In this week's edition the usual Europe with focus on the PIIGS, Vatican's latest scandal, Marc Rich is dead, some interesting off-topic articles and couple of Finnish-language links.
Previously on MoreLiver’s:
EUROPE
Croatia joins the EU, trouble in Portugal and France’s ‘restive left’.
Speech
Benoît Cœuré: Monetary Policy and the Risk of a Lost Decade – ECB
Eurozone faces 'lost decade' unless action
taken on banks – The
Telegraph
The eurozone faces a
Japanese style "lost decade" unless action is taken to address the
deep-seated problems of its banks, ratesetter Benoît Coeuré has warned.
The impact of
sovereign-debt exposure on bank lending: Evidence from the European debt crisis – voxeu.org
The European sovereign-debt crisis has raised many questions regarding
the link between sovereigns and banks. This column goes to the heart of one and
shows that tensions in Eurozone government-bond markets were transmitted
internationally through the bank lending channel. Lending by European banks
with sizeable exposures to sovereign debt from the troubled Eurozone countries
became impaired after the start of the crisis, resulting in a reallocation away
from foreign (especially US) markets.
PIIGS
Potential Mistakes (Wonkish) – Krugman
/ NYT
The European
Commission has, rather belatedly, woken up to the likelihood that it is
understating potential output in debtor countries, overstating their “natural”
rate of unemployment, and therefore underestimating the degree of fiscal
austerity being imposed.
The Portuguese
government seems close to collapse – The
Economist
No one is likely to
emerge a winner from the political disarray triggered in Portugal by the resignations of the finance and foreign
ministers.
How to Leave the Euro – Opinion
/ WSJ
The consequences of
years of irresponsible fiscal policy, bad microeconomic policies and inadequate
supervision of commercial banks cannot be put right simply by reintroducing a
national currency. But it's important to understand that abandoning the euro wouldn't
unleash hell upon Greece, either. An orderly, market-based solution is available if and when the
decision is made to pull the trigger.
Dramatic political
change is sweeping Spain, or so polling suggests. For three decades
Mariano Rajoy’s conservative Popular Party (PP) and the Socialists have taken
turns to run the country.
Spain's banks do not
at present need further European aid, according to a document prepared by the
European Commission and the European Central Bank and seen by Reuters on
Friday.
Spain's bill to bail
out its banks may yet rise, some bankers and analysts fear, as a worsening
economy hampers the government's early attempts to sell off nationalised
lenders and threatens the "bad bank" housing their rotten property
deals.
Last week, the German
newspaper ‘Süddeutsche Zeitung’ published an article about the ‘conning’ of Ireland – over several decades – by its political
masters. We talk to the writer, reprint the article and add some footnotes of
our own
Money will find a way – The
Economist
The Eurobond’s 50th birthday has lessons for governments about how not
to regulate finance
VATICAN
SCANDAL ON REUTERS
Senior Vatican cleric
arrested in money smuggling case (28-Jun)
Top Vatican bank
managers resign after Monsignor's arrest (1-Jul)
Prosecutors consider
trial for ex-Vatican bank managers (2-Jul)
Vatican bank told of "clear failings" at
meeting (4-Jul)
UNITED STATES
First signs of
rate-driven weakness in the housing sector – Sober
Look
Today Citi and some other banks quoted the 30-year conforming mortgage
rate at 4.625%. Others are quoting the rate even higher (see national averages
below).
The Derp and Fall of Inflation Fearmongers – The
Atlantic
Nothing can kill
zombie ideas. Not facts. Not figures. And certainly not failed predictions…Derp
doesn't fall under the Fed's dual mandate.
ASIA
Leaders in Beijing know that swelling local government debt is
one of the greatest threats to China’s economy. What they don’t know, apparently,
is just how big the threat is.
Mostly what’s cheap is
commodity-related stocks set to suffer from the slowdown of demand in China. Domestically-oriented companies are down, but
aren’t that cheap.
OTHER
The Basel Committee on
Banking Supervision, a body of central bankers, says it has found significant
differences in how some of the world’s large banks continue to assess risks on
their balance sheets.
Are we having fun yet? – London
Review of Books
John Lanchester on the
banks’ barely believable behaviour
Credit and growth after financial crises – BIS
(pdf)
The lack of
association between deleveraging and the speed of recovery does not seem to
arise due to limited data. In fact, our data shows that increasing competitiveness,
via exchange rate depreciations, is statistically and economically significantly
associated with faster recoveries. Our results contradict the current consensus
that private sector deleveraging is necessarily harmful for growth.
Bank bondholders: Fail
safer
– The
Economist
Authorities on both sides of the Atlantic make progress
towards safer banking
Central banks adopt a
three-speed interest rate policy, but will it work? – The
Telegraph
These contrary stances reflect very different positions in the economic
cycle. The US already seems to be
in self-sustaining recovery mode, but Europe remains mired in
recession. As ever, the UK is somewhere in
between, still unsure whether it dances to the US or the European
tune.
Don’t tell Wall Street
Journal editorial writers (or Sun readers) but more and more economists now recognize that moderate inflation is
precisely what the world economy needs.
Lunch with the FT: Meredith Whitney – FT
The Wall Street
analyst who foresaw the US banking crisis talks to Lucy Kellaway about
standing out in a ‘dull’ industry
Research Review | 7.5.13 | Portfolio Management – The
Capital Spectator
Book Bits | 7.6.13 – The
Capital Spectator
Newsletter Issue 7 – The
Short Side of the Long
Markit: Plumbers in
suits
– The
Economist
A private company controlled by banks connects much of the financial
system
OFF-TOPIC
Top secret documents detail the mass scope of efforts by the United States to spy on Germany and Europe. Each month, the NSA
monitors a half a billion communications and EU buildings are bugged. The scandal
poses a threat to trans-Atlantic relations.
The Rock ’n’ Roll Casualty Who Became a War
Hero – NYT
From Nirvana and Sound Garden to U.S. Army Ranger and Special Forces.
A Test to Measure How Rational You Really Are – io9
Standard IQ tests are
problematic on many levels — not least, because they do very little to tell us
about the quality of our thinking.
Buried Secrets – The
New Yorker
How an Israeli
billionaire wrested control of one of Africa’s
biggest prizes.
How a high-stakes
poker game that started at Tobey Maguire’s house became part of a $100 million
gambling and money-laundering operation orchestrated by the Russian mob.
MARC RICH
My encounters with Marc Rich – Fortune
A Fortune senior
editor-at-large recounts how he landed an exclusive interview with the elusive
late financier.
Marc Rich, Financier and Famous Fugitive, Dies
at 78 – NYT
Obituary: Marc Rich – The
Economist
The double life of Marc Rich (2001) – NBC
From ski villas and
high finance to the uneasy life of a fugitive
Marc Rich – Wikipedia
FINNISH
Pohjois-Amerikan
Yhdysvallat on tulonsiirtounioni – tyhmyri
Pelkkä
vähäinen hintakilpailukyky ei riitä yhteisvaluutan oloissa – klusteriedut,
teollisuuden katoaminen ja talousmaantiede – tyhmyri
Tutkimus:
Velkakriisistä on vaikea toipua, jos kuuluu valuuttaliittoon – TE
Veropetossyytteen
tutkintaa koskeva merkittävä linjanmuutos – Jyrki
Virolainen