Ukraine and the Houthis Are Revolutionizing Naval Warfare

Let’s start in the Black Sea. Just under two years ago, the powerful cruiser Moskva, the flagship of Russia’s Black Sea fleet, was sunk by Ukrainians using drones for targeting and cruise missiles for the knockout blow.  We should study the Ukrainians’ successful merger of US-supplied satellite intelligence, data from the sensor suites on their own long-dwell air drones, and use of special forces  Bloomberg 3 March 2024

Property Tycoon Accused of Embezzling $12 Billion in Vietnam

Twenty-four government inspectors — whose jobs are responsible for ensuring the health and safety of the banking system — are alleged to have taken Lan’s money to cover up violations. The woman behind Van Thinh Phat Group, one of Vietnam’s most moneyed real estate empires, now awaits a trial starting on March 5 — and a possible death sentence or imprisonment if found guilty. Bloomberg 3 March 2024 Defense Secretary Donald H. Rumsfeld and Vietnamese Minister of Defense Gen. Pham Van Tra participate in a ceremony officially welcoming Rumsfeld to Hanoi

Rekord på börsen i Stockholm

  Den två år långa ökenvandringen är över But is it a bubble?  The Nasdaq hit a new high on Thursday, having risen 54% since the start of last year, while the S&P 500 is up 32% But is it a bubble? There’s no single definition of a market bubble, but for me it has to involve a speculative mania.  It’s when buyers en masse cross the line from  assessing future profit potential to buying something they know is unreasonably expensive—or just don’t care about the price at all—because they think a greater fool will buy it off them at an even higher price. This seems to be missing. Sure, stocks are up a lot. But this often happens after a big fall. The point of the Nasdaq making a new high is that it’s only just passed where it was at the end of 2021, before it fell 36%.  James Mackintosh Wall Street Journal 2 March 2024

Socialdemokraterna vill att avkastningen från frysta ryska tillgångar ska användas till ammunition för Ukraina.

Enligt EU:s jurister är det inte rättsligt möjligt att använda de uppemot 300 miljarder euro som ligger frysta men för avkastningen finns ett kryphål. DI/TT 2 mars 2024 Biden Seeks Plan to Tap Russian Assets for Ukraine  

“The Fed Is Trapped and Everyone Knows It”

 We’ll start with comments on my February 10 letter, Desperately Seeking Neutral.  I talked about the Federal Reserve’s endless pursuit of the undefinable “neutral” interest rate, often using models with questionable assumptions. It’s no wonder that economics is voodoo science based on complex math models that lack any firm, objectively set parameter values for its modeled variables. Then, too, does anyone really believe the Fed would raise rates as the ‘24 election approaches? Instead, the Fed will be inclined to support the Administration that selected the Fed’s members by lowering rates. How do Fed lower rates when PCE is still close to 3%, the economy is doing better than most expected, the markets literally seem to be making highs almost every other week, and unemployment is under 4%? The Fed rate didn’t actually exceed inflation until about March of last year. So, for all the wailing, sack cloth, and gnashing of teeth, the economy has only been paying a real interest rate for 10

EU fiscal rules are about to restart.

Recession is unavoidable.  France and Germany take a leading role the action. Mish 29 February 2024 The EU has averted disaster with a reform of the Stability and Growth Pact, but the new regime still contains some of the old one’s flaws Bloomberg editorial 3 januari 2024

New York Community Bancorp dropped 23% ,

 after more signs of trouble at that lender and a smaller peer revived fears about the stability of the sector a year after a string of high-profile failures.  Now waves of commercial real-estate loans are set to come due, threatening to put more pressure on the smaller banks that hold high concentrations of them.  NYCB shares traded below $4 a piece on Friday, down from around $10 earlier this year. Wall Street Journal 1 March 2024 Moody’s cuts New York Community Bancorp’s credit rating to junk

Both narratives ignore the real reason for the border crisis:

  a hypocritical immigration system that refuses to acknowledge the U.S. economy’s persistent need for lower-skilled labor.  The rise in illegal immigration is mainly driven by unprecedented labor demand and the absence of legal channels to accommodate it.  Tougher enforcement at the border is no solution to this mismatch. In fact, it is a big part of the problem. Ronald Reagan’s Immigration Reform and Control Act of 1986 was the last major bipartisan immigration reform.  It provided amnesty to 2.7 million undocumented, mostly Mexican migrants. But it also fired the opening shot for increasing border surveillance and introduced sanctions for employers hiring undocumented workers. Wall Street Journal 1 March 2024

18 of the world’s best metro systems

  CNN 1 March 2024 The world’s best subways: How these metro networks keep cities on the move | CNN

Den två år långa ökenvandringen är över

På fredagen nådde Stockholmsbörsens storbolagsindex OMXS30 nämligen ett nytt intradags-rekord, och den högsta nivån sedan januari 2022.  DI 1 mars 2024 A golden age for stockmarkets is drawing to a close Share prices may be surging, but even AI is unlikely to drive a repeat of the past decade’s performance Stockmarkets tend to rise gradually; recently they have soared.  American stocks are up by 21% since the end of October and stand roughly 5% above their vertiginous peak in January 2022.  One conclusion might be that a bubble is waiting to pop, valuations Yet there are also reasons to see markets’ exuberance as rational. The economy continues to defy gravity.  Nvidia Businesses talk non-stop about generative ai but it remains at the experimental stage.  As a result, even if ai is destined to transform societies utterly, today’s investors may struggle to pick which companies will make money.  The Economist 29 Feb

Eurozone consumer prices rose 2.6% from a year ago

  The data come just days before the ECB next sets borrowing costs, with economists predicting the deposit rate will be left at 4% for a fourth meeting.  Officials are converging around a first reduction in June Bloomberg 1 March 2024 Euro-Area Prices Slow Less Than Expected Bloomberg 1 February 2024

Macron sees Scholz as a leader without courage and ambition

who cannot think beyond the short term In Berlin, Macron is seen as a monarchical figure who is better at issuing grand visions than delivering. a turning point in their relationship was when Scholz suggested in 2018 that France should give up its permanent seat on the United Nations Security Council in favor of a seat for the EU. Bloomberg 1 March 2024

Biden Seeks Plan to Tap Russian Assets for Ukraine

US president wants to see progress by the June G-7 Summit The allies all concur that the funds should remain off-limits from Russia unless it pledges to help with Ukraine’s reconstruction, but they’re at odds over whether it would be lawful to seize them outright.  France and Germany, along with the European Central Bank, have so far resisted taking any path that would lead to the funds being seized. Treasury Secretary Janet Yellen and others have downplayed most of those concerns.  The UK and Canada are also in favor of seizing the assets One challenge is that the vast majority of the funds are in Europe, mostly held through the Belgium-based clearing house Euroclear, and any agreement will need the backing of all G-7 nations.  Another challenge is finding an option deemed by all allies to be legally sound  On Wednesday, European Commission President Ursula von der Leyen suggested using those proceeds to fund weapons for Ukraine. Bloomberg 29 februari 2024

Mattias Svensson: Europa går mot en ny vår

Redan i början av februari fattade EU-parlamentet ett viktigt beslut om att nästa generations genmodifierade livsmedel inte ska regleras lika hårt som de tidigare. SvD 28 februari 2024 Leaders should consider using frozen Russian assets to bolster Ukraine’s military, EU’s von der Leyen says

Real Fed rate


Fed’s Preferred Inflation Metric Increases by Most in a Year

 Core PCE gauge climbed 0.4% in January and 2.8% from year ago Bloomberg 29 februari 2024

Det finns en myt om att att ekonomer alltid är oense

Men så är det inte. Tvärtom är ekonomkåren ett snarast övertydligt exempel på att människan är ett flockdjur. Detta är en förklaring, men ingen ursäkt, för de flesta ekonomers vana att byta uppfattning samtidigt. De flesta av oss minns hur så gott som alla svenska ekonomer slöt upp bakom Bildt-regeringens försök, uppbackade av Ingvar Carlssons och Mona Sahlins socialdemokrater, att försvara den fasta växelkursen. När det sedan ledde fram ett spektakulärt misslyckande trädde en ny Riksbanksledning till, efter det att Bengt Dennis avtackats med blommor och blivit konsult hos SEB.  Då bytte alla ekonomer uppfattning och kunde svära på att fast växelkurs var helt fel och att det nu gällde att ha ett inflationsmål. Det var den bästa lösningen, sade ekonomerna minst lika enhälligt som de tidigare sagt att fast växelkurs var roten till allt gott. Riksbanken har alltså nu ett inflationsmål. Samma sak gäller för den Europeiska Centralbanken, ECB, som styr räntan inom hela EMU-området. Samma rän

Banks Are Back Into Credit Derivatives

Barclays struck a $1.1 billion deal with Blackstone this week to offload risks in its US credit-card business  It is part of a growing trend of risk-transfer deals mainly by European banks to shore up their balance sheets and capital ratios. The total volume of such deals hit nearly €200 billion ($215 billion) in 2022 They’re known as capital relief trades, or synthetic (or significant) risk transfers and they are likely to become more popular as lenders adjust to tougher banking regulations  These deals are mostly private and bilateral, so they aren’t easy to track. Barclays and Deutsche Bank are unusual in talking about them publicly at all.  The whole idea of anything synthetic, private, complicated and involving derivatives of credit risk still has a bad name from the crisis of 2008.  Paul J. Davies Bloomberg 29 februari 2024 U.K.-based Barings merchant bank, established in

LO/SAP och Moderaterna och Wallenberg hade således ett gemensamt intresse av att hålla Riksbankens växlingsstuga öppen

 till Arbetarrörelsen och Wallenbergssfären hade hunnit växla in sina utlandslån. Jag forskade en del i detta för många år sedan och då blev min bild att Stig Malm dragit med LO, Folksam, BPA och kanske andra delar av Arbetarrörelsens rörelsedrivande, om uttrycket tillåts, delar.  Därmed hotades inte bara dåvarande SE-Banken och Wallenbergssfären av konkurs om kronan tilläts flyta. LO/SAP och Moderaterna och Wallenberg hade således ett gemensamt intresse av att hålla Riksbankens växlingsstuga öppen till Arbetarrörelsen och Wallenbergssfären hade hunnit växla in sina utlandslån. Det var också detta intervenerande, att man stödköpte kronor, som enligt Hans Tson Söderström soch Nils Lundgrens bok "Ekonomisk Politik. En vänbok till Assar Lindbeck" (SNS Förlag 1995) blev den del av kronförsvaret som kostade skattebetalarna mest, frånsett de svårberäknade följderna för hela samhällsekonomin. I  ingår ett kapitel "Kronförsvaret hösten 1992 - var det värt sitt pris?" I sin

The US and European allies determined to use frozen Russian assets to help Ukraine – somehow

In Brazil this week, they’re arguing about the best way to do it without getting into legal or financial jeopardy. Western nations have frozen about €260 billion ($282 billion) in securities and cash, more than two-thirds of it in the European Union.  They all agree those funds should remain off-limits from Russia unless it pledges to help with Ukraine’s reconstruction.  But they’re at odds over whether it’s lawful to cross the Rubicon by seizing the assets outright France and Germany, along with the European Central Bank, have expressed the most caution.  They worry about Russian retaliation targeting European assets there, and also the impact on financial stability and the euro’s status as a reserve currency, according to people familiar with the matter.  The danger, it’s argued, is that such a drastic move would set a precedent – pushing other nations to avoid holding their reserves in Western currencies in case they’re one day subject to similar penalties. Bloomberg 28 February 202

Biden State of the Union address next week, it’s possible that the government could be partially shut down

When President Joe Biden convenes a joint session of Congress, his Cabinet, military leaders and Supreme Court justices for his highly anticipated State of the Union address next week, it’s possible that the government could be partially shut down   A two-step plan passed in January extended funding through March 1 for parts of the federal government The rest of the government – anything not covered by the first step – is funded through March 8. If Congress fails to pass a spending measure, Biden would deliver his address as about 20% of the federal government has run out of money  CNN 28 February 2024

Sedan pandemiutbrottet har OMXS30 rusat med nästan 30 procent

En viktig orsak till uppgången är bolagens prishöjningar och stigande rörelsemarginaler.  DI 28 februari 2024  

The U.S. trade deficit in goods widened to $90 billion in January

Economists  were looking for the deficit to narrow. Exports of goods rose $400 million to $170 billion Imports rose $2.7 billion to $260 billion. MarketWatch 28 February 2024 U.S. trade deficit in 2023

The plans and intentions of Ukraine’s Western allies are so vague

 Are the US, EU and UK offering Ukraine limited aid to defend its territory (as they seem to be actually doing) or are they indeed waging a proxy war to “defeat” Putin’s Russia (as they seem to be saying)? Just as the Kremlin is doing, Ukraine’s Western allies are signaling their resolve to “defeat” Russia without actually articulating what that defeat means. Over the last year, Ukraine’s stated goal of victory — recapturing all the occupied Ukrainian territories, including Crimea, under Russian control for nearly a decade now — looks increasingly unrealistic. It’s one thing to push Russian forces back to their positions before February 24, 2024 — however difficult that may be two years into the war — but it’s quite another to dislodge de facto Russian administrations from territories in Donetsk, Luhansk and Crimea that they have occupied for a decade. But Ukraine’s Western allies are failing to reckon with these realities and, amid growing reluctance by right-wing parties in the US an

Alecta kapar värdet på sitt innehav i Heimstaden Bostad med 12,7 miljarder kronor för 2023, 25 procent

Därmed exploderar pensionssmällen, och storägarna i bostadsbolaget redovisar helt olika värden på sina innehav. Heimstaden Bostad är ett av Europas största bostadsbolag och Alectas största enskilda innehav.  Totalt har Alecta, Folksam och Pensionsmyndigheten investerat drygt 70 miljarder kronor i bostadsjätten. Investeringarna har lett till att Finansinspektionen, FI, inlett undersökningar mot Alecta, Folksam och Pensionsmyndigheten om gällande bestämmelser har följts i samband med deras investeringar.  Parallellt med FI:s undersökningar pågår även en brottsutredning vid Riksenheten mot korruption. Den gäller specifikt Alectas investeringar i Heimstaden Bostad, och brottsmisstankarna är grovt givande av muta, grovt tagande av muta och grov trolöshet mot huvudman. DI 28 februari 2024 Ivar Tollefsens ägarbolag Heimstaden AB där Fredrik Reinfeldt sitter i styrelsen https://englundmacro.blogspot.c

Ny miljardförlust för Rutger Arnhults ägarbolag M2

 Redovisar en ny miljardförlust under det fjärde kvartalet. Jämfört med samma period året före syns dock en klar förbättring. De totala värdeförändringarna i fastighetsbeståndet uppgick till minus 239 Mkr vilket kan jämföras med minus 225 Mkr under jämförelsekvartalet. Resultatet före skatt landade på minus 1.870 Mkr en förbättring från minus 7.598 Mkr under det fjärde kvartalet 2022. DI 28 februari 2024 Balder har enligt Erik Selin rörlig ränta, eller kort bindningstid, på skulder på 50 till 60 miljarder kronor. Rutger Arnhult säljer merparten av sitt ägande i fastighetsbolaget Castellum till Roger Akelius. Rutger Arnhults ägarbolag M2 har 18,5 miljarder kronor i lån  I M2 finns en salig blandning med bolag där Castellum och Corem är dominerande. Att både

Office prices still need to drop 50% for housing conversion projects to work, says Goldman

Even prices in hard-hit areas such as San Francisco, Boston, Los Angeles and Seattle need to fall at least 30% more, new study finds MarketWatch 27 February 2024 Cre is a Black Swan

U.S. stocks in a bubble? No

Bild An infamous example was the South Sea Bubble in 1720.  Newton reversed course and ploughed his proceeds back in. He doubled down, converting his government bonds into even more South Sea Company stock. Unfortunately, the bubble burst in the autumn of 1720, wiping out the ageing Newton’s savings. The lesson for diagnosing a bubble It seems all so much easier with hindsight: looking back, we can all enjoy a laugh Tim Harford FT 12 January 2018 ulip05 From 1792BC onwards What Triggered the Crash? - Hussman  When the time comes to ask the question – “What triggered the crash?” – remember that this is the least important question. A market crash requires nothing more than a shift in investor psychology from careless speculation to ev

There’s never been a lag between changes in monetary policy and actual impact quite like this one

Tighter money still isn’t slowing the US economy because: Money supply is growing Companies are paying less in interest thanks to cheap fixed rates Disinflation is stimulating the economy. US house prices survived 8% mortgage rates, so less pressure for lower fed funds rates The dramatic rise in interest rates engineered by the Federal Reserve has, to date, had little discernible impact on economic growth or employment. Working out just why this has happened now becomes critical both for the Fed and investors as they try to navigate a course through the post-Covid world. Tim Congdon, a former adviser to Margaret Thatcher and now head of the Institute of International Monetary Research, points out that by M3, December saw an increase of almost 0.6% (an annualized rate of 7.2%). His suggestion is that the federal government is funding its deficit by borrowing from banks, which has the effect of increasing money in circulation. Another issue is that the Fed’s long wait created far too gen

Everywhere you look, stockmarkets are breaking records

If the boom has a home, it is America. For as long as stockmarkets have existed there have been those predicting an imminent crash. Jordan Brooks has concluded that “a repeat of the past decade’s equity market performance would require a heroic set of assumptions.” That is, in part, because valuations are already at eye-popping levels. The battle against inflation is also not yet won: interest rates may not fall as far or as fast as investors expect.  In recent decades you would have been foolish to bet against stockmarkets, and timing a downturn is almost impossible. But the corporate world is about to face an almighty test. The Economist 25 February 2024 Armageddonists

US Home prices hit a new all-time high

Housing market saw above-average price gains despite rising cost of mortgage financing, Case-Shiller says The FHA also noted that the housing market has experienced annual home price growth every quarter since the start of 2012. The median price of a resale home was $382,600 in December 2023, and a newly built home was $413,200. MarketWatch 27 February 2024 US households still sitting on excess savings equal to 4 percent of GDP plenty of spending power. New York Times 26 February 2024 Why the bulls are running and the consumers are buying

Biden’s Boast: The Supreme Court ‘Didn’t Stop Me’

 The President ignores the law again as he forgives more student debt. The total is now $138 billion and counting. American Presidents may not like Supreme Court decisions, but most since Andrew Jackson haven’t bragged about defying its rulings. Not even Donald Trump.  Then there’s President Biden, who, while canceling more student debt this week, boasted about ignoring the Supreme Court’s landmark 2023 ruling that his previous loan forgiveness plan was illegal. Wall Street Journal Editorial 23 February 2024 Special Counsel Questioning Biden Mental Acuity

Yellen endorsement of using frozen Russian assets to fund Ukraine’s war effort

She did mention there’s an alternative notion afoot: using those frozen Russian assets as collateral for borrowing.  It’s an idea pushed by Belgium.  According to RSM chief economist Joe Brusuelas, it would be the alternative that renowned economist John Maynard Keynes would’ve taken. Keynes, who in 1946 met his long-term forecast of dying, is obviously no longer around for consultation.  But Brusuelas noted that Keynes was tasked with helping to resolve the global financial crisis when the Bank of England lost two-thirds of its gold reserves in a week due to the outbreak of World War I. Keynes, noted Brusuelas, correctly predicted that the harsh conditions imposed on Germany after World War I would reverberate. Keynes would almost certainly be against the outright confiscation of Russian reserves or significant wartime reparations designed to cripple the Russian postwar economy,” he said.  “One of the major lessons learned during the 20th century was that the unrestricted confiscation

Kristersson: ”Norden har för första gången på 500 år ett gemensamt försvar” Därför firar Sverige 6 juni 500 år efter Gustav Vasa Drottning Margarethe var dotter till Valdemar Atterdag, han som brandskattade Visby. På tisdag har det gått ett halvt årtusende sedan Gustav Vasa blev kung och började bygga nationalstaten Sverige. ( Det vankas jubileum i historielöshetens land. Sverige fyller 500 år – men det storslagna firandet uteblir

Hushållens skuldberg krympte med 7 miljarder till 2.910 miljarder

Bostadspriserna står fortfarande högre än i början av 2020.  Nils Åkesson DI 27 februari 2024

Heimstaden Bostad vänder från vinst till mångmiljardförlust.

Dessutom slopas utdelningen samtidigt som räntebetalningar på hybridobligationer skjuts upp. DI 27 februari 2024 Heimstaden Bostads huvudägare Alecta, Folksam och Ivar Tollefsens ägarbolag Heimstaden AB Ivar Tollefsens ägarbolag Heimstaden AB där Fredrik Reinfeldt sitter i styrelsen

Slow-Motion Property Crash in Germany

A Slow-Motion Property Crash in Germany Is a Bigger Threat to Banks Than US CRE A long-term view of property values has shielded banks so far  “Also, it’s not like they’re holding worthless paper like back in 2008, there are buildings behind these loans.” The value of those properties, however, remains the subject of much debate as the gap widens between the prices buyers are willing to pay and those sellers need so they can repay their loans. German property values are particularly vulnerable to higher borrowing costs because capitalization rates — or the potential return on a real estate investment — were pushed lower there than in other markets during the cheap money era.  That reflected in part the fact that yields on German government bonds, a benchmark for investors, were negative at the time. Bloomberg 27 februari 2024 Deutsche Pfandbriefbank Too Small to Survive,

ECB is facing tougher challenges than the US Federal Reserve,

 ... according to Governing Council member Yannis Stournaras, who sees a first rate cut in June. “The ECB has to deal with more difficult problems than the Fed,” the Greek central bank chief said Monday, citing fragmentation in the euro area’s banking system and the legacy of the region’s sovereign debt crisis. Bloomberg 26 February 2024 ECB Warns Banks of Consequences for Poor Property Risk Management

Dollar Strength Is Looking Like a New Normal

The US currency is benefitting from an America First economy, rates and stocks, and even Trump uncertainty. Until the election is over and the Fed has started cutting, expect continuing dollar strength ALSO: Read Warren Buffett’s latest letter to shareholders! To deal with the risk of a bubble, hold on to good long-term stocks and keep a pile of cash, just like Buffett John Authers Bloomberg 26 February 2024  

Fastator Update 26 februari 2024, 13:50

Snaran dras nu åt om politikernas och Joachim Kuylenstiernas fastighetsbolag Fastator.  Bokslutet var en katastrof, revisorn har inte granskat rapporten och i vår förfaller stora obligationslån. Tidigare version Fastator Björn Rosengren och Carl Bildt

Fastator Björn Rosengren och Carl Bildt

Fastator redovisar en förlust på 562 miljoner kronor för det fjärde kvartalet. ”Jag ska inte hymla med att det har varit ett tufft kvartal för Fastator på flera plan”, skriver tillförordnande vd:n Björn Rosengren, som tog över efter Joachim Kuylenstierna i december, Vid utgången av året hade bolaget räntebärande skulder på närmare 2,3 miljarder kronor. Den stora skuldsättningen är en stark orsak till att Fastators aktie har sjunkit med 84 procent de senaste tolv månaderna. ”Jag är ödmjuk ...  skriver Björn Rosengren. Victor Hultgren DI 26 februari 2024 Joachim Kuylenstierna har själv anklagats för att uppmuntra penningtvätt och lämnat posten som vd i bolaget, där de tidigare politikerna Carl Bildt och Björn Rosengren verkar i styrelsen.  Gabriel Mellqvist DI 21 februari 2024 Grundare är Joachim Kuylenstierna