for those involved in the EU (than in the USA). Net
federal financing helped Arizona and Latvia in the
crisis, but not Spain. The
locally focused structure of banking amplified the crisis in Spain, whereas
the role of out-of-state banks eased adjustment in Arizona and Latvia. The
latter reinforces the case for an EU banking union.
CENTRAL
BANKING
What to expect when
you're expecting faster growth – Free
exchange / The Economist
My colleague questioned the wisdom of encouraging
central banks to raise inflation expectations. Having written (once or twice)
on why doing so is in fact a good idea, I thought I'd respond to a few points.
How cancelling central banks’ holdings of
government debt could be a useful thing – alphaville
/ FT
Assessing the economy-wide effects of
quantitative easing
– BOE
Asset purchase policy at the effective lower
bound for interest rates – BOE
Raiders of the QE surplus – alphaville
/ FT
As the
media described it, there was a *raid* by Her Majesty’s Treasury on the Bank of
England’s so-called “QE surpluses”.
IMF
& CAPITAL CONTROLS
Dampening the tides – Free
exchange / The Economist
An explicit tolerance for some restrictions represents
a striking shift for an organisation that once embodied the neo-liberal policy
consensus. Yet it also appears to acknowledge macroeconomic reality and
rigorous research.
The IMF and Capital
Controls – Krugman
/ NYT
Is the IMF Changing Tune on Capital Controls? – Marco
and Markets / CFR
The IMF now supports capital controls – Credit
Writedowns
MARKETS &
TRADING
Low yielding assets,
and sausages – alphaville
/ FT
Plenty of analysts and pundits have gone to the
trouble of explaining the challenge confronting savers in the current low-yield
environment… But how
many of them go to the trouble of putting on a barbecue to illustrate various
credit strategies one may respond with?
What Has (And Hasn't)
Worked So Far This Year? – ZH
Goldman Sachs has two charts
Stock Markets That Flummox Masses Do No One Any
Good – View
/ BB
They have
grown so complex, fragmented and opaque that they don’t serve their stated
purpose. Rather than a place where individual and professional investors can
put a value on shares and where companies go to raise capital, the markets
today look more like a video game. The trouble is, it’s one where only a few
understand all the rules.
(Re)Discovering Technical Analysis – Financial
Advisor Mag
Charts of the Day: Trading Volume Slumps Across
the Board – WSJ
Current Thinking on Hedge Funds: Are They Worth
It? – CFA
Institute
In search
of enlightenment, our team of CFA Digest abstractors evaluated recent research
about hedge funds and alternative strategies for hedging.
HFT
High-frequency trading behaviour and its impact
on market quality: evidence from the UK equity market – BOE
(pdf)
BoE on HFT: “A large absolute noise
contribution” – alphaville
/ FT
Risk and Reward in High
Frequency Trading – Rajiv
Sethi
BUFFETT
For Buffett, the Long Run Still Trumps the
Quick Return – NYT
The Next Warren
Buffetts? Wisdom From Klarman, Perry, Chanos & More – market
folly
Notes From Warren Buffett's Meeting With MBA
Students – Market
Folly