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Thursday, October 30, 2014

Michael Sauga , Spiegel Online : "The Zombie System: How Capitalism Has Gone Off the Rails"

Capitalism in Crisis Amid Slow Growth and Growing Inequality - SPIEGEL ONLINE

Europe: Building a Banking Union | Stratfor

Europe: Building a Banking Union | Stratfor



"The recent stress tests by the European Central Bank offered few surprises and did not cause any significant political or financial reactions in the Continent. However, these tests were only the beginning of a complex process to build a banking union in the European Union. Unlike the stress tests, the next steps in this project could create more divisions in Europe because national parliaments will be involved at a time when Euroskepticism is on the rise."


Wednesday, October 29, 2014

Γραφείο Προϋπολογισμού του Κράτους στη Βουλή: 3-μηνιαία Εκθςση, Σεπ. 2014

Paul Krugman chats with Barry Ritholtz on Bloomberg radio (audio)

Informative and also entertaining!

Masters in Business: Nobel-Prize Economist Paul Krugman (Audio) by Bloomberg View

Frances Coppola at Pieria : "European Stress Tests: not stressful enough"

How right I was looking forward to her take



European Stress Tests: not stressful enough

"In my view the ECB has done a good job with the AQR. It has standardised methodologies across the European banking system: it has forced banks to end systematic over-valuation of certain types of asset, notably commercial loans and property: and it has exposed serious weaknesses in risk pricing and management, notably in counterparty credit risk where 50% of banks need to improve their methodologies."

...

"But I am much less impressed with the stress tests. The EBA has madeexactly the same mistake that it made in previous tests: it has ignored the real risks facing the EU."

...

"The European banking system is still infested with zombies, which can pass stress tests but can't lend. Until these are killed off or significantly restructured, there can be no great improvement in lending."




Tuesday, October 28, 2014

Are the Eurozone’s fiscal rules dying? | Ashoka Mody at Bruegel.org

Are the Eurozone’s fiscal rules dying? | Ashoka Mody at Bruegel.org

The Importance of Being Europe — Money, Banking and Financial Markets

The Importance of Being Europe — Money, Banking and Financial Markets



Two of the papers mentioned:

Enrico Spolaone : What Is European Integration Really About? A Political Guide for Economists

"Europe's monetary union is part of a broader process of integration that started in the aftermath of World War II. In this "political guide for economists," we look at the creation of the euro within the bigger picture of European integration. How and why were European institutions established? What is European integration really about? We address these questions from a political-economy perspective, building on ideas and results from the economic literature on the formation of states and political unions. Specifically, we look at the motivations, assumptions, and limitations of the European strategy initiated by Jean Monnet and his collaborators of partially integrating policy functions in a few areas with the expectation that more integration will follow in other areas in a sort of chain reaction toward an "ever-closer union." The euro with its current problems is a child of that strategy and its limits.

L.Guiso, P.Sapienza, L.Zingales for Brookings : "Monnet’s Error?"

"Do partial steps toward European integration generate support for further steps or do they create a political backlash? We try to answer this question by analyzing the cross sectional and time series variation in pro-European sentiment in the EU 15 countries. The two major steps forward (the 1992 Maastricht Treaty and the 2004 enlargement) seem to have reduced the pro-Europe sentiment as does the 2010 Eurozone crisis. Yet, in spite of the worst recession in recent history,

the Europeans still support the common currency. Europe seems trapped in catch-22: there is no desire to go backward, no interest in going forward, but it is economically unsustainable to stay

still.


Sunday, October 26, 2014

Simon Wren-Lewis : Why the Eurozone suffers from a Germany problem

mainly macro: Why the Eurozone suffers from a Germany problem: When, almost a year ago, Paul Krugman wrote six posts within three days laying into the stance of Germany on the Eurozone’s macroeconomic p...

EBA publishes 2014 EU-wide stress test results - View press release - European Banking Authority

EBA publishes 2014 EU-wide stress test results - View press release - European Banking Authority



Bloomberg and Reuters
Waiting for Frances Coppola 's take on the subject, check again on her post Financial hurricanes

Here is Tyler Durden 's at ZeroHedge

Gavyn Davies at FT asks: "Two crucial questions remain. Has enough at last been done to fix the European banking system? And will this on its own be enough to ward off the threat of deflation that is hanging over the eurozone?"

While Dan McCrum at FT Alphaville "On the broader outlook, remember that at heart it is all about lending, and whether banks will now do more of it. Not likely, says Alberto (Gallo from RBS).
What does this mean for lending? 80% of banks may have passed the test, and two-thirds comfortably so, but even so they may still not be ready to expand lending. As we discussed in last week’s Revolver, banks remain reluctant to lend because of low leverage ratios, low quality of capital and weak demand for credit. 

Christian Schulz, Senior Economist of Berenberg 
"A period of stress and uncertainty ends for Eurozone banks with the end of the exercise. We expect banks to refocus their resources on running their business, which should gradually improve credit availability where it was impaired. The
growth impact on the Eurozone next year will be small (we estimate 0.1-0.2% of GDP), but in the periphery, where credit availability has been restricted, the impact could be larger. The ECB is providing generous funding if banks want to increase new lending."

Greece and austerity policies: Where next for its economy and society?

Greece and austerity policies: Where next for its economy and society?

Saturday, October 25, 2014

Simon Wren-Lewis : Redistribution between generations

mainly macro: Redistribution between generations

Anatole Kaletsky at Reuters Comments : "Europe’s economic and political future will be determined in the next few days"

Europe’s economic and political future will be determined in the next few days

H ΚΑΘΗΜΕΡΙΝΗ, ΤΟ ΒΗΜΑ, και The Economist

Η  -έντυπη- ΚΑΘΗΜΕΡΙΝΗ, 25Οκτ. αναδημοσιεύει στήλη από την έντυπη έκδοση του ECONOMIST «Έωλα τα σχέδια εξόδου της Ελλάδας από το Μνημόνιο» . Ο τίτλος του Economist, είναι: Not so fast: a spike in bond yields is bad news for the government    (ΣΣ. καλή μετάφραση).
Η ηλεκτρονική έκδοση του ΤΟ ΒΗΜΑ, 24 Οκτ. 10:34, με τίτλο Economist: Ο Τσίπρας οικοδομεί γέφυρες με ΕΕ και Βερολίνο: «Κρατά καθησυχαστική στάση απέναντι στους δυνητικούς επενδυτές ,  δημοσιεύει εκτενή αποσπάσματα -σχεδόν όλο το κομμάτι του Economist.
Μέχρις εδώ, όλα καλά! Αλλά, υπάρχει μία κοινή παράληψη και στα δύο μέσα.
Απέκοψαν την τελευταία φράση της καταληκτικής παραγράφου.
The hedge funds that led the recent stampede out of Greek bonds have yet to be entirely convinced.
Γιατί άραγε; Μήπως αυτή η φράση αναιρεί το κύριο «συμπέρασμα» των;
Σχόλιο αναγνώστη στο ΤΟ ΒΗΜΑ: «σίγουρα? | 24/10/2014 13:27

Εισατε σιγουροι οτι γραφει αυτο που μας λετε το αρθρο...? Μηπως δεν γνωριζετε αγγλικα?» 

Wednesday, October 22, 2014

David Einhorn at Business Insider : Long Greece, Short France" !

"From Defensive to Assertive Social Democracy"(pdf)

ABSTRACT The neoliberal push for increasing the role of markets has put social democracy into a defensive position, but this should be easy to resist. Marketization is often a useful development, and as such can be embraced by social democrats. But it often also has negative implications that are widely recognized, and which need to be confronted and dealt with. Meanwhile, in practice so-called neoliberal policies are often about strengthening corporate power rather than markets. Dealing with these issues has been social democracy’s specific historic role, so a period of intensified markets should leave it better placed than any other political movement to welcome the role of markets while being alert to their negative externalities; to seek the creative possibilities of diversity in the face of neoliberal hegemony;and to distinguish between true markets and corporation-dominated ones. 

Clive Crook at Bloomberg QuickTake : "Secular Stagnation

Europe’s Brush with Debt by Hans-Werner Sinn - Project Syndicate

Europe’s Brush with Debt by Hans-Werner Sinn - Project Syndicate

Κ. Γάτσιος - Δ. Ιωάννου: «Το πρόβλημα της ελληνικής οικονομίας δεν είναι η ενεργός ζήτηση» - οικονομικές ειδήσεις της ημέρας - Το Βήμα Online

Κ. Γάτσιος - Δ. Ιωάννου: «Το πρόβλημα της ελληνικής οικονομίας δεν είναι η ενεργός ζήτηση» - οικονομικές ειδήσεις της ημέρας - Το Βήμα Online

Monday, October 20, 2014

The Inequality Trifecta by Mohamed A. El-Erian - Project Syndicate

The Inequality Trifecta by Mohamed A. El-Erian - Project Syndicate

Markets right to worry about euro zone | Hugo Dixon

Markets right to worry about euro zone | Hugo Dixon



""As if this were not enough, the euro zone continues to inflict wounds on itself. The latest was Greece’s rush to exit its bailout programme. The bond markets reacted by pushing up Greek bond yields last week to such a level that Athens’ ability to stand on its own two feet is off the agenda for the foreseeable future.

Meanwhile, a snap election may be held in Greece early next year. That would probably be won by the radical left Syriza party, which wants to write off half the government’s debts. This could cause contagion in Italy, whose debts are an eye-popping 137 percent of GDP."""
Τί λέει ο ΣΥΡΙΖΑ?
Πώς θα σχολίαζε ο Ezra Klein? How politics makes us stupid... 

Wolfgang Streeck: How Will Capitalism End?

New Left Review - Wolfgang Streeck: How Will Capitalism End?



W.S. concludes

""In summary, capitalism, as a social order held together by a promise of boundless collective progress, is in critical condition. Growth is giving way to secular stagnation; what economic progress remains is less and less shared; and confidence in the capitalist money economy is leveraged on a rising mountain of promises that are ever less likely to be kept. Since the 1970s, the capitalist centre has undergone three successive crises, of inflation, public finances and private debt. Today, in an uneasy phase of transition, its survival depends on central banks providing it with unlimited synthetic liquidity. Step by step, capitalism’s shotgun marriage with democracy since 1945 is breaking up. On the three frontiers of commodification—labour, nature and money—regulatory institutions restraining the advance of capitalism for its own good have collapsed, and after the final victory of capitalism over its enemies no political agency capable of rebuilding them is in sight. The capitalist system is at present stricken with at least five worsening disorders for which no cure is at hand: declining growth, oligarchy, starvation of the public sphere, corruption and international anarchy. What is to be expected, on the basis of capitalism’s recent historical record, is a long and painful period of cumulative decay: of intensifying frictions, of fragility and uncertainty, and of a steady succession of ‘normal accidents’—not necessarily but quite possibly on the scale of the global breakdown of the 1930s.""

Tuesday, October 14, 2014

Edward Hugh : "Don't Shoot the Messenger » Eurocrisis Round Two, Blame the Germans Edition"

Great post by Edward Hugh



EconoMonitor : Don't Shoot the Messenger » Eurocrisis Round Two, Blame the Germans Edition



What southern Europe needs is a revolution in the mindset and more “better quality” stuff, and no amount of blaming Germany for the situation can get over that. The extractive networks who hold back growth need reforming out of existence.  (emphasis added)


He quotes Paul Krugman: " “Draghi can try to get traction through quantitative easing, but it’s by no means clear that this could do the trick even under the best of circumstances — and in reality he faces severe political constraints on what he can do.” - 

... and inserts the below pic.... great!






Monday, October 13, 2014

Thursday, October 9, 2014

How to pull the eurozone out of the mire | CER

How to pull the eurozone out of the mire | CER

Andreas Bombret / Bundesbank : Designing a Stable Monetary Union

The Bundesbank view(?)



www.brookings.edu/~/media/events/2014/10/08 monetary union/andreas_dombret_brookings_speech.pdf



also presentation at Brookins event (video)

Ν. Χουντής: «Στόχος μας η διαγραφή του μεγαλύτερου μέρους του χρέους με ρήτρα αποπληρωμής και ανάπτυξης»

Ν. Χουντής: «Στόχος μας η διαγραφή του μεγαλύτερου μέρους του χρέους με ρήτρα αποπληρωμής και ανάπτυξης»



Ο Ν.Χ. είναι υπεύθυνος της επιτροπής του ΣΥΡΙΖΑ για τη διαπραγμάτευση του χρέους, 





Τρείς άξωνες

1. Να δούμε ποιό πραγματικά το ύψος μετά απο Διεθνή Λογιστικό Έλεγχο.... απαλείφοντας, διαγράφοντας, αποσύροντας το επαχθές μέρος

2. Να δούμε σε ποιό βαθμό φταίει η ΕΕ, που αν και γνώριζε, μας άφησε να φτάσουμε εκεί που φτάσαμε, και να μας ¨αποζημειώσει¨

3. Μετά τα <1> και <2> να δούμε άν και σε ποιό βαθμό αυτό που μένει το αντέχει η οικονομία




Wednesday, October 8, 2014

IMF FISCAL MONITOR October 2014

www.imf.org/external/pubs/ft/fm/2014/02/pdf/fm1402.pdf



left.gr 'Χρηματοδοτικό κενό 27 δισ. ευρώ για το 2015-2016"

Απο τους πίνακες
2006        2007        2008       2009       2010       2011       2012        2013        2014        2015        2016       2017
General Government Overall Balance (Percent of GDP)
–6.2          –6.8              –9.9        –15.6        –11.0         –9.6          –6.4           –3.2            –2.7             –1.9          –0.6         –0.7

General Government Primary Balance (Percent of GDP)
–1.6          –2.0               –4.8         –10.5         –5.1         –2.4         –1.3            0.8               1.5               3.0              4.5           4.5

General Government Cyclically Adjusted Balance (Percent of potential GDP)
–8.7          –10.8          –14.3       –19.1       –12.3         –8.3             –2.3            1.6              1.6               1.2              1.2           0.4

General Government Cyclically Adjusted Primary Balance (Percent of potential GDP)
–3.7          –5.6            –8.6         –13.6       –6.2            –1.3             2.3             5.1             5.4                5.7              6.1           5.5

General Government Revenue (Percent of GDP)  
39.2          40.7            40.7           38.3         40.4            42.2            43.8          44.0           44.6           43.2            42.4           42.2

General Government Expenditure (Percent of GDP)
45.4          47.5          50.6          54.0           51.4           51.9          50.2          47.2              47.3           45.1             43.0          42.9
   
General Government Gross Debt (Percent of GDP)
107.5        107.2        112.9        129.7        148.3        170.3         157.2         175.1         174.2         171.0          160.5           152.0

General Government Net Debt (Percent of GDP)
107.5        107.2        112.9        129.7        148.3        170.3        153.5          169.7        168.8          166.6          157.6           149.6


Turkey, the Kurds and Iraq: The Prize and Peril of Kirkuk | Stratfor

Turkey, the Kurds and Iraq: The Prize and Peril of Kirkuk | Stratfor

Special issue on Piketty's Capital :real-world economics review

real-world economics review

Friday, October 3, 2014

Roberto Orsi : Why Italy will not make it | Euro Crisis in the Press

The 'dos and don'ts' of a growth-friendly policy mix for the Euro area | Carlo Altomonte and Tommaso Aquilante at Bruegel.org

The 'dos and don'ts' of a growth-friendly policy mix for the Euro area | Carlo Altomonte and Tommaso Aquilante at Bruegel.org

The German Constitutional Court’s decision on OMT: Have markets misunderstood?

via http://www.voxeu.org/article/markets-and-german-court-s-decision-omt



www.voxeu.org/sites/default/files/image/FromMay2014/PolicyInsight74.pdf

Carsten Brzeski : Eurozone - Heading towards Animal Farm?

Merkelnomics: Eurozone - Heading towards Animal Farm?



The Eurozone is preparing for yet another showdown on the right balance between austerity and growth. Italy, but even more so France, laid down the gauntlet to EU partners in recent days, presenting fiscal plans which would clearly be in strong contrast with the Eurozone’s fiscal framework.

Wednesday, October 1, 2014

Now Is a Good Time to Invest in Infrastructure | iMFdirect - The IMF Blog

Now Is a Good Time to Invest in Infrastructure | iMFdirect - The IMF Blog

Germany Fights on Two Fronts to Preserve the Eurozone | Stratfor

Germany Fights on Two Fronts to Preserve the Eurozone | Stratfor

This puts Germany in a dilemma because two of its key imperatives are in contradiction. Will it save the eurozone to protect its exports, writing a big check as part of the deal? Or will it oppose the ECB moves, which if blocked could mean a return to dangerously high bond yields and the return of rumors of Greece, Italy and others leaving the currency union?