Ivestment gains since early 2017 have been completely dominated by Apple, Microsoft, Amazon, Alphabet GOOG and Facebook

Here’s what the Wilshire 5000, a market-capitalization-weighted gauge of all U.S. stocks, has done since January 2017, minus the Giant 5.

MarketWatch 13 July 2020

Kommentar av Englund:
Knapptryckarna i Stockholm brukar nära följa kurserna i New York.
Men Sverige har ju inte Apple och dom andra giganterna.

Dow

John Hussman On FAANGs

This financial system is light years away from the postwar model, where banks borrowed from retail depositors and lent to individuals and companies.

The chief source of funds is not deposits but repurchase agreements or repos, a form of borrowing that has to be backed by collateral in the form of “safe” assets such as government bonds.

About Capital Wars: The Rise of Global Liquidity, by Michael Howell

John Plender FT 13 July 2020

King Arthur’s Knights

https://kingarthursknights.com/


Prins Valiant

Anders Borg, Barbro Hedvall och Göran Persson

 Sverige mötte alla tiders finanskris 2008 och klarade sig tack vare en erfaren och bestämd styrman, finansministern. Då hette han Anders Borg

Hans läge var också betydligt bättre än föregångarnas hade varit. Budgetsaneringen, som bär Göran Perssons märke, hade gjort Sverige starkare.

Barbro Hedvall DN 9 juli 2020

Göran Persson om 90-talet: Vi gjorde mycket fel, naturligtvis. 

Kanske borde vi ha sparat lite mindre.

SvD 7 maj 2017

Löntagarfonder i Socialistisk Politiks textarkiv

http://arkiv.rodarummet.org/series/lontagarfonder/

The leveraging of America: how companies became addicted to debt

FT Series The new social contract

The Federal Reserve pledged in April to buy trillions of dollars of debt, much of it owed by the corporate sector.

This is the second time in just over a decade that the Fed has mobilised the full force of its balance sheet to put a floor under creaking credit markets.

FT 10 July 2020

Det fria näringslivets försvarare: Timbros tidiga historia

I början av 1960-talet lades Byrån för ekonomisk information ned i samband med att den drivande Tore Sellberg slutade. I stället satsade Fonden tillsammans med ett antal företag knutna till Wallenberggruppen på det som med tiden fick namnet Utredningsbyrån för samhällsfrågor.

Rikard Westerberg Smedjan 8 oktober 2018

BBVA sold a 1 billion-euro additional tier-1 perpetual note CoCos

CoCos are popular because they pay more interest than other debt, in exchange for investors being at the front of the queue to bear losses if the bank fails.

In this case the coupon was 6%.

Bloomberg 9 July 2020


Cocos on my website

Jankowski’s All Against All and Robert Gerwarth’s November 1918

are two of the most stimulating histories of the interwar period to have been published in recent years.

Because we know that the period ended in the most destructive war in history, it is tempting to conclude that this outcome was foreordained in events 10 or 20 years earlier. 

Such determinism often comes with an assumption that there was something inevitable about the collapse of Germany’s democratic Weimar Republic

Tony Barber, Europe Editor of the Financial Times, 8 July 2020

Heinrich Brüning Popular mythology in Germany has it that the Weimar hyperinflation of 1922-23 led directly to the rise of Hitler. 

This is not true.

Europe's great stimulus plan is little more than political theatre

The IMF has slashed its forecast for 2020 yet again to -12.2pc for France, and -12.5pc for Italy and Spain

Gita Gopinath, the IMF’s Indian chief economist, drew up these figures after the outlines of the EU’s Next Generation Recovery Plan were already known, so clearly she does not believe the "game-changer" rhetoric.

Ambrose Evans-Pritchard 8 July 2020

Expend and pretend - Banks need to prepare now for Covid-19 losses later

Many European banks adopted an “extend and pretend” approach, and even before coronavirus were still suffering depressed valuations.

FT 8 July 2020

In the time-honored tradition of lenders everywhere, we extend and pretend.

Give them more time, hoping things improve and they can repay later.

Banks call it a wise strategy. Skeptics call it "extend and pretend."

Wall Street Journal, 7 July 2010

What if water shortages destabilise China?

The painfully unequal distribution of water in China reawakens intra-regional resentments not seen in decades. 

An imagined scenario from 2050

The Economist 4 July 2020

Italy’s 10-year bond yields are now higher than Greece’s — not exactly a sign of confidence from investors.

The European Union’s political leaders will meet next week to negotiate the details of their joint fiscal response to the Covid-19 crisis.

The Netherlands has emerged as the main villain opposing the plan

Bloomberg 7 July 2020

Robert J. Shiller explains the pandemic stock market and why it’s decoupled from the economy

Possible explanations based on crowd psychology, the virality of ideas, and the dynamics of narrative epidemics.

After all, stock-market movements are driven largely by investors’ assessments of other investors’ evolving reaction to the news, rather than the news itself.

MarketWatch July 7, 2020 

Shiller on my site

Chart Wall Street 2015-2020

They’re reverting to their only playbook -- the past. It’s a technique that showed its age in March, when the fastest plunge ever turned into the quickest 50-day advance in nine decades, a rally those with a historical bent said was doomed.

Now, with momentum back, history supposedly shows the gains are here to stay.

Bloomberg 7 July 2020

Larry Kudlow, Krugman about

Larry Kudlow is, of course, the chairman of the National Economic Council, in effect Trump’s chief economist. He’s also famous among those who follow such things for his remarkable track record of being wrong about everything, from his dismissal of those warning about a housing bubble as “bubbleheads” to his declaration a few months ago that the coronavirus was completely contained and wouldn’t inflict any economic damage.

Now, all of us get things wrong sometimes. But Kudlow is in a class of his own; as New York magazine’s Jonathan Chait memorably put it, he “has elevated flamboyant wrongness to a kind of performance art.”  And he’s also notable because his solution to all problems is the same: cut taxes on rich people and corporations. Paul Krugman NYT 7 July 2020

Olivier Blanchard, former chief economist at the IMF and doyen of the global Keynesians.

Ambrose 7 July 2020

Keynesian dogma has become something close to a secular religion in popular economic-policy debates. But...

Riktiga karlar är inte rädda för lite inflation

“Stocks are [behaving] very much like that rebound in 1929

where there is absolute conviction that the virus will be under control and that massive monetary and fiscal stimuli will reinvigorate the economy,” he said, adding that the market could drop as much as 40% over the next year.

 A. Gary Shilling again delivering a gloomy take on what’s next in a recent CNBC interview.

MarketWatch 6 July 2020

- I am convinced that the housing bubble is gigantic and will burst before long with massive implications here and abroad. In fact, it's the key to the global economic outlook.

Det skrev Gary Shilling den 17 november 2006.

1929 with good charts

Caveat. Ära vare Gud i höjden. Detta har jag gjort i slöjden.

When things cannot go on forever, they stop. And so it is with China’s support of the US dollar.

Foreigners sold more than $500bn of US government bonds during the second quarter, and perhaps one-third of that was unloaded by Chinese entities. The trend is worth watching.

Ever since 2001, when China was allowed unfettered entry into the World Trade Organization, the country has played a huge behind-the-scenes role in pushing up the value of the US currency and suppressing US bond yields.

FT 7 July 2020

“Stein’s law” If something cannot go on forever, it will stop.

Englund 2017 med länk till 2001

Departing eurogroup chief warns against post-pandemic rush to reinstate fiscal limits

Brussels took the unprecedented move to suspend the application of its “stability and growth pact” at the onset of the crisis, a move designed to avoid punishing countries for their stimulus efforts. 

But the slow return to normality has revived calls for a fundamental rethink of the rules which have been a source of constant tension between Brussels and eurozone capitals in recent years.

FT 7 July  2020

A big step towards fiscal federalism in Europe

When the euro was born everyone knew that sooner or later a crisis would occur.

It was also clear that the stability and growth pact was – as I have said before – “stupid”

Romano Prodi FT May 20 2010

Den sköraste tråden: ett fallfärdigt Italien

Rolf Gustavsson SvD 6 juli 2020

Nicholas Nassim Taleb, The Black Swan Mauldin

We knew pandemics happen and can have big consequences. No one knew in 2019 one was coming in 2020. It was what my friend Nassim Taleb called a “Black Swan” in his 2007 book with that title.

(That book, along with Antifragile, are his two best. You only need to read the first half of Antifragile to get the point, making it a short but very important read.)

Let's look at 1987, 1998, and 2000 [and now 2008]. Each period had rather solid US economies preceding them. All had rather significant disruptions. And each one saw the Fed open the liquidity flood gates.

John Mauldin 3 July 2020

Taleb Black Swan på min site

Households across the world have been saving up since the coronavirus

Tim Congdon, an economist who tracks money supply figures, said the growth in deposits in the US and around the world had been “unprecedented in modern peacetime history”. 

He warned that at some point, such moves would lead to “a significant uptick in inflation”

FT 5 July 2020

In a democracy, people are not just consumers, workers, business owners, savers or investors. We are citizens.

In today’s world, citizenship needs to have three aspects: 
loyalty to democratic political and legal institutions and the values of open debate and mutual tolerance that underpin them; 
concern for the ability of all fellow citizens to lead a fulfilled life; and the wish to create an economy that allows the citizens and their institutions to flourish.

Martin Wolf FT 6 July 2020

medborgare.englund@gmail.com

Medborgare mot EMU