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Best of the Blogs, Financials: Dutch Election to Be Decisive for Euro


Plus, who's afraid of a stable risk management industry?

This column highlights the most interesting and useful business and financial commentary on financials from around the Web.

Link: Austerity Goes to the Polls, Dutch edition
"The upcoming Dutch elections on September 12 have real potential to upset the markets, yet seem to be attracting rather a small amount of attention. That they come on the same day as the decision on ESM by the German constitutional court just adds to the potential for trouble."

"The Dutch far-left Socialist Party ('SP') has seen a strong surge in support lately, winning over voters with its call for a sharp easing of recently-agreed austerity measures and an end to bailouts in the south of Europe. The party has never been in power, and won only 15 seats (in a 150-seat parliament) in the last election. Polls suggest it could win around 34 seats this time around, which would make it the biggest party in parliament."

A Fistful of Euros
Link: The Owl of Minerva
"Last week was the fifth anniversary of the outbreak of the global financial crisis. Not uncoincidentally it was also the fifth anniversary of continually rising unemployment in Spain, since it was in early summer 2007 that seasonally adjusted Spanish unemployment embarked on its steady upward path. And after it started climbing, naturally it hasn't stopped since. Indeed we seem to have at least another year of growing unemployment before us, maybe more. "

"July inflation in Spain was running at 2.2% compared to 1.7% in Germany. Prices in Spain are going up, largely due to all those tax increases laid down in the adjustment measures. Annual inflation will probably surge by around two percentage points in September as the new consumption tax rates fall into place. So it is only wages which are likely to be coming down, and this makes it all feel much more like 1930s type wage deflation than the sort of internal devaluation that has been being advocated […]."

Link: Wall Street Leaderless in Rules Fight as Dimon Diminshed
"Wall Street, the global financial community reeling from public outrage and increased regulation, is proving incapable of finding a champion to replace sidelined JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon."

"Bankers across the Atlantic, including former Barclays Plc (BCS) CEO Robert Diamond and Peter Sands of Standard Chartered Plc (SCBFF) have been muted by allegations that their firms rigged interest rates or were involved in money laundering."

Link: Restoring Trust in the Futures Market
"The recent failures of MF Global (MFGLQ) and Peregrine Financial, and the reported manipulation of the Libor benchmark for interest rates, could not have come at a worse time for the risk management industry. Severe weather problems in our major agricultural areas, uncertainty in the European and United States financial systems, a stubborn low-growth economic environment, instability in the Middle East that threatens energy supplies, and slower growth in China and Asia all spell the pressing need for a reliable and trustworthy risk management industry."

Link: Germany Backs Draghi Plan Against Bundesbank
"Chancellor Merkel said last week that the Draghi Plan is 'in line' with German policy so long as the conditions imposed on Spain and Italy are tough enough, but Berlin has been sending mixed messages. Finance Minister Wolfgang Schauble said on Sunday that ECB financing of state deficits was anathema: 'If we start doing that, we won't stop. It's like when you start trying to solve your problems with drugs.'"
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