Posts from Monday Jun 17 2013

The Closer


– Another reaction to Cardiff’s taxonomy post — hand payroll tax rates to the Fed? Read more

The case for official e-money +1

The voices arguing that digital e-money should be added to the central bank/government toolkit are not only rising in number, they’re getting louder as well.

Among the first to argue the point, of course, was Willem Buiter back in 2009, before he took up the position of chief economist at Citi. But there’s also been a strong patter of support from advocates such as Mobino’s Jean-Francois Groff and Slate’s Matt Yglesias (to name a few). Read more

We cannae give the economy no more, we’re giv’n it all we’ve got Captain

The working theme at FT Alphaville towers is that we’re in somewhat of a damned if we do taper/suspend QE, and damned if we keep going with it.

There is, as we’ve long been noting, good reason to suspect the economy cannot handle any more quantitative easing in its traditional form.

What’s more, we now know that even the whiff of tapering — which is anything but an unwind, as we’ve noted here — can cause undue chaos in risk assets. In which case, perhaps tapering isn’t as much of an option as many believe it to be.

After all, QE reflects the sovereign put. It’s the government subsidy which takes volatility away. If you stop dishing it out, there’s every chance bad things may happen.

And the following chart, which comes to us by way of Aurelija Augulyte, reflects this relationship perfectly: Read more

Hacking and property prices make the BoE big league

The Bank of England has ushered some new risks into its biannual risk survey.

Out of the list of top seven key risks go funding risk, the risk of financial market disruption/dislocation and the risk of tightening in credit conditions. In their place we get the risk of property price falls, operational risk (‘cyber’ security), and risks surrounding the low interest rate environment. Read more

Markets Live: Monday, 17th June, 2013

Live markets commentary from 

The (early) Lunch Wrap

G8 dispute breaks out on Syria arms || Trade deal would benefit US more than EU, Ifo study finds || Apple reveals US government data requests || Bid to relaunch synthetic CDO unravels || Bolton to step down at Fidelity China fund || Official negative rate policy at SNB seen unlikely || Co-operative Bank outlines restructuring plan to raise £1.5bn Read more

Time to take basic income seriously?

Paul Krugman is getting serious about the effects of technology and robots on the economy. He’s made noises about this theme before, but this time he’s taking things a bit further by offering a potential solution to the more sour consequences of the new industrial revolution.

If the fight is between capital and labour, and capital is winning, it seems subsidies in the form of some basic type of income may be called upon. Read more

Further reading

Elsewhere on Monday,

– China’s Great Uprooting.

– Multipliers in a monetary union and at the ZLBRead more

The London 6am Cut


– A college degree vs being born rich.

– Saving Abenomics: no time for cold feet on QE.

Protectionism’s quiet return.

– Steve Randy Waldman on helicopter dropsRead more

QE down under

Another day, another Aussie GDP downgrade.

From BofA Merrill Lynch: Read more