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EUROPE
How to
break Europe’s economic taboos without shattering its union – FT
Reza
Moghadam: Skip the stages of grief and accept a comprehensive solution now,
writes Reza Moghadam
The
eurozone’s low inflation problem – FT
Lorenzo
Bini Smaghi: It is now widely recognized that the eurozone suffers from a lack
of aggregate demand.
Europanic
2.0 – Krugman / NYT
Not that
long ago the austerians who had dictated macro policy in the euro area were strutting
around, proclaiming victory on the basis of a modest uptick in growth. Then
inflation plunged and the eurozone economy began to sputter — and perhaps more
important, everyone looked at the fundamentals again and realized that the
situation remains extremely dire.
Experts
react: EU progress reports 2014 – Europp
/ LSE
On 8
October, the European Commission released its annual reports on the progress achieved
by EU candidate and potential candidate countries. Experts on the seven
countries for which reports were issued give their responses below to the key
points raised for each state.
Record poll surge gives Ukip 25% – Daily
Mail
David
Cameron remains the most trusted political leader in the poll, but Nigel Farage
is on track to win 128 seats at the General Election. The Tories could lose
more than 100 seats allowing in Ed Miliband. Polls suggest the public want
Cameron and Farage to run the country
Progress
through crisis? – ECB
Proceedings
of the conference for the 20th anniversary of the establishment of
the European Monetary Institute
GERMANY
Germany
needs to fix its economic model – FT
Berlin has
the potential to contribute more to reviving global growth
Germany’s
response to a “clear weakening” of the economy will be a shift in public
spending toward investments and away from government consumption.
No. But
does it matter? By contrast, a recession would lead to at least a passive
loosening of fiscal policy
FRANCE
France
Squares Off With Brussels Budget Hawks — the Fight So Far – WSJ
PM Valls
urges Europe to respect France, and its budget – Reuters
French
Prime Minister Manuel Valls said on Saturday that it is up to France to decide
on its budget and that Paris should be treated with respect by its European
partners.
Ratings
agency S&P cuts France's outlook to negative from stable – CNBC
French
jihadists: Self-service – The
Economist
France worries about its would-be
jihadists, especially those who return
ITALY
Bungle
Bungle: Italy's Failed Economic Turnaround – Spiegel
Ever since
Matteo Renzi became Italy's new prime minister, officials in Berlin and
Brussels have had newfound belief that Italy's deep-seated economic problems
are being tackled. But that won't happen until the country stops deceiving
itself.
Italy
and reform: Renzi revisited – The
Economist
The Italian
prime minister stakes his credibility on the passage of big reforms—but faces
plenty of doubters
Fraught
Greek bailout exit to test euro zone resilience – Reuters
Greece is
not yet giving European leaders sleepless nights again, but as the euro zone's
problem child approaches the end of its second international bailout, political
uncertainty in Athens is set to test the currency area's resilience.
Finnish
Prime Minister Alexander Stubb said lawmakers must abandon their political
differences and draft a set of measures to help cut debt after the Nordic
country was stripped of its AAA rating.
The rating
agency Standard & Poor’s delivered the latest blow to the already ailing
Finnish economy yesterday, when it stripped Finland of its precious AAA rating. Finnish
bonds should feel more pressure on the back of the move, but the losses are
likely to end up being contained for now. Because of the weak momentum in the
Finnish economy, we remain negative on Finnish bonds.
EUROPEAN CENTRAL BANK
Dam
breaks in Europe as deflation fears wash over ECB rhetoric – The
Telegraph
Ambrose
Evans-Pritchard: 'We are reaching the end game in Europe. If they don’t launch
real QE soon, the consequences are too awful to contemplate,' warns RBS
Draghi
Says Growing ECB Balance Sheet Is Last Stimulus Tool Left – BB
Draghi said
expanding the ECB’s balance sheet is the last monetary tool left to revive
inflation although there is no target for how much it might be increased.
It’s
Draghi versus Weidmann on ECB QE – FT
Gavyn
Davies: Any shift to sovereign bond purchases would run into fundamental
objections from the Bundesbank, requiring (at the very least) safeguards to
ensure that there is no monetary financing of budget deficits, especially in
countries with unsustainable public debt positions. That would certainly
complicate any programme of sovereign bond purchases very considerably.
UNITED STATES
Henry
Kissinger's new book, World Order, tackles the sorely-needed discussion on how
the world is moving towards anti-globalisation and away from US dominance. The
outcome could be a US
dollar?utm_medium=tf4-feed&utm_source=extract&utm_reader=feedly
FEDERAL RESERVE
Fed’s
Tarullo: global downside risks are policy factor – Reuters
Fed Can’t
Keep Falling Short of Inflation Goal, Says Evans – WSJ
Fed Aim Off
Target as Inflation Descends Near Danger Zone – BB
Fed
Officials Ready to Slow Tightening If World Growth Disappoints – BB
ASIA
China
Central Bank Official: No Major Stimulus Needed in ‘Foreseeable Future’ – WSJ
http://blogs.wsj.com/economics/2014/10/11/china-central-bank-official-no-major-stimulus-needed-in-foreseeable-future/?mod=WSJBlog
MARKETS
Top fund
manager’s secret to success – MarketWatch
Thomas
Dorsey is not a household name but is widely tracked by Wall Street
The Real
Great Rotation: Bond Funds Have Biggest Inflow On Record – ZH
Currencies:
Buck to the future –
The
Economist
ECONOMICS
IMF
Panel Sees Growing Risks in Weaker-Than Expected Recover – BB
World
economies warn of global risks, call for bold action – Reuters
Grand
Central: Special IMF/World Bank Edition – WSJ
IMF says
countries must reform to succeed – FT
Debt:
Global Economy’s Damnation or Salvation? – WSJ
Helicopters,
redemption, and the target – Worthwhile
Emerging
Market Volatility: Lessons from The Taper Tantrum – IMF
Starting in
May 2013, when the Federal Reserve publicly discussed its plans for tapering
unconventional monetary policies, these emerging markets have experienced
financial turbulence at the same that their domestic economic activity has
slowed. This paper examines their experiences and policy responses and draws
broad policy lessons.
What the
rest of the world can learn from Aussie banks – FT
The more a
bank focuses on taking in deposits and making loans to households and
businesses, the cheaper it is to run and the less money its employees make.
Why
Weren’t Alarm Bells Ringing? – The
New York Review of Books
Paul
Krugman reviews Martin Wolf’s book The Shifts and the Shocks: What We’ve Learned—and
Have Still to Learn—from the Financial Crisis7
How Much
is A Lot? Historical Evidence on the Size of Fiscal Adjustments – IMF
The
sizeable fiscal consolidation required to stabilize the debt-to-GDP ratios in
several countries in the aftermath of the global crisis raises a crucial
question on its feasibility. To answer this question, we rely on historical
evidence from a sample of 91 adjustment episodes of countries during 1945–2012
that needed and wanted to adjust in order to stabilize debt to GDP. We find
that, in at least half the cases, countries improved their cyclically adjusted
primary balances by close to 5 percent of GDP. We also observe that, while
countries typically make substantial efforts to stabilize debt, once this
objective is achieved, they tend to ease their primary balances and do not
necessarily get back to their initial lower debt-to-GDP ratio. We find that
consolidations tended to be larger when the initial deficit was high and
adjustment efforts were sustained over time. Fiscal adjustments also tended to
be larger when accompanied by an easing of monetary conditions and, to a lesser
extent, by an improvement in credit conditions.
More
asymmetries: Is Keynesian economics left wing? – Mainly
Macro
Keynesian
theory is not left wing, because it is not about market failure - it is just
about how the macroeconomy works. On the other hand anti-Keynesian views are
often politically motivated, because the pivotal role the state plays in
managing the macroeconomy does not fit the ideology.
Government
debt and monetary policy – FT
A new paper
by several Harvard economists, including former Treasury Secretary Larry
Summers, argues that a little more than a third of the impact of the Fed’s
asset purchase programmes was “offset” by the Treasury’s decision to lengthen
the maturity of its outstanding bonds:
Bond
markets help lower inflation – voxeu.org
Governments
benefit from inflation since the real value of public debt falls but inflation
is a tax on money holders. Bond holders are aware of this fact and act
accordingly. This column explores empirically the role of bond markets in
keeping inflation low. The existence of long, nominal, local-currency bonds
lowers inflation by three to four percentage points. The results hold for
inflation-targeting countries, and other monetary regimes do not have the same
effects.
OFF-TOPIC
How To
Be Efficient: Dan Ariely’s 6 New Secrets To Managing Your Time – Bakadesuyo
Inside
the Koch Brothers' Toxic Empire – Rolling
Stone
Practice
Does Not Make Perfect
– Slate
We are not
all created equal where our genes and abilities are concerned.
Freedom
vs. Stability Are Dictators Worse than Anarchy? – Spiegel
Although
there is always reason to celebrate the toppling of an autocrat, the outcome of
the Iraq war and the rise of Islamic State have
demonstrated in horrific terms that the alternative can be even worse.
The
Greatest Space Hack Ever – Popular
Science
How duct
tape and tube socks saved three astronauts
FINNISH
Saksa rohmuaa muilta kasvua yhä ahnaammin – Jan
Hurri / TalSa
Saksa ei ole senkään vertaa talousveturi kuin se on joskus
ollut. Se on kasvurohmu, jonka vaihtotaseen hurja ylijäämä pakottaa muita maita
yhä raskaampiin alijäämiin. Euro ja EKP tukevat tätä rohmupolitiikkaa.
Maailmantaloudelle tämä tietää tasapainohäiriöitä.
Kilpailukyky – väärät tuotteet vai väärä hinta? – Henri
Myllyniemi / US
Suomen luottoluokitus – ah ma nauran, kun kuvani kauniin
peilissäin nään – Tyhmyri
Onko valuutalla merkitystä teknologiatuotteiden
tapauksessa – mutta entäs Kiina – Tyhmyri
Kansalta pyöveliarvio Stubbin hallitukselle - "kylmää
vettä niskaan" – IL
Näkökulma: Pääministeri totuuden edessä – IL
Kokoomuslaiset vielä uskovat, demarit ovat jo toivonsa heittäneet