The world, economics, markets, off-topic and Finnish-language stuff for your weekend.
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EUROPE
Book
Review: Europe on the Brink
– Europp
/ LSE
Europe on the Brink brings together a
selection of seven important voices in a discussion of the biggest economic
issues currently facing Europe. Adrián Cosentino writes that with essays from figures such as Nobel
Laureate Joseph Stiglitz, the book will be of interest in particular to
students of European politics and economics.
Tough
tone of Trichet letter to spark new controversy – Irish
Times
The letter
is understood to threaten the removal of emergency funding
French
public finances: Budget, fudge it – The
Economist
France
wriggles free from the hard taskmasters of Brussels
Europe's
Deadly Fiscal Paralysis – View
/ BB
Squabbling
over rules that made no sense to begin with is no substitute for real reform.
Russia
and the West: Hard talk – The
Economist
What lies
behind Vladimir Putin’s latest anti-American rant
Deutsche
Bank: A weary lender
– The
Economist
Germany’s
flagship bank is in trouble. Some is of its own making
European
banks: Stress relief
– The
Economist
Europe’s
banks are in decent shape—but that is not enough to repair its economy
How Bank
Credit Is Holding Back Europe’s Recovery – WSJ
Banks
breathe sigh of relief over UK leverage ratio – FT
The BoE’s
Financial Policy Committee said it wanted big UK banks to hold capital equal to
4.05 per cent of their assets from 2019 onwards, up from 3 per cent now. That
could be increased in boom times by an extra buffer of another 0.9 per cent to
cool excessive lending. Some bankers had worried that the ratio could be set
well above 5 per cent,
The UK's Bank Stress Tests Are Just As
Flawed As The EU's
– Forbes
UK’s
adverse scenario is higher inflation and lower asset prices, but the economy is
most vulnerable to lower inflation.
EUROPEAN CENTRAL BANK
Draghi
can only dream of moving like BOJ’s Kuroda – Reuters
UNITED STATES
The
mid-term elections: What they’re all about – The
Economist
On November
4th America is set to kick the president and hand control of the Senate to the
Republicans
FEDERAL RESERVE
Quantitative
pleasing – FT
QE, who
needs ya? No, don’t answer that – FT
Another
Kocherlakota Dissent
– Tim
Duy’s Fed Watch
ocherlakota's
dissent raises the possibility that labor data will trump inflation data in
policy considerations. It also suggests that given the pace of labor market
improvement, they are not writing off the possibility of a March rate hike
(although that is not my baseline).
US:
Changes to Fed’s tool box point to tighter policy – Nordea
New
important changes to the Fed’s tools for adjusting rates indicate that the
central bank is stepping closer to the first rate hike.
ASIA
China's
global financial diplomacy moves into higher but uncertain gear – Nikkei
George
Magnus: Whatever the course of capital liberalization, there is little question
that China will use capital in the pursuit of political initiatives it sees as
advantageous
Bank of
Japan's Money Can't Match China's Engine – View
/ BB
William
Pesek: As Shinzo Abe looks for new growth engines to reinvigorate Japan, he's ignoring the most obvious
one.
[Quicktake]
Abenomics - Japan's Economic Shock Therapy – BB
Why
Hasn’t Inflation Picked Up in Japan? – WSJ
Japan
risks Asian currency war with fresh QE blitz – The
Telegraph
Ambrose-Evans
Pritchard: The Bank of Japan is mopping up the country's vast debt and driving
down the yen in a radical experiment in modern global finance
Thoughts
on Japan – GMT
It’s not
clear how much of the move in asset prices were driven by the BoJ, and how much
by the GPIF announcement. This question is key – because the BoJ can print
forever, but the GPIF can only rebalance like this one more time.
MARKETS
More
Thoughts on “Fad Investing” – PragCap
Facts
and myths about bank leverage ratios – Medium
Can you
beat a dart-throwing monkey? – TradingFloor
We show
that random portfolios beat S&P 500 most of the time with the average
random portfolio generating 1%-point in excess annual return over S&P 500,
raising a lot of questions. Is the outperformance driven only by the size
factor and should long-only equity managers shift their benchmarks from their
current ones to random indices?
Fear of
illiquidity – Moneyness
Say that
you are petrified that a day will come when markets will be too illiquid for
you to convert your wealth into the things you need. There are two ways for you
to buy complete peace of mind.
Morgan
Stanley's European Equity Strategy Data Gallery – ZH
ECONOMICS
John
Maynard Keynes Is the Economist the World Needs Now – BusinessWeek
The
takeaway from six years of economic troubles? Keynes was right. – Reuters
Anatole
Kaletsky: In the era of high inflation when monetarism was introduced, the idea
that interest rates could always be cut by enough to revive private economic
activity was reasonable enough.
In
praise of macroeconomists (or at least one of them) – mainly
macro
Apologizing
to Japan – Krugman
/ NYT
The
untold story of the Eurozone crisis – mainly
macro
So the
reason why Germany seems to have largely escaped the second Eurozone recession
of 2012/3 is that it pursued (perhaps unintentionally) a beggar my neighbour
policy within the Eurozone. Low nominal wage growth in Germany led to lower
production costs and prices, which allowed German goods to displace goods
produced in other Eurozone countries both in the Eurozone and in third markets.
Fiscal
Devaluation in a Monetary Union – IMF
We find
that a FD in ‘Southern European countries’ has a strong positive effect on
output, but mild effects on the trade balance and the real exchange rate. Since
the benefits of a FD are small relative to the divergence in competitiveness,
it is best addressed through structural reforms.
Romer
and Romer vs. Reinhart and Rogoff – WSJ
Declines in
economic output, as measured by gross domestic product and industrial
production, following crises were on average moderate and often short-lived.
Blaming
Easy Money for Alien Invasions – View
/ BB
Some people
will always despise QE, no matter how benign it turns out to be in practice.
Secular
stagnation: the scary theory that's taking economics by storm – vox
Will it
matter when the Fed has “traction?” – The Money Illusion
Central
Banks that make the same mistake are ‘rewarded’ with similar outcomes – The
Faint of Heart
Quantitative
pleasing – FT
Global
imbalances: Whither now? – voxeu.org
Global
current-account imbalances narrowed substantially over the past eight years. As
a result, the systemic risks associated with these imbalances have decreased.
This column argues that despite this narrowing, the net creditor and debtor
positions diverged further. Some large debtor economies remain exposed to
changes in market confidence. Containing remaining imbalances requires a
rebalance in global demand.
OFF-TOPIC
Interview
with an Islamic State Recruiter: 'Democracy Is For Infidels' – Spiegel
How does
Islamic State think? How do its followers see the world? SPIEGEL met up with an
Islamic State recruiter in Turkey to hear about the extremist group's vision
for the future.
The
Police Are Still Out of Control – Politico
I should
know. By FRANK SERPICO
William
Gibson Writes the Future – GQ
He coined
the term cyberspace before we even knew cyberspace existed. He imagined reality
TV years before it was everywhere. He's made the leap from cult novelist to
mega-selling oracle by writing intensely enjoyable techno-thrillers about
viral-ad agencies and shadowy clothing designers and Cuban-Chinese data
traffickers. And while William Gibson insists that he's the last guy to know
what's coming next, predictions he made decades ago keep coming true. Which is
a little alarming, actually. Because his new novel, The Peripheral, is his most
dire yet
Crossing
Off the Red Cross –
View
/ BB
This is
why flying on a plane makes you feel terrible – vox
22 maps
and charts that will surprise you – vox
38 maps
that explain Europe
– vox
CIA
Hiring Chief Demystifies Agency's Recruitment – Forbes
And Reveals
Top Interview Questions
Lunch
with the FT: Sir John Sawers – FT
In his
first on-the-record interview the UK’s spy chief talks about risk, the Snowden
revelations and reforming MI6
The
Holder of Secrets –
New
Yorker
Laura
Poitras’s closeup view of Edward Snowden.
Remembering
the fall of the Berlin Wall – FT
When the
Wall fell 25 years ago, the bankruptcy of East German communism had long been
clear. Yet there was nothing inevitable about the events of November 1989
My
Captivity – NYT
Theo
Padnos, American Journalist, on Being Kidnapped, Tortured and Released in Syria
Stephen
King: The Rolling Stone Interview – Rolling
Stone
The horror
master looks back on his four-decade career
FT
interview with Google co-founder and CEO Larry Page – FT
Even the
search engine’s original mission is not big enough for what he now has in mind
Lunch
with the FT: Richard Branson – FT
This
interview was conducted before Virgin Galactic announced on Friday that a
serious ‘in-flight anomaly’ had resulted in the loss of SpaceShipTwo in a test
flight in Mojave.
Artificial
intelligence: machine v man – FT
Computers
will soon become more intelligent than us. Some of the best brains in Silicon
Valley are now trying to work out what happens next
A human
writes . . . - FT
For all the
Silicon Valley gains, our world is now being shaped by people who think man i
13
classic scenes that explain how horror movies work – vox
Rational
regret – interfluidity
Most of us
do not perceive of our life histories as mere throws of the dice, even if we
acknowledge a very strong role for chance. Most of us, if we have tried some
unlikely career and failed, will either blame ourselves or blame others. We
will look to decisions we have taken and wonder “if only”.
Journalists
need a point of view if they want to stay relevant – The
Conversation
What has
happened to journalism? – medium
Redeeming
an institution that is essential to democracy
This
photo of Kim Jong Un looks like a still from a Wes Anderson movie – vox
North
Korea's gulags: a horror "without any parallel in the contemporary
world" – vox
FINNISH
Euromaat yhä tiukemmin velkaloukussa – Jan
Hurri / TalSa
Euromaat ovat omalaatuisessa velkaloukussa, johon ne
juuttuvat sitä tiukemmin kiinni mitä pontevammin pyrkivät irti. Julkisen
talouden velkataakka kasvaa, vaikka sen piti kutistua. Yksi selitys löytyy EU:n
toispuolisista taloussäännöistä ja niiden ristiriitaisista vaikutuksista.
20 vuotta Eussa: Entä jos olisimme sanoneet EU:lle EI
– HS
Suomi olisi aluksi ollut Norjan, sitten Viron ja nyt Ruotsin
läheinen kumppani.
Lamalääkkeitä: lasketaan työnantajamaksuja? – Akateeminen talousblogi
Aki Kangasharju: Kimalaisen lento katkesi – Nordea
Jos yksityisen sektorin työpaikkojen määrää ei saada pian
kasvuun, kimalainen tippuu korkealta ja kovaa.
EU ja Venäjän kaupan pakotteiden aika – Brysselin
kone / YLE
Osastopäällikkö Markku Keinänen ulkoasiainministeriöstä
taloudellisten ulkosuhteiden osastolta puhuu EU:n ja Venäjän välisistä
pakotteista, eli esimerkiksi siitä mikä on pakotetilanne nyt milloin pakotteet
ehkä puretaan ja millä metodeilla. Lisäksi ohjelmassa keskustellaan myös muusta
EU:n kauppapolitiikasta.
Talouskriisit tuottavat "keynesiläisiä" – Henri
Myllyniemi / US