Saving Europe By Reversing Brexit

Anatole Kaletsky

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

SEP 29, 2016 Pproject Syndicate

LONDON – “Never let a crisis go to waste” has always been one of the European Union’s guiding principles. But what about five simultaneous crises? Today, the EU faces what Frans Timmermans, European Commission Vice President, describes as a “multi-crisis”: Brexit, refugee flows, fiscal austerity, geopolitical threats from East and South, and “illiberal democracy” in central Europe. Rather than wasting its crises, the EU could be laid to waste by them.

If so, Brexit will be the detonator for that demolition. By legitimizing the concept of an EU breakup, and thus turning a fantasy among political extremists into a realistic option of mainstream politics throughout Europe, Brexit threatens to trigger an irresistible disintegration process. It will also transform economics, by paralyzing the European Central Bank in the next euro crisis: while the ECB can always defeat market speculation, it is powerless against breakup pressures from voters.

Why Deep Learning Is Suddenly Changing Your Life

By Roger Parloff, Fortune Magazine

Illustration by Justin Metz

September 28, 2016, 5:00 PM EDT

Decades-old discoveries are now electrifying the computing industry and will soon transform corporate America.

Over the past four years, readers have doubtlessly noticed quantum leaps in the quality of a wide range of everyday technologies.

Most obviously, the speech-recognition functions on our smartphones work much better than they used to. When we use a voice command to call our spouses, we reach them now. We aren’t connected to Amtrak or an angry ex.

In fact, we are increasingly interacting with our computers by just talking to them, whether it’s Amazon’s Alexa, Apple’s Siri, Microsoft’s Cortana, or the many voice-responsive features of Google. Chinese search giant Baidu says customers have tripled their use of its speech interfaces in the past 18 months.

Machine translation and other forms of language processing have also become far more convincing, with Google googl , Microsoft msft , Facebook fb , and Baidu bidu unveiling new tricks every month. Google Translate now renders spoken sentences in one language into spoken sentences in another for 32 pairs of languages, while offering text translations for 103 tongues, including Cebuano, Igbo, and Zulu. Google’s Inbox app offers three ready-made replies for many incoming emails.

Geld und (Un)Freiheit

Von Gero Jenner, 29/9

(aktualisiertes Original:

http://www.gerojenner.com/gerojenner.com/Geld_und_%28Un%29Freiheit.html)

Jean-Jacques Rousseau beantwortete eine Preisfrage der Akademie von Dijon mit der unerwarteten These, die Zivilisation bilde in Wahrheit den Anfang aller sozialen Übel. Wenn Fabian Scheidler in seinem Buch „Das Ende der Megamaschine“ die Rolle des Geldes beleuchtet, dann schlägt er in die gleiche Kerbe. Mit der Einführung der Geldwirtschaft, welche dem Staat ein regelmäßiges Steueraufkom­men gewährte, hätte schon die erste organisierte Marktwirtschaft der Geschichte, das klassische Griechenland, den Menschen die Freiheit genommen. Sie seien gezwungen worden, für den Markt zu produzieren, um sich das nötige Geld zu verschaffen, von dem sie dann den ihnen auferlegten Teil an Steuern an den Staat abgeben mussten.

Voltaires Spott über die Freiheit der Wilden

Rousseau lebte in einem Jahrhundert, dem achtzehnten, das sich der ganzen Menschheitsgeschichte unendlich überlegen dünkte und sich selbst als Siècle des Lumières (als Zeitalter der Aufklärung) verstand. Es war nicht das erste Mal, dass ein Denker der eigenen Zeit den Fehdehandschuh entgegenhält, indem er eine Meinung vertritt, die der zu seiner Zeit vorherrschenden diametral widerspricht. Kein Geringerer als Voltaire machte dem Genfer Philosophen denn auch den spöttischen Vorwurf, er würde die Menschheit wohl am liebsten erneut auf allen Vieren kriechen sehen. Den gleichen Vorwurf darf man gegen Fabian Scheidler erheben. Geld ist ein ganz besonderer Stoff, kostbar, wenn er aus unvergänglichem Gold besteht, ein bedrucktes Nichts, wenn man es aus Papier erzeugt. Dass es aber in der Geschichte menschlicher Zivilisation eine zentrale und im Großen und Ganzen auch unverzichtbare Rolle spielte, steht außer Zweifel: Erst Geld schweißte Gesellschaften zusammen, sorgte dafür, dass nach der neolithischen Revolution mit ihrer Erfindung der Landwirtschaft der Mensch weiterhin als soziales Wesen in großen Staaten zu überdauern vermochte.

No Quick Fix to City of London’s Brexit Conundrum

Date: 29-09-2016
Source: The Wall Street Journal By SIMON NIXON

Some argue EU rules provide a way for London-based banks to keep their access
to Europe, but the reality is more complicated, Simon Nixon writes

The City of London generates an estimated £60 billion in U.K. tax revenues annually.

As the debate over how to carry out Brexit intensifies, the City of London finds itself in the firing line. To some hard-line Brexiters, repeated warnings from bankers about the costs of quitting the European single market and losing passporting rights—which allow U.K.-based firms to sell financial services anywhere in the European Union—smack of special pleading. Passporting is a red herring, they say, because the U.K. would qualify as an “equivalent” regulatory regime under EU rules, allowing most financial-services activity to carry on as before. City warnings of imminent doom often turn out to be wrong, not least over Brexit itself. The City will be fine because it is always fine.

The City, though, hasn’t always been the global financial hub it is today. In the decades after World War II, London was a backwater, a largely domestic capital market, dominated by domestic firms and presided over by an old-money elite sustained by fat, fixed commissions, elaborate barriers to entry and rampant insider trading.

Irritationen im Raiffeisen-Reich

29.09.2016 | 05:51 | Hanna Kordik (Die Presse)

Kolumne Eigentlich hätte die Fusion von RZB und Raiffeisen International vergangene Woche offiziell beschlossen werden sollen. Doch bei dem wichtigen Termin fehlte ausgerechnet die Schlüsselperson: Heinrich Schaller ließ sich entschuldigen.

Für große Ereignisse braucht’s starke Nerven, keine Frage. Oft ist es aber so, dass das Nervengerüst aller möglichen beteiligten Personen eher nicht so stabil ist, weil es sich eben um ein so großes Ereignis handelt. Man sieht also: Der gemeine Teufelskreis kennt keine Gnade.

Kommen wir von der Theorie zur Praxis: Die geplante Fusion der Raiffeisen-Spitzeninstitute ist da ein ganz gutes Beispiel. Bekanntlich soll die Raiffeisen Zentralbank (RZB) mit ihrer börsenotierten Osteuropatochter Raiffeisenbank International (RBI) fusioniert werden. Und die Nerven aller Beteiligten sind bis zum Anschlag gespannt. Die Herrschaften im Reich des „grünen Riesen“ haben ja in den vergangenen Monaten auch jede Menge Probleme zu bewältigen gehabt. Da war zunächst die Frage, wer mit wem fusioniert. Dann ging es darum, ob auch alle an einem Strang ziehen. Und schließlich auch um die Frage, wer denn überhaupt der starke Mann im neuen Konglomerat sein soll.

Klar ist, dass RZB-Chef Walter Rothensteiner und RBI-Chef Karl Sevelda das – aus Altersgründen – eher nicht sein werden. Wer dann? Da gibt es eigentlich nur einen, der in Frage kommt: Heinrich Schaller nämlich. Seines Zeichens Chef der Raiffeisenlandesbank Oberösterreich.

Yellen: Leitzins-Erhöhung könnte in größeren Schritten erfolgen

Deutsche Wirtschafts Nachrichten  |  Veröffentlicht: 29.09.16 01:58 Uhr

Fed-Chefin Yellen hält es für denkbar, dass die Leitzinsen stärker erhöht werden als dies an den Aktienmärkten gern gesehen würde. Allerdings werden die nächsten Schritte erst nach der US-Wahl erfolgen.

Die Vorsitzende der Fed, Janet Yellen.

 

Die US-Notenbank hat nach Angaben ihrer Chefin Janet Yellen keinen festgelegten Zeitplan für eine Erhöhung des Leitzinses. Vor dem Finanzdienstleistungs-Ausschuss des US-Repräsentantenhauses sagte Yellen am Mittwoch, die Zinspolitik müsse gut abgewogen werden. Sollte sich der Arbeitsmarkt und damit die Wirtschaft überhitzen, müssten die Zinsen möglicherweise in schnelleren Schritten angepasst werden, als den Märkten lieb sei.

Die Finanzmärkte gehen derzeit von der nächsten Erhöhung des US-Leitzinses im Dezember aus. Die letzte Anhebung läge dann genau ein Jahr zurück. Im September hatte die Fed den Zins erwartungsgemäß auf dem aktuellen Niveau von 0,25 bis 0,5 Prozent belassen.

Yellen verwahrte sich gegen vom republikanischen Präsidentschaftsbewerber Donald Trump erhobene Vorwürfe, die Notenbank lasse sich von parteipolitischen Vorgaben leiten. In Medien wurde kolportiert, das Fed-Mitglied Lael Brainard habe kürzlich Kontakt mit Trumps demokratischer Kontrahentin Hillary Clinton gehabt. Ein solcher Kontakt sei ihr nicht bekannt, sagte Yellen.

The Perils of Debt Complacency

Carmen Reinhart

Carmen Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

SEP 28, 2016, Project Syndicate

CAMBRIDGE – “What a government spends the public pays for. There is no such thing as an uncovered deficit.” So said John Maynard Keynes in A Tract on Monetary Reform.

But Robert Skidelsky, the author of a magisterial three-volume biography of Keynes, disagrees. In a recent commentary entitled “The Scarecrow of National Debt,” Skidelsky offered a rather patronizing narrative, in a tone usually reserved for young children and pets, about his aged, old-fashioned, and financially illiterate friend’s baseless anxiety about the burden placed on future generations by the rising level of government debt.

If Skidelsky’s point had been that some economies, including the United States, would benefit from higher infrastructure spending, even at the cost of more debt, I would agree wholeheartedly. Compelling reasons for boosting US public investment include deteriorating infrastructure, tepid growth, low interest rates, and limited scope for further monetary stimulus. For the US, such an impetus might be especially welcome as the Federal Reserve raises interest rates (albeit gradually) while other countries ease further or hold rates steady and the dollar likely strengthens.

Conceptual challenges in international finance

Stefan Avdjiev, Robert McCauley, Hyun Song Shin

Stefan Avdjiev

Senior Economist and Deputy Head of International Banking and Financial Statistics, Bank for International Settlements

Robert McCauley

Senior adviser in the Monetary and Economic Department, Bank for International Settlements

Hyun Song Shin

Economic Adviser and Head of Research, Bank for International Settlement

28 September 2016, vox.eu

Working with the wrong accounting classifications can lead to wrong conclusions in any area of economics. But it is especially treacherous in international finance, due to the importance of key currencies and the operations of multinational firms, especially global banks. Much of the analysis in international finance is still conducted under the assumption that the GDP area, decision-making unit and the currency area coincide – the so-called ‘triple coincidence’. This column illustrates the common analytical missteps that can arise by reviewing three examples from the recent past, and argues that a proper analysis of capital flows necessitates paying greater attention to basic accounting building blocks.

Capital flows are traditionally viewed as the financial counterpart to savings and investment decisions. In textbooks, the unit of analysis is the national GDP area, and what is ‘external’ or ‘internal’ is defined with reference to its boundaries (e.g. Krugman et al. 2012, Obstfeld and Rogoff 1996). This perspective naturally leads to a focus on net capital flows between countries, and the current account indicates the borrowing requirement of the country as a whole.

How Scary is Disruptive Technology?

Martin Feldstein

Martin Feldstein, Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, chaired President Ronald Reagan’s Council of Economic Advisers from 1982 to 1984. In 2006, he was appointed to President Bush’s Foreign Intelligence Advisory Board, and, in 2009, was appointed to President Obama’s Economic Recovery Advisory Board. Currently, he is on the board of directors of the Council on Foreign Relations, the Trilateral Commission, and the Group of 30, a non-profit, international body that seeks greater understanding of global economic issues.

SEP 28, 2016, Project Syndicate

CAMBRIDGE – The steady stream of improvements in driverless cars has convinced me that before too long the roads will be filled with cars and trucks operating without humans at the wheel. Likewise, I am convinced that the revolution in artificial intelligence will allow computers and robots to do many of the tasks that white-collar workers now do.

It’s not surprising, therefore, that many people are worried about the fate of those whose jobs are vulnerable – or have already been lost – to the latest disruptive technology. What will happen to the millions of men and women who now drive trucks and taxis when the trucks and taxis can drive themselves? What will happen to the accountants and health workers when computers can do their jobs?

Confronting the Populists

Chris Patten

Chris Patten, the last British governor of Hong Kong and a former EU commissioner for external affairs, is Chancellor of the University of Oxford.

SEP 28, 2016

SAINT-MARTIN-LAGUÉPIE – Here’s a confession: I don’t lie in bed at night missing mainstream politics. Instead, I am spending a week at my house in southwest France, walking around the countryside. The early autumn sun is warm on my back, the trees are starting to change color, and local farmers are preparing for this year’s grape harvest. What’s not to like?

Back in the political world, the answer is quite a lot. On the left and right – few mainstream leaders are having such a good year. In fact, one must search for any notable achievements.

In France, President François Hollande looks like damaged goods as he prepares for next spring’s election. The French economy benefits from high productivity potential and a well-educated work force, but trade unionists and other members of Hollande’s Socialist Party are blocking measures that would restore strong growth. Meanwhile, former President Nicolas Sarkozy and former Prime Minister Alain Juppé are vying for control of the center-right opposition in order to challenge Hollande and head off Marine Le Pen of the far-right National Front.