A little of this, a little of that, from my blogger colleagues:
-- Edward Hugh brings our attention to a Financial Times report on a new proposal from Nicolas Sarkozy, president of France's Union for a Popular Movement (UMP) party that would make the largest countries in the EU
"...the motor of the new Europe."
Mr Sarkozy said this G6 - France, Germany, the UK, Italy, Spain and Poland - should make collective proposals to other EU leaders. The other members could accept or reject these proposals, but they should not be able to prevent the G6 from pursuing them.
In another post, Edward reports that the Swiss have voted to gradually ease restrictions on the free movement of workers from the EU-10 'new accession’ members.
And from Edward one more time, this news:
Eurostat reports that 12 EU states exceeded the 3% stability and growth pact limit last year...
All the larger EU states (with the honourable exception of Spain) had excess deficits...
Maybe this helps to explain this, from Nattering Naybob:
While most investors suspected there was wholesale diversification from USD holdings by major central banks, the IMF’s data paint a very different picture. The volume of EUR purchases last year was significantly less (about half) than the share of EUR holdings in total reserves at end-2003.
The latest IMF report shows global holdings of official reserves in USDs rose from 65.8% to 65.9%.
A related take, from The Prudent Investor:
I assume that the political uncertainties in Germany and fears of unabatedly rising deficits in the USA will keep currencies in an equilibrium.
-- Calculated Risk notices today's Wall Street Journal article by Greg Ip (page A1 in the print edition), that contains a new warning from Chairman Greenspan:
Federal Reserve Chairman Alan Greenspan, drawing on new research he has personally supervised, said American consumers have become enormously dependent on borrowing against their homes to fuel their spending, and that a rise in mortgage rates could trigger a spending pullback.
Mark Thoma has the story too (and throws in Bernanke on the risks associated with energy price increases, optimism from Chicago Fed president Michael Moskow and Governor Susan Bies). The Housing Bubble 2 has even more.
For better or worse, them, The Skeptical Speculator reminds us that the "U.S. housing market remains strong."
-- While we are thinking about housing, Tax Policy Blog outlines the case against home mortgage interest deductions. The essence of the argument:
Simple: by giving a tax subsidy to housing, it distorts investment decisions toward houses and away from assets like factories and equipment that are more productive at the margin. And that makes workers less productive, ultimately lowering wages and making society poorer.
-- For those looking to the practical end of the whole housing price debate, Calculated Risk considers the rent versus buy decision at Angry Bear.
--William Polley asks bloggers to weigh in on FOMC policy, and Everyone's Illusion predicts three more rate hikes are coming. William hopes it isn't so.
-- Barry Ritholtz continues his campaign against the notion of core inflation. Debate is good -- but I'm holding my position for now.
-- David K. Smith does some China myth-busting.
-- Econbrowser kicks out another must-read post on the origins of the U.S. current account deficit. Jim is worried. Mark Thoma helps out with some advice from The Economist. The bottom line -- the U.S. should save more, China and other emerging-economy countries should save less.