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QE is reversible, goes the argument: monetary financing is forbidden.

This is something that you have to say when you are currently a central banker, to prevent politicians running off to the sweetshop with central-bank funded spending.

Those who have previously been in the chair, such as Lord King, seem relaxed at the largesse. The question is one of degree, and confidence in the independence of institutions.

Telegraph  8 April 2020

EU Fails to Agree on 500 bn euro. Negotiations end in acrimony

The acrimony (bitterhet) highlights how Europe is mired in the same old divisions that almost tore it apart during the sovereign debt crisis almost a decade ago. 

Bloomberg 8 April 2020

In 2012 she /Ms Merkel/ said there would be no eurobonds “as long as I live”. After nine European heads of government wrote a joint letter last month saying the EU needed to “work on a common debt instrument”, she said pointedly that that wasn’t “the opinion of all member states”.

 Germany’s constitutional court had made clear that such an innovation would need the prior approval of the Bundestag, and a two-thirds majority might be required for such a fundamental change

FT 6 April 2020

Time to integrate further or break-up

For two decades they /Northern leaders /have shied away from the fact that the currency union cannot succeed unless its members share more risk.

If they do not face up to that today, the euro, and perhaps the European Union itself, will not survive.

The Economist 11 April 2020

To the astonishment of almost everyone in the room, Angela Merkel began to cry.

the man sitting next to her, French President Nicolas Sarkozy, and the other across the table, US President Barack Obama

Das ist nicht fair.” That is not fair, the German chancellor said angrily, tears welling in her eyes. “Ich bringe mich nicht selbst um.” I am not going to commit suicide.

A cornered Ms Merkel threw the French and American criticism back in their faces. If Mr Sarkozy or Mr Obama did not like the way her government ran, they had only themselves to blame. After all, it was their allied militaries that had “imposed” the German constitution on a defeated wartime foe six decades earlier.

Peter Spiegel, Financial Times 11 May 2014

EU finance ministers struggle to break impasse between Italy and the Netherlands

Italy’s finance minister Roberto Gualtieri said his government would not accept a final report sent to EU leaders unless it explicitly mentioned debt mutualisation as a tool for the economic recovery. 

Rome also demanded that any use of loans from the European Stability Mechanism come with no conditions attached.

The Netherlands’ finance minister Wopke Hoekstra said no on both points. 

FT 8 April 2020


Since the Great Financial Crisis, the primary stock buyer has been the listed companies themselves via their stock repurchase programs.

Their net purchases dwarf all others.

CARES Act restricts buybacks from companies receiving federal loans, loan guarantees, or other assistance.

All that means buybacks will likely be scarce for a while, and stock prices may have a hard time rising unless some other large buyer appears. 

Bull markets require people willing to buy. 

Bear markets develop simply in the absence of buyers.

John Mauldin with nice chart 3 April 2020

In the eurozone, they talk much of eurobonds.

But the support that matters will have to come from the European Central Bank. 

There is no alternative. Nobody should care. There are ways to manage the consequences. 

Even “helicopter money” might well be fully justifiable in such a deep crisis.

Martin Wolf 7 April 2020


Ledare i Financial Times öppnar för Helicopter Money

Ekonomer och andra måste lägga Joakim von Anka bakom sig, skrev jag här i går.

Detta upptogs inte väl av alla. Det får man ta.

I dag kan man läsa en ledare i Financial Times som skriver:

Helicopter money is a valid tool for central bankers

Quantitative easing programmes may be here for the long term

Without limits, allowing a government to finance itself by creating money can lead to hyperinflation. But these risks can be manageable

There is no clear distinction between quantitative easing and monetary financing.

The scale of today’s downturn means even the most direct monetary financing, such as “helicopter money”, or handing cash to the public, should remain an option.

German Foreign Minister and Finance Minister called for a European response to the economic fallout of the pandemic.

"We need a clear expression of European solidarity in the corona pandemic," the high-profile German officials said in an op-ed published in several European newspapers in Italy, France, Greece and Spain.

Deutsche Welle 6 April 2020

Germany has always argued the idea would violate the “no bailout” clause in the EU treaty, which says that no EU country should be liable for the debts of other members

FT 6 April 2020

”Kerstin Hessius-gänget”

Realtids Johan Såthe frågar sig om de som vill öppna vår ekonomi igen – ”Kerstin Hessius-gänget” – verkligen har fattat att Sverige kanske är det mest öppna landet av alla?

”Människor kommer inte att börja agera ’normalt’ förrän de anser att det är säkert att göra det. Det är inget någon politiker kan bestämma, det är virusspridningen som avgör”, skriver han.



Ekonomer och andra måste lägga Joakim von Anka bakom sig

Farbror Joakim hade sina penningbingar med guldpengar. När han köpte något blev det mindre kvar. Detta är ett synsätt som många har svårt att frigöra sig ifrån.

Har vi råd med alla dessa stödåtgärder frågan sig många, alltför många. Men dom har väl inte läst vare sig Keynes eller Friedman.

"Om man har en sedelpress går man inte i konkurs", skrev jag nyligen.

Man har en sedelpress om man har en egen valuta och inte är med i EMU.

En utgift är en belastning om den medför att man inte kan göra något annat för dessa pengar. 

Underskottet i statsfinanserna är en ointressant siffra. Staten kan ge ut obligationer som Riksbanken köper. Den går inte i konkurs för den har verkligen en sedelpress.

Man skall i stället, återigen efter många år, hålla ett öga på penningmängden.

Om ett företag eller en löntagare går med förlust och detta underskott täcks av statsbidrag är penningmängden oförändrad.  

Vi måste också sluta med fiktionen att Riksbanken inte är en del av staten. 

Om staten har en skuld på 1.000 miljarder och dessa obligationer har köpts av Riksbanken tar dessa summor ut varandra.

Niema problema, säger anhängarna av Modern Monetary Theory.

To the extent modern monetary theory is true, it is unoriginal; 

to the extent it is original, it is false

The doctrine behind MMT was smart but not completely right

Faced with slow growth, political discontent, and large inherited debt burdens, monetary finance cannot be a taboo option.

 Adair Turner, a former chairman of the United Kingdom's Financial Services Authority and former member of the UK's Financial Policy Committee, is Chairman of the Institute for New Economic Thinking. 

The deficit only matters once you reach full employment, when overheated consumer demand can lead to inflation. 

But we’re nowhere near that point right now, meaning there’s plenty of room for deficits, without any possibility of default.

New Republic 11 May 2016

Monetarism på min site

Money creation in the modern economy at Peak Prosperity

Money creation in the modern economy at Bank of England pdf, QB 2014 Q1

Why the Fate of Milan Will Be the Fate of Italy

The government is deploying at least 50 billion euros ($55 billion) in economic aid, which will add to borrowings already totaling 135% of GDP, more than twice the ratio of Germany.  

That growing debt load threatens to leave Italy dependent on the European Union to maintain financial stability—and could put it at the mercy of its EU partners to keep investment flowing.

The virus crisis is unfolding just as Italy’s banks have finally gotten back on their feet after the 2008 financial crisis. 

Nice pics.

Bloomberg 4 April 2020

Furious at their plight being ignored and over resistance to coronabonds, Italians’ sense of betrayal deepens

“You have to consider my party is one of the most pro-European parties in Italy and I now have members writing to me saying: ‘Why do we want to stay in the EU? It is useless.’”

Donald Tusk, the former European Council president, who is now president of the European People’s party, the centre-right political alliance. 

“We must save Italy, Spain and the whole of Europe and not be afraid of extraordinary measures. This is a state of emergency.”

FT 6 April 2020

What Happens When Stock Buybacks DROP By 50%?

Corporate Debt Domino Effect Has Begun.

The Money GPS Youtube 5 April 2020

Skapar centralbankerna stagflation? Experter tvekar.

När världens centralbanker pumpar ut likviditet i de finansiella systemen har oroade röster pekat på risken för stagflation – att arbetslöshet och inflation lyfter samtidigt.

Med bra länkar.

Sandra Johansson omniekonomi 4 april 2020

Om Stagflation hos IntCom


Siktade Lee Harvey Oswald inte på JFK utan på John Conally?

John Connally; On November 22, 1963, he was seriously wounded while riding in President Kennedy's car in Dallas, when the president was assassinated. 

Connally does not endorse the conclusions of the Warren Commission. When asked if he believed the Warren Commission's findings he said: "Absolutely not. I do not, for one second, believe the conclusions of the Warren Commission."

Connally hade varit marinminister och därvid avslagit Lee Harvey Oswald överklagande av sitt vanhedrande avsked ur Markinkåren. 

Det var kanske Connally som Oswald siktade på och inte JFK?

Den frågan har man kunnat läsa på min website i många år.

När jag nu googlar hitta jag en artikel från 2016 om att historian and journalist James Reston Jr. has questioned whether JFK was the actual target

Reston argued in his book about the assassination, “The Accidental Victim,” that Oswald had long harbored a deep grudge against the Texas Governor; 

Oswald's attempt to defect to the Soviet Union had led to his discharge from the Marines being downgraded to undesirable and he knew that when he returned to the United States he would struggle to find work because of it. 

He appealed to Connally, then Secretary of the Navy and a fellow Texan, only to be rebuffed with a letter embossed with the Secretary’s smiling face and a campaign leaflet urging him to support his candidacy for Governor. 

This, Reston believes, was the root of Oswald’s hatred and ultimately lead him to plot the politician’s assassination.

He adds that in the testimony of Oswald’s wife, Maria, to Congress’s Select Committee on Assassinations in 1978 she categorically named Connally as the real target of the assassination, not JFK. 

Other people who knew Oswald are alleged to have corroborated this view, saying that he in fact admired JFK for his efforts to engage with the USSR.

If so, why is this theory not more widely accepted? 


James Reston Jr.’s notion that Lee Harvey Oswald’s real target was Texas Gov. John Connally was firmly rejected by Vincent Bugliosi in his definitive investigation published in 2007, “Reclaiming History.” (“Lee Harvey Oswald’s little green book shows JFK wasn’t the real target,” Opinion, Nov. 22)

Bugliosi reports that Connally wrote to Oswald that he had left his position as Navy secretary before Christmas 1961 in order to run for governor of Texas, and he was passing along Oswald’s request to his successor, Fred Korth. 


Former Secret Service Agent Bill Carter explains, "So anyway, he got kicked out of the marines, and when I saw that, who was the Secretary of the Navy who’s in charge of the Marines? John Connally was sitting in front of Kennedy."

Connally had become governor of Texas after being secretary of the Navy.



ECB should not be used to finance national borrowing, which is explicitly prohibited by its founding treaty.

To trigger the ECB’s power to buy sovereign debt under OMT, a country must first have been granted a rescue programme from the European Stability Mechanism. 

This would need a unanimous vote from all eurozone members, which gives Germany a veto.

For the distressed borrower, the conditionality this implies would be humiliating. 

Mr Draghi never had to put OMT into effect and, even now, no one wants to invoke the mechanism to support the stressed states in the pandemic.

FT 3 April 2020

Germany is the largest guarantor of the OMT

Fannie and Freddie could require bailout if lockdown lasts

The two groups.collectively underpin the $10tn US housing market..

Regulator Mark Calabria, director of the Federal Housing Finance Agency. says US mortgage guarantors have sufficient resources for about 12 weeks

“Fannie and Freddie are still in conservatorship and 
levered 240 to 1. 

FT 3 April 2020

Fannie and Freddie at IntCom

What about the hundreds of billions of dollars of Level 2 and Level 3 assets held by the biggest banks?

Complex, risky trades whose fair value is hard to determine.

These are the so-called Level 2 and Level 3 assets, the types of instruments that blew up in 2008.

Europe’s banks have hundreds of billions of euros of risky assets

Bloomberg 3 April 2020

Emerging market debt burdens may be sorely understated

It makes much less sense for a bond issued by Petrobras International Finance Company, a Cayman Island subsidiary of the Brazilian oil group, to be added to the debt statistics of the Cayman Islands.

Investors braced for credit crisis in emerging markets

Last month $31bn was sucked out of emerging-market debt funds, the biggest outflow on record since October 2008, according to the IIF. 

Analysts say the developing world as a whole is more resilient than at the onset of previous downturns, such as the Asian financial crisis of 1997-98 and the Latin American debt crisis of the 1980s. 

FT 2 April 2020

Asian financial crisis of 1997-98 

Latin American debt crisis of the 1980s

"Om man har en sedelpress går man inte i konkurs".

Hur kommer det sig att regering och riksbank i Sverige, England och USA gång på gång kan lägga fram stödpaket på mångmiljardbelopp? 

Var kommer pengarna ifrån frågar sig nog många.


Svaret är att den svenska regeringen kan alltid betala sin skulder /denominerade i kr/.

Men Grekland  och andra euroländer har sina skulder i euro och sedelpressen står i Frankfurt och kontrolleras av ECB.

Jag inbillar mig gärna att jag var en av de första som på nätet observerade att "Om man har en sedelpress går man inte i konkurs". 

Det var varit det till synes självklara budskapet på denna blogg ett antal gånger, första gången i november 2011.

Sedan kom även BBC och Soros på det.

Soros om att dom inte förstod att det var ett stort steg att avskaffa den egna sedelpressen

BBC: Greece does not have its own central bank that print money

EU och ECB kunde kväsa Grekland. Pengarna tog slut i de grekiska bankomaterna.

England kunde lämna EU eftersom Bank of England har en egen sedelpress.

Det var således viktigt att det blev Nej till svensk euroanslutning i folkomröstningen 2003.


Antibody tests will soon tell us

We will have a clear sense of how many people have already had Covid-19 and whether or not there really is an iceberg of asymptomatic cases below the visible tip. 

What if the bad scenario is avoided, but not completely?

Let us suppose that serological antibody tests show the true picture to lie somewhere between the two poles: neither enough infections to reach herd immunity thresholds (and therefore to contemplate dialing down the lockdown); nor the clarity of economic Armageddon in the necessary defence of life.

Ambrose Evans-Pritchard, Telegraph  1 April 2020

Jag tror på Mohamed

The risk that the financial system will reverse-infect the real economy and cause a depression is too big to ignore.

As for the severity and duration of the coming recession, all will depend on the success of the health-policy response

No tax rebate, low-interest loan, or cheap mortgage refinancing will convince people to resume normal economic activity if they still fear for their own health. 

Mohamed A. El-Erian Project Syndicate 26 March 2020 

De certifikat som Riksbanken köper får ha en maximal återstående löptid på upp till tre månader.

En lång rad svenska företag har gett ut certifikat, allt från storföretag som Trelleborg och Holmen till en lång rad mindre, framförallt fastighetsbolag. 

Det pressade hotellfastighetsbolaget Pandox lånar till exempel 3 miljarder kronor i ett företagscertifikatprogram.

Med längre löptid, över ett år, kallas motsvarande lån för företagsobligation.

SvD 2 april 2020

Virus Leaves Thatcher’s Children with Bigger Nightmare Than 2008

“There’s going to be government money going into all sorts of places that would have been unthinkable just weeks ago,” said Philip Hampton, former chairman of Royal Bank of Scotland Group Plc, which in 2008 received the biggest bailout of any lender in the world.

“This is obviously an exceptional time, with exceptional measures called for,” said Robert Colvile, director of the Centre for Policy Studies, the London-based think tank co-founded by the late U.K. Prime Minister Margaret Thatcher.

Commercial paper market still creaking despite Fed measures

Financing costs in the commercial paper market — typically seen as one of the safest lending markets, where companies borrow cash for periods up to one year — have soared since the coronavirus pandemic reached US shores.

FT 1 April 2020

The health system will be overwhelmed,” Mr Marks said. “There will be a point where there doesn’t seem to be an end in sight. I’m afraid the headlines are going to get much uglier in this regard.”

Market recovery will unravel as coronavirus fallout mounts, warns Oaktree’s Marks