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2021-01-22

In January 2008, as the subprime crisis unfolded, Davos buzzed with confidence

Fred Bergsten of the Peterson Institute for International Economics: “It is inconceivable — repeat, inconceivable — to get a world recession.” 

To be fair, the forum’s 54-page Global Risks Report did include two paragraphs on subprime mortgages.

Simon Kuper FT 21 January 2021

https://www.ft.com/content/a9395f9b-33de-45f6-a5ff-249d578676a7


Warnings that rising deficits will reignite inflation and undermine the dollar have proved wrong for decades, so deficit hawks are increasingly easy to mock as crotchety old scolds.

The new view, expressed by leading figures from the IMF, academia and media, is that with inflation long dead and interest rates at record lows, it would be unwise, even irresponsible, not to borrow to boost the economy. The amounts — billions, trillions — hardly matter, especially not for the US, which still has the world’s most coveted currency.


 Increasingly, the money printed by central banks goes to finance government debts. Many elites see this as fine


Instead of a path to freedom, low rates are a trap. They encourage more borrowing and rising debt, which drags productivity lower and slows growth. That makes the economy financially fragile, forcing central banks to keep rates low. Given today’s very high levels of debt, only a small increase in interest rates would make the debt burden unsustainable.


The writer, Ruchir Sharma, Morgan Stanley Investment Management’s chief global strategist, is author of ‘Ten Rules of Successful Nations’



FT 20 January 2021


https://www.ft.com/content/d49b537a-95f8-4e1a-b4b1-19f0c44d751e





Joe Biden ushers in the Keynesian inflation era of the 2020s

My conclusion: the Federal Reserve will be on the warpath much earlier than widely assumed; dollar bears will be disappointed again; and Wall Street faces a cold douche, a sharp correction before the long bull market of the Roaring Twenties gets going


Ambrose Evans-Pritchard Telegraph



https://www.telegraph.co.uk/business/2021/01/20/joe-biden-ushers-keynesian-inflation-era-2020s1/

I dag 31 december 2020 lämnar Storbritannien EU. Men ändå är det besynnerligt tyst om Nigel Farage, grundare av UKIP, UK Independence Party.

Jag har en gång varit i samma rum som Farage. Margit Gennser, senare ordförande för Medborgare mot EMU, den borgerliga kampanjorganisationen inför folkomröstningen 2003, hade via sina kontakter skickat mig till London för att delta i ett möte i en kyrksal.


Jag förväntades på tre minuter sända en hälsning från Sverige. Jag och några andra skulle vara som ett förband innan rockstjärnan skulle göra sin entré.


Nigel Farage var rockstjärnan. Jag hade då mycket dimmiga begrepp om honom och lyssnade med skräckblandad förtjusning på hans budskap.


Min insats var således mycket begränsad, men det uppvägs av att kyrkan, som kyrksalen hörde till, var Westminster Abbey.


Rolf Englund FB 31 december 2020


Do I regret supporting Trump?

Nigel Farage Youtube 20 January 2021



global stock-market rally — profits are flat since 2008

The global stock market has nearly doubled since 2008 because the multiple paid for unchanged profits has nearly doubled

https://www.marketwatch.com/story/the-incredible-backdrop-to-the-global-stock-market-rally-profits-are-flat-since-2008-11611226707



2021-01-21

“As with frogs in water that is slowly being heated to a boil, investors are being conditioned not to recognise the danger.”

Seth Klarman, the founder of hedge fund Baupost Group, has told clients central bank policies and government stimulus have convinced investors that risk “has simply vanished”, leaving the market unable to fulfil its role as a price discovery mechanism.  


“With so much stimulus being deployed, trying to figure out if the economy is in recession is like trying to assess if you had a fever after you just took a large dose of aspirin,” he wrote. 


FT 21 January 2021


https://www.ft.com/content/9c3ecb09-c4bd-4066-a462-af496725105d




2021-01-20

Frontex, The European bloc’s first uniformed armed force

Frontex is an important milestone in the bloc’s efforts to create functioning institutions that can implement its security and foreign policy objectives. The US, some European officials like to point out, had a coastguard before it had its own navy.

Critics, by contrast, see Frontex as the spearhead of a militaristic “Fortress Europe” strategy

The camera lingers first on the EU’s circle of stars insignia and then shifts to a close-up of the officer’s side cap, styled similarly to those used in the US military and French police. The man salutes in front of a logo for the armed force he represents: the Frontex European Border and Coast Guard.

FT 20 January 2021


https://www.ft.com/content/32d464ad-1efb-4b6b-ad43-427d05e01852


https://twitter.com/Frontex


Europeiska byrån för förvaltningen av det operativa samarbetet 
vid Europeiska unionens yttre gränser (FRONTEX)




10.3m users had their electricity abruptly shut off in Mexico City

Cutting off users was necessary to avoid pulling the plug on the entire national grid.

The culprit was renewable energy. Because renewable power is intermittent — sunshine and wind are not constant — and must be backed up by other sources, it puts strain on the system. 

FT 20 January 2021

https://www.ft.com/content/deafe6f1-7357-4424-8459-f46e298b65ba


Why renewables can’t save the planet Michael Shellenberger TEDxDanubia


https://www.youtube.com/watch?v=N-yALPEpV4w&feature=share&fbclid=IwAR1k3p-vdmdpYwSa4QWpfT5O302-8NHYD1XE5v3zigUxj3Sh3Y4L-MJZvuE


ECB is buying even more Italian bonds than ever before.

Through its public sector purchase program (PSPP) and pandemic emergency purchase program (PEPP) it purchased €165 billion of Italian bonds in the first eleven months of 2020, 

bringing its total holdings to €529 billion. 

Then, of course, there are the banks.


https://www.nakedcapitalism.com/2021/01/perhaps-its-time-to-start-worrying-about-italy-again.html

2021-01-19

Government-aided rebound would come in stark contrast to what happened during the 2007 to 2009 recession.

Back then, Congress’s biggest package to counter the fallout of the downturn was the $800 billion American Recovery and Reinvestment Act, passed in 2009. 

At the time, concern over the deficit helped to stem more aggressive fiscal policy responses.


But economic thinking has undergone a sea change since then.


New York Times 18 January 2021


https://www.nytimes.com/2021/01/18/business/economy/full-unemployment-fiscal-policy.html 


Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.


Rolf Englund blogg 5 december 2009


https://englundmacro.blogspot.com/2014/08/skriande-uppenbart.html

2021-01-18

Biden, Parisavtalet och Ingela Thalén

USA återansluter sig till Parisavtalet  ”Den symboliska betydelsen kan inte överskattas”. Visserligen påtar sig de deltagande länderna att verka för att hålla den globala uppvärmningen väl under 2 grader, men det finns inga sanktioner


Även under Trump har koldioxidutsläppen minskat. Det visar att det till stor del är marknadskrafterna som driver på omställningen. Kol har fasats ut med ganska stor kraft eftersom det är för dyrt.


https://www.svd.se/andrar-trumps-beslut--ansluter-till-parisavtalet




Ingela Thalén ”Det är ett löfte att det är en målsättning som vi lovar att ha som mål att arbeta för.”



https://sv.wikipedia.org/wiki/Ingela_Thalén




As a result of last year’s shock, the US is likely to exceed its 2020 targets under the Copenhagen accord to cut emissions by 17 per cent from 2005 levels



https://www.ft.com/content/1b1dfaf0-4dfb-4788-9270-f880242b2a56




Why Greece's Economy Never Recovered? (2020)

Greece’s GDP was still 25% below its pre-crisis peak, with unemployment above 20% for most of the last decade.

Greece’s no show recovery is unparalleled in modern history. Even amongst the most severe Depressions. 

Five years after the Great Depression US GDP per capita had risen by 35%, likewise after Argentina’s 2002 crisis it was up by 45%. 

https://www.youtube.com/watch?v=zn24zudsuvI&t=193s

FN-rapporten visar att den globala uppvärmningen blir ungefär 3,2 grader

Den uppvärmning som anses möjlig att hantera för vår civilisation är högst 2 grader – eller helst 1,5 grader – enligt FN:s klimatpanel IPCC.

/men det är/ i slutet av detta århundrade jämfört med förindustriell nivå, om länderna håller sig till sina nuvarande klimatlöften. 

SvT 18 januari 2021

https://www.svt.se/nyheter/fn-pandemin-blir-ett-vagskal-for-klimatet

Kommentar RE:

Den intressanta tidpunkten är om och när vi når den punkt när detta inte längre går att förhindra.

Over the last year there has been a veritable explosion of the money supply.

In the US, M2 has surged by 24pc. In the UK, M4 has increased by 12.8pc. And in the eurozone M3 has grown by 11pc.


The current monetary expansion shows itself in large increases in the bank deposits of households. Once they are in a position to spend this money, they are most assuredly going to do so.


There is no inevitable direct link between the money supply and inflation. Normally, the link operates through aggregate demand. 


Just as the monetary authorities can stoke the inflationary fires so they can also dowse them. But will they? That is a subject for another day.


Roger Bootle Telegraph 17 January 2021


https://www.telegraph.co.uk/business/2021/01/17/inflation-not-dead-thought-merely-resting/

2021-01-15

What was the best-performing asset class in 2020? US inflation-linked bonds

 If you think “tech stocks” or “bitcoin”, think again. Instead, as the Bridgewater hedge fund recently wrote to its clients, “among the more interesting and least recognised outcomes” of 2020 was that US inflation-linked bonds beat other assets by delivering a 35 per cent return, on a risk-adjusted basis, as investors hedged against inflation risks.


In recent years, most investment portfolios have been constructed on the assumption that interest rates and inflation will stay low indefinitely.


“there could be a taper tantrum”, adds Mr Dudley, referring to the 2013 market swings that occurred when Ben Bernanke, then Fed chair, gave the mildest of hints that the central bank might cut, or taper, its QE programme


Gillian Tett FT 14 January 2021



https://www.ft.com/content/d50304b4-45d3-47d8-b793-4a58a0e9fd59