Last week's 'Best of' here.
Previously
on MoreLiver’s:
EUROPE
IMF
tells EU to act boldly and fix the banks –
Reuters
The EU must be bold in
putting its banks on a stabler footing, starting with a tougher
health check for lenders this year, the IMF said.
Special: Bailout of Cyprus –
MoreLiver's
Daily
This House Has No Confidence In Olli Rehn, Nor Anyone Else – A Fistful of Euros
But isn’t this a bit,
you know, 2008? If there was any point to the policy of the European
powers-that-be, surely it was that this stuff was meant to be over?
Instead, we are landed with a sort of permanent state of emergency.
Why isn’t anybody sorry? Why isn’t anybody responsible?
The
time inconsistency of austerity politics – The
Current Moment
A policy framework
dedicated towards the curtailment of expansionary policies has given
us a European continent saddled with debt and a global debt crisis.
There is something more to this than the theory of the time
inconsistency of optimal policy rules.
Europe’s
Lost-and-Found Decade
– Project
Syndicate
It is unlikely that
Europe’s economy will follow the pattern
of emerging-market crises and rise, phoenix-like, from the ashes.
But, for better or worse, the fact that the most severe political and
social turbulence is yet to come at least means that Europe
will be unable to afford the dithering that
produced Japan’s lost decade.
Macro
Digest: Europe’s PMIs not bad enough – TradingFloor
Juhani Huopainen:
The European March PMI numbers were a lot
weaker than expected. But as the ECB is not allowed to do anything,
the EURUSD shrugged off the news. Apparently, a deflation threat and
recession are OK for the EU.
Wealthy
Germany – and even more wealthy Italy and Spain – Nordea
Private households
in Spain and Italy are
much more wealthy than German households. This is one of the results
of a study that the Bundesbank published yesterday
ECB
bond-buying may be moving from deterrence to stand-by
– Reuters
One of the biggest
questions facing financial markets is the will-they or won't-they
hovering over the European Central Bank's bond-buy program.
Impact
Imminent? – Bruce
Krasting
What happens if
Cyprus does a “drop out” of the EU?
That result immediately makes a lie of Mario Draghi’s words that
the Euro was Uber-Ales. This is precisely what Super Mario said
“would never happen”… Given that there is zero chance that
Italy and Spain will
do the necessary begging, the value of the promised Draghi “put”
is now also zero.
A
very clear explanation of why the euro zone keeps exploding
– Wonkblog
/ WP
Lachman: But they don’t
have their own central banks to pump up the money supply and offset
austerity and nor can they depreciate currencies. The reason you’re
seeing these crises recurring is they’re trying a recipe that can’t
work. And so the economies just keep weakening.
The
Future of the Euro: Lessons from History – Brad
DeLong
Is
The Euro a Currency or a Prison? – WSJ
Wearing the disguise of
austerity, the single currency has emerged as the gatekeeper of what
is fast becoming a debtors' prison.
EMU
= not Enough Monetary Union – Marc
to Market
It has been widely
recognized that a critical challenge Europe faces
is a monetary union without fiscal union. Yet the Cyprus
crisis demonstrates that monetary union is not
complete.
Too
big to guarantee – Buttonwood
/ The Economist
The difficulties
involved in solving the Cyprus crisis are
all the greater because the banks are much bigger than the domestic
economy. But Dhaval Joshi of BCA Research points out that this is
true for the euro zone as a whole
UNITED STATES
Fed
to signal no let-up in easing yet – Nordea
(pdf)
We expect the Fed’s
policy and forward guidance to remain unchanged after next week’s
two-day FOMC meeting, which concludes on Wednesday (summary).
The
Waning Effect of QE? – PragCap
The Fed’s exit
will be gradual and difficult – Gavyn
Davies / FT
FOMC
preview: QE programme in focus – Danske
Bank (pdf)
A
turning point – Free
exchange / The Economist
Tomorrow, the Fed will
release new economic projections, and Ben Bernanke will answer
questions on Fed policy at an afternoon press conference. I suspect
that the thrust of many of those questions will be: when are you
going to start tightening?
Is
the Fed's crystal ball rose-colored? – Wonkblog
/ WP
On Wednesday afternoon,
the leaders of the central bank will release their forecasts for
levels of economic growth, unemployment and inflation they expect to
see over the coming three years.
Macro Digest: Fed
did nothing, as expected – TradingFloor
Juhani Huopainen: The Fed
announced no changes to its monetary policy. Debate on the eventual
QE-exit is intensifying, and the Fed will soon have to come up with
its own idea.
ASIA
Japan:
Front-Runner Of Outright Monetization – ZH
Ryutaro Kono of BNP
Paribas: Japan: The challenges facing a Kuroda-led
BoJ
OTHER
Visualizing
Bob Farrell's 10 Investing Rules
– Street
Talk Live
Investing/Trading
Rules, Aphorisms & Books (Spring 2013)
– The
Big Picture
Conditional
Risk Premia in Currency Markets and Other Asset Classes
– SSRN
Is downside risk the
critical driver of investor asset valuation? In the January 2013
version of their paper entitled “Conditional Risk Premia in
Currency Markets and Other Asset Classes”, Martin Lettau, Matteo
Maggiori and Michael Weber explore the ability of a simple downside
risk capital asset pricing model (DR-CAPM) to explain and predict
asset returns
Weekend
Reading for Financial Advisers – CFA
Institute
Behavioral Finance,
Twitter, and Memory
The
end of an era? – Free
exchange / The Economist
Capital flow
restrictions will be very useful to countries interested in using a
bit of inflation to chip away at high debt levels. And that includes
just about everyone.
New
financial forecasts – Nordea
(pdf)
Here are the usual
financial forecast slides with our new financial forecasts published
this this morning in Economic Outlook (summary).
IN
FINNISH
Vieraskynä "tyhmyri":
Mistä eurokriisi johtuu – MoreLiver's
Daily