Visar inlägg från mars, 2018

US Treasury safe haven?

US Treasury yields slip as investors flock to safe havens CNBC 28  March 2018 US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941. Niall Ferguson, FT February 10 2010

Fokus har allt för mycket har legat på att förtäta befintlig storstadsbebyggelse

i ett läge där egentligen stora nya stadsdelar behövs. Det handlar enligt /Swedbanks chefsekonom/ Anna Breman om att klara en folkökning på ytterligare en miljon inom åtta år. Swedbanks chefsekonom Anna Breman SvD 28 mars 2018
Economists may warn that the combination of Trump’s protectionism, big tax cuts, and uncontrolled government borrowing,  coming at a time when the US economy is already near full employment, will ultimately fuel inflationary pressure.  This rule of thumb implies 30-year rates in the 4-5% range. But financial markets simply do not believe this message. Anatole Kaletskys Project Syndicate 27 March 2018

Hong Kong is fast emerging as a test case of the global tightening cycle

Forced to import the monetary policy of the US Federal Reserve – nolens volens – as a result of its long-standing exchange link to the US dollar. Victim of the "Impossible Trinity”: you cannot control the currency, and monetary policy, and have open capital flows.  In times of stress, one must give. Ambrose Evans-Pritchard Telegraph 26 March 2018

Battle of Vienna

The overall command was held by the senior leader, the King of Poland, John III Sobieski, who led the relief forces. Historians suggest the battle marked the turning point in the Ottoman–Habsburg wars, a 300-year struggle between the Holy Roman and Ottoman Empires. Man bör även komma ihåg att det var den polske generalen Pilsudski som stoppade Röda armén utanför Warzawa 1920. Read more here

S&P Selloff. About time

MarketWatch 26 March 2018 Bloomberg 28 March 2018

If the global economy turns down, it will take Italy with it.

What we see in Italy now is the predictable response to two decades of economic policy  that failed to produce jobs for young people. Wolfgang Münchau FT 25 March 2018

What is Disease X?

By listing Disease X, an undetermined disease, the WHO is acknowledging that outbreaks do not always come from an identified source and that, as it admits,  “a serious international epidemic could be caused by a pathogen currently unknown to cause human disease.” Moving fast to find a vaccine involves creating so-called “platform technologies” in advance. These involve scientists developing recipes for vaccines that can be customised. When an outbreak happens, scientists can sequence the unique genetics of the particular virus and enter the correct sequence into the platform to create a new vaccine. The Economist explains 23 March 2018

The next global recession will entirely reshape the Brexit debate

Austerity fatigue is endemic in the South. Bail-out fatigue is equally endemic in the North. Do not be fooled by the current recovery.  Extreme monetary stimulus has papered over the deformed structure of monetary union. Ambrose Evans-Pritchard Telegraph 21 March 2018

If it weren't for oil and gas, the trade deficit would be a lot bigger.

The U.S. trade deficit in goods that aren't oil and gas is now bigger than ever, both in dollar terms and as a share of GDP. Justin Fox Bloomberg 21 mars 2018

Economics failed us before the global crisis, Wolf

Analysis of macroeconomic theory suggests substantial ignorance of how economies work Socrates might say that awareness of one’s ignorance is far better than the illusion of knowledge. If so, macroeconomics is in good shape. Martin Wolf FT 20 March 2018

Donald is pro-Warfare State, pro-Welfare State and has just slashed Uncle's Sam's tax take to 16.6% of GDP----the lowest rate since 1950.

David Stockman 19 March 2018

Hyman Minsky And Asset Price Inflation Versus Consumer Price Inflation

The econometrics that dominates economic projections deals exclusively with output and inflation in the first system. But it’s in the price system for assets where where stability breeds instability and crisis. Creditwritedownsdcom 19 March 2018

Rethinking macroeconomics

In January 2018, a group of economists convened by Oxford published  their reply to Queen Elizabeth’s question of why nobody in the profession saw the 2008 crisis coming FT Collections

Larry Kudlow, National Review, 5 December 2007 Yes, 2007. There ain’t no recession.

There ain’t no recession. Larry Kudlow, National Review, 5 December 2007Yes, 2007

The Phillips Curve is right at the centre of the most important economic debate of the moment

John Authers FT 16 March 2018

Makthavare bör straffas för sina misslyckanden

Om Nassim Nicholas Talebs nya bok "skin in the game" Ivar Arpi SvD 16 mars 2018

De stora obalanserna i världshandeln är, precis som Trump hävdar, ohållbara.

De kraftiga överskotten i länder som Kina och Tyskland är orimliga och  underskotten i USA och Sydeuropa undergräver människors tilltro till demokrati och marknader.  Ulf Dahlsten SvD 15 mars 2018

Markets are back in fairyland again.

For many investors, the regret of missing out on what may well be a once-in-a-generation bull market overshadows any anxiety about the next crash.  Animal spirits are all too evident. Amin Rajan FT 16 March 2018

When the huge telecom adjustment drops out of the CPI less food and energy base next month

the Y/Y figure will also sharply accelerate. David Stockman 9 March 2018

Europe's crisis deepens as intellectual opinion turns, and Italy is where it all ends

Once-silent intellectuals are starting to challenge the core assumption of EU ideology, indicting the project for moral vandalism and a reckless attack on the democratic nation state. Theorists and professors are proclaiming the virtues of the nation – the precious liberal nation, inspired by the universal and redemptive values of the French and American revolutions – in a way we have hardly heard in recent times. They defend it as the only real vehicle of democracy known to man. No empire in history has ever been democratic. And the problem with soft empires is that they remain soft only until they meet resistance. At that point they must persist with a despotic logic – and we saw flashes of that in the eurozone crisis Ambrose Evans-Pritchard Telegraph 14 March 2018

The takeover of Bear Stearns by JPMorgan Chase sealed exactly a decade ago

The knockdown price of $2 a share was a shock to Wall Street. FT 15 March 2018 A lot of water has flowed since two hedge funds backed by Bear Stearns collapsed in July 2007 because of their exposure to US subprime mortgages. FT 26 May 2017

Italy will remain the principal source of risk for the eurozone for the foreseeable future

Italians were once among the most enthusiastic supporters of the European project. This is true no longer.  The election results are quite as shocking as the Brexit referendum and the election of Donald Trump. The biggest frustration may be that the people Italians vote for have next to no room for manoeuvre.  The question has rather been whom to elect (or sometimes not even elect) to carry out the policies decided in Brussels and Berlin. Martin Wolf FT 13 March 2018 My conclusion is that Italy will remain the principal source of risk for the eurozone for the foreseeable future. Wolfgang Münchau FT 11 March 2018 Read more here

Neither central bankers nor Wall Street ever see these new style recessions coming

because, in fact,  they can't be detected from even an astute reading of the macro-economic tea-leaves. David Stockman 9 March 2018

Professor: Bopriserna bör falla med 50 procent

Enligt Hans Lind borde ett rimligt riktmärke för bostadspriserna vara att en familj med normalinkomst ska kunna köpa ett radhus i en storstadsförort.  När Stockholms Handelskammare i torsdags anordnade en debatt om det finns en bostadsbubbla eller inte så var de inbjudna representanterna från byggbranschen överens om att det inte finns någon bubbla. SvT 12 mars 2018

What Robert Shiller, a Nobel economics laureate at Yale University, calls “narrative economics”

The key insight, he says, is to move on from the economic assumption that people think rationally John Authers FT 12 March 2018

A valuable lesson from the Great Recession is that credit-supply expansions play a key role in subsequent recessions.

When lenders make credit more available or more affordable, households respond by taking on debt, which drives up aggregate demand – that is, until the music stops. Amir Sufi, Atif Mian, Project Syndicate 5 March 2018 Amir Sufi, Professor of Economics and Public Policy at the University of Chicago Booth School of Business, is the co-author of House of Debt. Atif Mian is Professor of Economics, Public Policy, and Finance at Princeton University, Director of the Julis-Rabinowitz Center for Public Policy and Finance at the Woodrow Wilson School, and co-author of House of Debt. Read more here

Liberalerna vill stt Sverige ska vara medlem i euron senast 2022 och att vi ska gå med i bankunionen omgående.

Under sitt landsmöte förra året beslutade partiet att verka för att EU ska bli en federation.  Aleksandra Boscanin GP 7 mars 2018 Moderaterna vill i dag inte ge någon kommentar utöver meddelandet att de fortfarande inte tycker att det är aktuellt med något euromedlemskap. Ekot 5 mars 2018 ( Stefan Löfven var vid folkomröstningen om euron ordförande för "Fackliga röster för Europa")  Bitarna faller på plats...

The funny thing is that Trump has an overwhelming case.

US experienced its last annual trade (goods) surplus in 1975. In all, it cumulates to about $15 trillion more of stuff America bought versus what it sold to the rest of the world since 1975 Even when you throw in the $4 trillion surplus on the services account ( tourism, transportation, insurance, royalties and business services) during the same 43-year period, the deficit on current account with the rest of the world is still $11 trillion, and that's in then-year dollars. Inflated to 2017 purchasing power, the balance with the rest of the world since 1975 is well larger than the current GDP of the US. David Stockman 5 March 2018

US companies are heading for a "stock buyback binge of historic proportions".

"flush with cash from the tax cut", US companies are heading for a "stock buyback binge of historic proportions". Corporate stock buying is now cranking at a $1 trillion annual rate or  nearly double the rate of the last several years.  David Stockman 2 March 2018


The US central bank is planning to shed trillions in assets, but markets are calm

 After quadrupling its balance sheet between 2009 and 2017, the Fed is now trying to shed an eye-popping $2tn of assets in a mere four years. Nothing remotely like that has ever been attempted by a central bank. Gillian Tett FT 1 March 2018

Mainstream Media


Wall Street players----including the financial press---have been prospering inside the Bubble so long that they do indeed think it is reality.

We had a close encounter  yesterday during an appearance on CNBC.  The thirty-something anchors were shocked to hear that Washington's upcoming $1.8 trillion 2019 Treasury borrowing might generate a resounding "yield shock",  thereby upending the current huge stock market bubble where 4%+ bond yields are most definitely not priced in. The younger of the anchors (age 32) thought the $1.8 trillion was not a problem... Likewise, the senior anchor further averred that we've been there before and that "awhile back" $1 trillion dollar deficits were absorbed with ease.  To little avail, of course, we pointed out that "awhile back" came at the bottom the Great Recession when private investment had collapsed and the Fed and other central banks had been running their printing presses red hot.  David Stockman 28 February 2018

Why Is No One Listening to Jeremy Grantham, 79 ?

In normal times it’s reasonable to believe clients are concerned about how well a manager can handle a downturn.  “But in a bubble, forget it,” he says.  “Clients care much, much more about underperforming all their friends on the golf course.” Institutional Investor 28 Fabruary 2018

Disturbed the jet stream and weather patterns, allowing cold air to seep southwards into parts of Europe

An abrupt shift in temperatures high up disturbed the jet stream and weather patterns, allowing cold air to seep southwards into parts of Europe The Guardian 1 March 2018 Charles Greene, an atmospheric scientist at Cornell University, believes that warming in the Arctic led to a slowing down of a high-altitude, circulating wind known as the jet stream BBC och Englund om Jet Stream och vädret

American consumers have relied on appreciation of equity holdings and home values to support over-extended lifestyles.

It is also the case for the US Federal Reserve, which has turned to unconventional monetary policies to support the real economy via so-called wealth effects. Over the past 35 years, America has /been/ running balance-of-payments deficits every year since 1982  (with a minor exception in 1991, reflecting foreign contributions for US military expenses in the Gulf War).  Stephen S. Roach 26 February 2018