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EUROPE
Flash
Eurobarometer October 2014 – Europa
Summary – Europa
Why
Europe is doomed, in 3 paragraphs – WaPo
The euro
zone: The world’s biggest economic problem – The
Economist
Deflation
in the euro zone is all too close and extremely dangerous
With all of
the rules pointing toward recession, how can Europe boost recovery?
The euro
crisis: Back to reality – The
Economist
The debt of
some euro-zone economies looks unsustainable
Draghi:
Euro zone risks 'relapse into recession' without structural reforms – Reuters
Merkel
Hints That Euro-Area Nations May Have Room for Investment – BB
Soros:
Wake Up, Europe – nybooks.com
Europe is
facing a challenge from Russia to its very existence. Neither the European
leaders nor their citizens are fully aware of this challenge or know how best
to deal with it.
The
Mother of all Jobs in the EU – Wolf Street
Ironically,
the more Eurocrats try to integrate the EU through imposition of fiscal,
monetary, banking, and political straitjackets, the closer the Union comes to disintegration.
Market
uncertainty over the future of the euro has returned, but that hasn't stopped
France from flouting European Union deficit rules. Berlin is already busy
hashing out a dubious compromise.
Charlemagne:
Gummed up – The
Economist
Europe’s leaders need to rediscover the
resolve they showed during the euro crisis
When
will the SNB end FX intervention and start raising rates? – FT
According
to Goldman, the answer is sooner than the market thinks. A new note argues that
the Swiss franc is already overvalued against the euro, which should give the
Swiss National Bank cover to raise rates in response to a vibrant domestic
economy and an overheating housing market.
BANK TESTS
Euro
area: Handling the stress (test results) – Nordea
The
long-awaited ECB/EBA stress test results will finally be released on Sunday at
12:00 CET. The results are bound to include failures, but their scope and scale
should not cause another shock to markets.
EU
Banking Stress Tests 'Far-Reaching Reforms Are Needed' – Spiegel
On Sunday,
Europe will release the results of its banking stress tests. In an interview,
former PIMCO head Mohamed El-Erian speaks with SPIEGEL about what to expect and
how Europe's core countries are failing to adequately confront a flagging
economy.
ECB Set
to Fail 25 Banks in Review, Draft Document Shows – BB
Twenty-five
lenders in the European Central Bank’s euro-area bank health check are set to
fail the regulator’s Comprehensive Assessment, according to a draft communique
of the final results, seen by Bloomberg News.
Testing
Europe’s Stress Tests
– Bloomberg
View
Europe’s
banks might actually be more than $600 billion short of the capital they would
need in a severe crisis.
Crucial
ECB stress test likely to snare 25 lenders – FT
About 25
banks are expected to fail the ECB’s landmark health checks, although many of
those have already taken sufficient action this year to strengthen their
finances, said two people familiar with the process.
ECB
Stress Test a Lose-Lose Scenario: Morilla-Giner – BB
UNITED STATES
Merrill
Lynch: FOMC Preview
– Calculated
Risk
Goldman
Sachs: FOMC Preview
– Calculated
Risk
Specter
of no-inflation world looms over Fed's return to normal – Reuters
After
months of focus on slack in U.S. labor markets, the Federal Reserve faces a new
challenge: the possibility that weak inflation may be so firmly entrenched it
upends the return to normal monetary policy.
The U.S.
Housing Market in 10 Charts – WSJ
Looking
back against 2011, when prices and sales hit bottom, the market is clearly
improved. Compared with last year, the pace of sales gains have slowed, but
they’re not getting dramatically worse, either. Prices are up around 5%, slower
than the year before but enough to quiet fears of a new bubble. Sales are flat
to down.
ASIA
China’s
future growth: Even dragons tire – The
Economist
China’s
slowdown is secular, not cyclical – FT
The journey
from luxury to thrift will test Beijing’s mettle – FT
China
starts its painful shift to the new normal – FT
What the
Heck Happened To Macau? – Wolf
Street
OTHER
Financial
hurricanes – Coppola
Comment
Cross-border
leveraging flow systems of the kind I have illustrated above are the storms and
hurricanes of the financial system. We ignore them at our peril.
The
Zombie System: How Capitalism Has Gone Off the Rails – Spiegel
Six years
after the Lehman disaster, the industrialized world is suffering from Japan
Syndrome. Growth is minimal, another crash may be brewing and the gulf between
rich and poor continues to widen. Can the global economy reinvent itself?
Briefing:
The dangers of deflation – The
Economist
Politicians
and central bankers are not providing the world with the inflation it needs;
some economies face damaging deflation instead
On The
Coming Collapse Of Copper – ZH
A New
Macroeconomic Strategy – Project
Syndicate
Both
neo-Keynesians and supply-siders have tried and failed to overcome the
high-income economies’ persistently weak performance in recent years. It is
time for a new approach, one based on sustainable, investment-led growth.
Information
in Financial Markets: Who Gets It First? – SSRN
Hedge fund
trading anticipates analyst information, while mutual fund trading does not.
Specifically, hedge fund net buying predicts more analyst upgrade reports in
the next quarter, and predicts fewer downgrade reports. Secondly, I find hedge
funds and mutual funds respond differently to analyst information: in the
quarter following analyst reports hedge funds “defy” analyst recommendations,
while mutual follow the analysts. Finally, I find hedge funds perform best
among stocks with highest research coverage and institutional ownership. I
relate these findings to information acquisition theory in settings where
investors acquire information at different times.
Helicopter
money – mainly macro
Periodically
articles appear advocating, or discussing, helicopter money. Here is a simple
guide to this strange sounding concept. I go in descending order of importance,
covering the essential ground in points 1-7, and dealing with more esoteric
matters after that.
George
Friedman: Germany and China are dealing with the fact that
their customers' appetites for goods are declining -- whether because of price
competition or because of economic decline… As a result of the crisis, the
portion of China's GDP tied to exports collapsed
almost overnight, from 38 percent in 2007 to just under 24 percent now. This
collapse has forced Beijing to keep the economy on life support
through massive expansion of state-led investment into housing and
infrastructure construction. The housing boom is showing signs of having
finally run its course.
The
Moral Economy of Debt
– Project
Syndicate
Every
economic collapse brings a demand for debt forgiveness. The incomes needed to
repay loans have evaporated, and assets posted as collateral have lost value.
Creditors demand their pound of flesh; debtors clamor for relief.
Monetary
policy: Breaking the rules – The
Economist
As
unpleasant as global economic conditions look just now we can at least be
thankful that things aren't anywhere near as bad as they were in 2009, to say
nothing of 1931. Neither are those sorts of nasty scenarios a risk.
Sovereign-debt
relief and its aftermath: The 1930s, the 1990s, the future? – voxeu.org
To work
towards resolving Europe’s ongoing debt crisis this column looks to the past. From the recent
emerging market debt crisis (1980s-2000s) and the interwar episode of the
1920s-1930s we learn that debt write-downs and defaults are able to be
postponed but not prevented. Punishment for default is temporary, sometimes
followed by a renewed surge in borrowing that leads to another crisis.
OFF-TOPIC
Wrinkles
in spacetime – Wired
How
Building a Black Hole for Interstellar Led to an Amazing Scientific Discovery
The
Laborers Who Keep Dick Pics and Beheadings Out of Your Facebook Feed – Wired
Amazon
is doing the world a favor by crushing book publishers – vox.com
The
industry is right that Jeff Bezos is destroying them. But he’s not doing it by
abusing monopoly power. They’re weak because they’re not doing anything useful.
People who care about literature and ideas will be better off without them.
Why Was
the NSA Chief Playing the Market? – Foreign
Policy
Newly
released documents show the NSA chief was investing his money in commodities so
obscure that most financial pros stay away.
You
& Your Wall Street Boyfriend (24 Hours) – cafe.com
If you had
a drone with a camera, this is what you’d see your Wall Street boyfriend doing.
America
is Becoming Less Religious – Priceonomics
Zombie
Ideas That Keep on Losing – View
/ BB
Use
Google Sheets for Multilingual Chat with Speakers of Different Languages – Labnol
FINNISH
Saksa sai Ranskasta hyviä neuvoja – Jussi
Tuormaa / TalSa
Saksan asemaa Euroopan vahvana talousmaana ei ole näyttänyt
horjuttavan mikään muu kuin se itse.
Onko Suomessa finanssipolitiikka elvyttävää? – Roger
Wessman
Vuosina 2008-2009 finanssipolitiikka oli selkeästi
elvyttävää... Vuonna 2009 tämän mukaan vajaa puolet elvytyksestä oli
aktiivista...Erityisesti veronkiristysten kautta aktiivinen finanssipolitiikka
on viime vuosina ollut pääsääntöisesti lievästi talouskasvua jarruttava
(taantumaa syventävä)...Aivan toinen kysymys on siten missä määrin Suomen
talouden ongelmia voitaisiin ratkoa finanssipolitiisisella elvytyksellä.
Ongelmana on, että se tie on umpikuja jos se johtaa maata kestämättömään
velkakierteeseen.
EKP toistaa muinaisen Rooman pankkivirheitä – Jan
Hurri / TalSa
Analyysi Euroalueen keskuspankki EKP toistaa samoja virheitä,
joilla muinaisen Rooman keisari Tiberius ensin sysäsi alulle ja myöhemmin
pahensi Euroopan tiettävästi ensimmäisen "nykyaikaisen" finanssikriisin.
Tiberius tosin paikkasi virheensä, mutta EKP yhä jatkaa omiaan.
Keskustan Juha Sipilä: Edessä menojen jäädytys – TE
Sipilä karsisi kymmeniätuhansia virkamiehiä – MTV