Thursday, 2 October 2008

Blogs : 2nd October

The forgotten election: Slovenia. Vitaliy, The 8th Circle (en)

A coordinated EU response to the economic slowdown (supplemented). Julien Frisch, Watching Europe (en)
" ... Meanwhile, in another draft conclusions, the Council is discussing a new framework for executive pay. The draft conclusions say on the objective of a new regulatory framework on that issue (quote): The governance framework should be conducive to an effective control by shareholders, Performance should be properly and comprehensibly reflected in executives' pay, Performance criteria should provide the right incentives, Care should be taken to prevent potential conflicts of interest for executives conducting mergers and acquisitions ..."

Crise financière: à quoi sert la Commission? Jean Quatremer, Les Coulisses de Bruxelles (fr)
" ... Alors que la crise financière est vieille de treize mois et qu’elle ravage l’Union européenne depuis deux semaines, la Commission sort enfin de son silence. Loin de proposer un plan d’envergure visant à assainir les marchés financiers, elle se contente de quelques - timides - mesures de régulation financière. Mais c’est à contrecœur qu’elle agit, tant cela met à mal les présupposés idéologiques d’un collège largement dominé par une droite antiétatiste, qui, depuis son entrée en fonction, en novembre 2004, prône les vertus de «l’autorégulation» dont on a vu les limites ...
... A Paris, l’agacement grandi à l’égard de McCreevy, mais aussi de José Manuel Barroso, le président de la Commission. «S’il ne prend pas ses responsabilités pour proposer une voie de sortie de crise, il compromet ses chances de réélection à la tête de la Commission l’année prochaine», gronde un responsable français. Jusque-là, il était soutenu par Sarkozy."

The Global Economy and her Financial Markets – Is Deflation the Next Macro Story? Alpha.Sources-CV (en)
" ...Meanwhile and beyond the immediate eye of the storm on Wall Street, Europe is entering its own house of pain as cracks in the banking sector begin to steadily emerge. Add to this that the macro environment is pointing towards a steep Eurozone wide recession and you have the ingredients for a very serious downturn on the European continent. I still hold that the lack of real response on the rate front will not only hurt the ECB’s credibility, but also worsen the inevitable slump ...
... In conclusion, one of the main forward looking macro themes I am watching at the moment is the potential for deflation. I would especially ascribe this risk to be high in economies in need of serious competitive and debt reducing corrections as well as in economies unable to muster sufficient domestic demand to stay above water when external demand falters. In my rudimentary analysis I use demographics as a yardstick and as such my claim is quite easily falsifiable. The only thing we need to do then is to watch and see what happens."

The heart of the crisis. Richard, The EUReferendum (en)
" ... Where the problem lies is in the extraordinarily laborious system of risk assessment, combined with a requirement to structure different types of asset, giving rise to entirely artificial under-valuation, which is the current cause of the bank liquidity problems.It was this system which emerged from the Basel II process and which was adopted by the United States, the EU and other financial administrations

Euro Currency insanity now clear for all! Irony Too (en)
" ... Ambrose Evans-Pritchard has more apt comment in the Telegraph today, here, and he there confirms my assertion that with the rescue of AIG, as I stated on 17th September, here, the US Taxpayers under the Paulson plan are mainly helping the Europeans ..."

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