6th Sep - W/E: Best of the Week

The more interesting articles from the ending week's posts. Last week’s edition here. 

EUROPE

That sinking feeling (again) – The Economist

If Germany, France and Italy cannot find a way to refloat Europe’s economy, the euro may yet be doomed

Lessons of the Great Depression for the Eurozone – Mainly Macro

Two of the major lessons of the Great Depression are to use fiscal stimulus to get out of a liquidity trap, and that it is far too painful to insist that uncompetitive countries should bear all the costs of readjustment. The Eurozone has failed to learn either lesson.

Eurozone delusions – Mainly Macro

How confused the Eurozone macroeconomic debate has become. The confusion arises because talk of fiscal policy reminds people of Greece, the bailout and all that. That is not what we are talking about here. We are talking about what happens when the Eurozone’s monetary policy stops working.

Germany to Europe: Help Isn't on the Way – View / BB

Germany Resists Calls for ECB Aid in Euro Growth Dilemma – BB

German Finance Minister Wolfgang Schaeuble said deficit-fueled growth leads to economic decline, signaling discord with Italy and France as euro-area policy makers seek ways to avoid deflation and spur growth.

Special Report: The billion-dollar fall of the house of Espirito Santo – Reuters

When a $365 million bond investment by Venezuela's state oil company went south, it portended doom for Ricardo Espirito Santo Salgado's 150-year-old financial empire. 

Untangling the Mess of Austrian Bank Hypo – WSJ

Tracing the Losses Behind a Lending Debacle That Has Cost Taxpayers Billions of Euros So Far

Putin Seen Waging Ukraine Shadow War Until Veto Assured – BB

Russia sanctions: excerpts from draft legislation – FT

Ceasefire deal reached in Ukraine – Reuters

  EUROPEAN CENTRAL BANK

ECB Readying Broad Asset-Backed Purchases After Rate Cut – BB

5 Takeaways From the ECB’s September Meeting – WSJ

Why the ECB's ABS purchase programme will work – TradingFloor

The European Central Bank's forthcoming ABS purchasing programme may be the tool that could finally tip the scales in euro area credit formation and economic activity. By kick-starting the ABS market, the ECB is essentially helping the euro area banks to circumvent the Basel III constraints on regulatory capital, and credit transmission has a good chance of working again.

I’m going to repeat myself until this gets through. We could be here a while – FT

What Draghi appears to be trying to do is create expectations for a bigger ECB balance sheet, which he will hope weighs on the currency further. He may be successful in pushing the currency lower even though his comments during the Q&A muddled the message, in our opinion.

UNITED STATES

Something really important is starting to happen in the US economy – Quartz

It’s finally happening. American companies are spending again.

This time is not that different, long-term unemployment edition – FT

The share of long-term unemployed from this recession is about the same as in previous recessions. About 10 per cent of men who are laid off en masse are never employed again. Intriguingly, the overall health of the economy at the time of getting laid off does not seem to play much of a role, although age does.

OTHER

Currency Regimes, Capital Flows, and Crises – IMF Journal

Krugman: Ever since Greece experienced its debt crisis, fiscal discussion has been “Hellenized” – that is, there are constant warnings that other countries, including the United States, are on the verge of a similar crisis. But can countries that borrow in their own currency experience Greek-type crises? I argue, based both on evidence and on simple modeling, that the answer is no.

FINNISH

Suomella on liikaa velkaa, valtiolla ei – Jan Hurri / TalSa

Budjettiriihen jälkipuheet ovat korostaneet huolta valtion velkaantumisesta kuin hypnoottista loitsua. Puheiden mukaan valtiolla on jo liikaa velkaa ja siksi velan kasvu on pakko pysäyttää. Tämä perustuu kuitenkin harhaan.

Nolla on eurotalouden ja -korkojen uusi normaali – Jan Hurri / TalSa

Talouskasvun ja korkojen vaihtelu on omanlaistaan epävakautta, jollaisesta euroalue näyttää pääsevän eroon. Eurotalouden uusi vakaus on tosin toista maata kuin päättäjät haluaisivat: talous halvaantuu kohti absoluuttista vakautta, jossa mikään ei liiku ja nolla on uusi normaali.

Kuinka paljon on liian paljon – suurtyöttömyys myös Suomeen – Tyhmyri

Talousnäkymät - Viiman armoilla – Nordea

Suomi: Miten alas voi vajota? | Euroalueen näkymät ovat laihat | Yhdysvallat piristää maailmantaloutta

Suomen taloudessa on pisin laskukausi 150 vuoteen: Suomi on lamassa – IS

Suomi on yhden shokin päässä neljännestä miinusvuodesta – TalSa

Suomen talous on Nordean ekonomistien mukaan vain yhden shokin päässä neljännestä supistuvan talouden vuodesta samoin kuin deflaatiostakin vuonna 2015. Kuluvana vuonna talouden voi kääntää plussalle enää vain ihme.

Elina Lepomäki (kok): Euron valuvikoja ei ole edelleenkään korjattu – YLE

Päätös Natosta on tehtävä nyt – Hannu Visti

OFF-TOPIC

Fear and Self-Loathing in Las Vegas – The Daily

Retracing Hunter S. Thompson’s famous steps, 40 years later.

Life Lessons From One of the World’s Oldest Men – TIME

Charlie White, who died at 109, was able to separate the things he could control from the things that he could not.

Drug czar approaches challenge from a different angle: As a recovering alcoholic – WaPo