Here
are the ”best” from my posts of the ending week.
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EUROPE
Euro-Zone Fiscal Colonialism – Philippe Legrain / NYT
The primary cause of
the crisis was the reckless lending of German and French banks
Europe’s Next Moral Hazard – Project Syndicate
Hans-Werner Sinn: The
limit beyond which eurozone governments' creditors become anxious has been
raised significantly by the bailout architecture put in place over the last two
years. This will bring a few years of calm as debt levels climb steadily to
that limit, before the architecture collapses, injuring ordinary citizens the
most.
EUROPEAN
CENTRAL BANK
ECB
moving closer to unconventional policy – Sober Look
The tricky part is
that the more effective the monetary transmission, the riskier are the assets.
Constructing
negativity and the ECB – FT
How a move to negative is constructed will, of course, have much to do with
what it is intended to achieve — a weaker euro at last check — but we also
can’t help but think it would be cool to make sure it won’t cause too much harm
either.
A New ECB Outlook? Part I – PIIE
A New ECB Outlook: Part II – PIIE
ECB FX intervention, de facto
or otherwise – FT
Direct FX intervention
been done it before by the ECB and if, as Rajan suggests, the externalities of QE
and FX intervention are possibly similar while the difficulties of
implementation are not, than you wonder why direct intervention appears to be
so far down Draghi’s list of actions? Presumably the external political cost of
intervention is still much higher than for QE.
Here’s a Checklist for Mario
Draghi – WSJ
Shrinking times – Bruegel
Over the last 5 years,
the Eurozone financial system has been flooded with liquidity, due to the ECB’s
very special response to the very special bank-sovereign euro crisis.
Eight
EU states in deflation as calls grow for QE in Sweden – The Telegraph
Sweden’s Riksbank admitted in
its latest monetary report that something unexpected had gone wrong
Euro area deflation monitor – Danske Bank
CRISIS
COUNTRIES
Russia to face recession on geopolitical woes – Danske Bank
More Greek Statistics? Troika Confirms Primary
Surplus – WSJ
Eurostat reported
Wednesday that Greece had a government deficit in 2013 of €23 billion, and
spent €7.2 billion on interest payments. That makes the primary balance—under
the definition widely used by economists and Eurostat itself—a deficit of €16
billion, or 8.7% of Greece’s gross domestic product.
Periphery business cycle monitor – Danske Bank
We expect most
euro-area periphery countries to continue to show positive GDP growth. Survey
data are at relatively high levels and the improvement is also seen in hard
data, where industrial production is slowly increasing while retail sales have
stabilized
UNITED STATES
Has US household deleveraging ended? – voxeu.org
Household deleveraging
in the US has impeded consumption and market activity in recent years, holding
back the recovery. Despite substantial progress in balance sheet repair, a key
question is whether deleveraging has ended or whether further adjustment is
needed. This column presents time-varying equilibrium estimates of the
household debt-to-income ratio determined by economic fundamentals. Taking into
account the latest available data, the estimates suggest that the household
deleveraging process may have ended at the end of 2013.
Markets beginning price in US inflation
stabilizing – Sober Look
The markets are
starting to take notice. The latest TIPS auction showed a sudden increase in investor
demand. The five-year breakeven rate (a rough measure of implied inflation
expectations) jumped as a result.
Don’t Look Now, but Rising
Wages Could Spell Trouble for the Fed – WSJ
ASIA
China’s Bloated Financial System: A Quick Guide – The Big Picture
OTHER
What
did QE ever do for us? – FT
A new Bank of England paper from external MPC member Martin Weale
released today tries to put a figure to how much QE boosted national output and
inflation in the UK and the US.
IMF:
Fed Bond-Buying Delivered ‘Significant’ Boost to U.S. Economy – WSJ
FINNISH
Suomalainen ei usko ennenkuin näkee - EU ja
euro nähty – Toimi
Kankaaniemi / US
Suomi on
ollut yli 19 vuotta Euroopan unionin jäsen ja yli 12 vuotta euroalueessa (euron
käyttäjänä). Missä tahansa asiassa tuollaiset ajat ovat riittäviä osoittamaan,
minkälaiset kokemukset ovat. Sananlasku sanoo, että "suomalainen ei usko
ennenkuin näkee". EU ja euro on nähty.
Suomen osallistumiselle euroalueen
liittovaltiokehitykseen on vaihtoehtoja – Talous ja
Yhteiskunta
Peter Nyberg on ollut selvittämässä niin Suomen
1990-luvun kriisiä kuin eurokriisiäkin. Hän pitää rahaliiton suurimpana vikana
sitä, ettei sopimuksia ja määräyksiä noudateta. Korkoerojen annettiin hävitä ja
luotonannon laajentua, kunnes kriisi puhkesi. Kriisimaita on tuettu, jotta
yksityiset sijoittajat pääsisivät pois. Pankkien pääomavaje muodostaa edelleen
vaaran. EKP on helpottanut kriisiä mutta ylittänyt valtuutensa.
Pankkivalvojalta ja -unionilta ei kannata odottaa liikaa, koska ongelmia ei ole
ennenkään havaittu ajoissa. Suomen kannattaisi puolustaa
itsemääräämisoikeuttaan ja irtaantua yhteisvastuusta ja
liittovaltiokehityksestä, tiukan paikan tullen koko rahaliitosta.
Muualla vyö alkaa löystyä mutta Suomi kiristää lisää – Jan
Hurri / TalSa
Suuret euromaat Ranska, Italia ja Espanja
aikovat keventää julkisen talouden vyönkiristyksiä. Saksa aloittaa uusia
elvytystoimia alijäämän kasvusta huolimatta. Suomi sen sijaan jatkaa
vyönkiristyksiä. Muut painavat kaasua, Suomi jarrua – muualla talous kasvaa,
Suomessa ei.