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Société Générale strategist, and well known permabear, Albert Edwards warns

that the past few sessions of falling prices seen in high-yield bonds and stocks of highly indebted companies could suggest excessive leverage might be “the key area of vulnerability that could bring down the inflated pyramid scheme that the central banks have created.”

MarketWatch 16 November 2017

Rethinking Macroeconomic Policy “We’ve learned over the past 10 years that fiscal policy can have pretty powerful effects in deep recessions

Under these circumstances, there is a strong case for loosening fiscal policy and borrowing more. This is especially true for policies that put money directly into the hands of people who will spend it quickly and counteract sluggish demand, and for investments that have long-term benefits.

“Economies do not self-stabilise,” said Olivier Blanchard, at a conference on macroeconomic policy, on lessons of the financial crisis for monetary and fiscal policy. Rethinking Macroeconomic Policy, Conference 

Coordinators: Olivier Blanchard and Lawrence H. Summers.

Själv brukar jag med en dåres envishet upprepa följande ord, första gången den 5 december 2009
Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.


“The blunt truth is there is a single monetary policy, but there is not a monetary union,” Mr Tucker said.

There is the money that Mario [Draghi, ECB president] issues, the notes. But these are inconvenient to carry about. 

Most of the money we use are deposits held in 19 national banking systems.

Claire Jones, FT 13 November 2017


Gordon Brown räddade England och världen

Som premiärminister ledde han G20-mötet som kan ha räddat världen undan en depression under finanskrisen.

Dessförinnan hade han som finansminister stoppat Tony Blairs försök att föra in Storbritannien i euron. 

Som Grekland visar är det svårt att lämna euron. 

Utan Brown inget Brexit. Utan Brexit inget självständigt Storbritannien. 

Marschen mot ett Europas Förenta Stater hade varit mycket svår att stoppa.

Hans efterträdare David Cameron utlyste en folkomröstning om självständighet för Skottland, en omröstning han höll på att förlora. Gordon Brown, från Skottland, var viktig för att detta med nöd och näppe förhindrades.

Heder åt Gordon Brown.

Läs om hans memoarer här


The job of a normal central bank faced with this situation is to be the lender of last resort. But ECB...

But the ECB was deliberately constructed to be different from normal central banks. 

One of the most striking moments in the euro crisis saga was when European elites forced Silvio Berlusconi to leave office in favour of unelected Mario Monti. This was possible because Italy is a member of the euro area, and is therefore uniquely vulnerable to capital flight and bank runs.

Spaniards have good reason to hold euros in bank deposits and euro-denominated bonds as their safe asset, but have literally no reason to hold Spanish bank deposits or Spanish government bonds. 

At any moment, euro-area creditors could decide they no longer wish to finance a country’s banks and its government.

This arrangement is inherently unstable.

Matthew C Klein, FT Alphaville 9 November 2017

The Asian financial crisis

Local banks and non-financial companies ended up borrowing dollars and yen short-term to fund real estate bubbles and acquisitions.

Matthew C Klein, FT Alphaville 8 November 2017

The institutional changes recommended by euro-area elites will likely exacerbate global imbalances.

One of the interesting ideas we discussed was the “re-nationalisation of fiscal policy”. 

In exchange for accepting German plans for a European Monetary Fund, which would only provide emergency lending after private creditors are forced to take large losses, elected governments would have more freedom to tax and spend. 

Treaty-based deficit rules would be replaced by market discipline.

Matthew C Klein, FT Alphaville 8 November 2017


The Fangs

The Fangs have delivered spectacularly in the past couple of years. 

Originally named for the initials of Facebook, Amazon, Netflix and Google, and now typically also including Apple and Microsoft

John Authers, FT 8 November 2017

Apple closes above $900 billion milestone in climb to $1 trillion market cap

Apple could also hasten the drive to $1 trillion by buying back shares as it has actively done in the past, as it continues to issue bonds to fund buybacks and dividends.

MarketWatch 8 November 2017

The good news is that the Fangs are not overvalued relative to the market. 

The bad news is that the entire market is overvalued. 

Research from the Boston-based fund manager GMO.

John Authers, FT 10 November 2017


Adults in the Room Yanis Varoufakis,

Adults in the Room
Yanis Varoufakis, the colourful former Greek finance minister,
who bears the scars of his country’s bruising scrap with the EU over its debt crisis.
David Davis is currently reading his account of those talks, Adults in the Room, a searing indictment of the anti-democratic, underhand and downright mendacious tactics used by what Varoufakis calls the EU’s “deep establishment” to make the Greeks grovel. 

“Brussels is a democracy-free zone,” he wrote. “It is the nature of the beast to treat the will of electorates as a nuisance that must be, somehow, negated.”