Visar inlägg från juli, 2018

IMF Gives Downbeat View of Greek Economy at End of Bailout Era

China's Global Trade Surplus Expected to Go Negative

 Mish 30 July 2018

Credit issued to developing-economy borrowers excluding banks surged to $3.7 trillion BIS

Quantitative easing (QE) — undoubtedly the boldest policy experiment in the modern history of central banking.

Stephen S. Roach 30 July 2018

Climate change is partly responsible, but the summer has also featured unusual jet stream activity, which is bringing the subtropical heat north

As the northern hemisphere endures record-breaking temperatures, scientists and meteorologists are looking at the possible causes.

In the summer of 1989 Poles peacefully dismantled the communist system that had blighted their country since the end of the second world war.

 Lech Walesa, founder of Solidarity and Poland’s president from 1990 to 1995, grasped what was at stake: “It is easy to make fish soup from an aquarium with living goldfish, but just imagine what a challenge it is to try to make an aquarium with living goldfish out of fish soup. And this is precisely what we are trying to do.” FT 30 July 2018 Eurokrisen, fisksoppan och elitens olidliga dumhet och varför en extern devalvering är bättre än en intern Rolf Englund 2012

The jet stream forms a boundary between the cold north and the warmer south

This narrows the temperature difference between the Arctic and lower latitudes, which is crucial because it is the temperature gradient between them that drives the jet stream wind The jet stream forms a boundary between the cold north and the warmer south, but the lower temperature difference means the winds are now weaker.  This means the jet stream meanders more, with big loops bringing warm air to the frozen north and cold air into warmer southern climes. Furthermore, researchers say, the changes mean the loops can remain stuck over regions for weeks, rather than being blown westwards as in the past.

Arithmetic for Austrians

Frances Coppola - April 22, 2018

IMF: How To Deal With Failed Banks

Resolving a failing bank should rely on bail-ins:  private stakeholders should bear the losses IMF blog 3 July 2018

John Hussman On FAANGs

Investors should, but rarely do, anticipate the enormous growth deceleration that occurs once tiny companies in emerging industries become behemoths in mature industries.  You can’t just look backward and extrapolate.  In the coming years, investors should expect the revenue growth of   the FAANG group to deteriorate toward a nominal growth rate of less than 10%, and gradually toward 4% John Hussman via zerohedge 27 July 2018

While risk no longer sits in the banking system, it has not vanished.

It grows ever clearer that risk has been moved, primarily to the pension system. John Authers FT 26 July 2018

Det är de unga som tvingas betala priset för bostadsrallyt

Vad känner unga vuxna när samma lön och anställning köper betydligt mindre bostad än för tidigare  generationer?   Mattias Svensson, Signerat DN 26 juli 2018

The jet stream we are currently experiencing is extremely weak

I en intervju i The Guardian lyfter klimatforskaren Dann Mitchell exempelvis fram svaga jetströmmar – starka vindar på mycket hög höjd – som en delförklaring till att värmen vägrar släppa taget om norra halvklotet. “The jet stream we are currently experiencing is extremely weak and, as a result, areas of atmospheric high pressure are lingering for long periods over the same place,”

IMF: Higher-than-desirable current account balances prevail in countries such as Germany and Sweden — as well as in China

Higher-than-desirable current account balances prevail in northern Europe—in countries such as Germany, the Netherlands, and Sweden—as well as in parts of Asia—in economies like China, Korea, and Singapore. While the current configuration of global excess imbalances does not pose an imminent danger, we project that,  under planned policies, these imbalances will grow over the medium term, eventually posing a risk to global stability. Maurice Obstfeld IMF 24 July 2018

Why It Might Be A Good Time To Revisit Ray Dalio's 1937 Analog

The correlation between the S&P 500 over the past four years and the four years leading up to the 1937 top is roughly 94%.  As I have suggested in the past, price analogs are not very valuable on their own but when the fundamentals also parallel closely they become far more interesting. via zerohedge 26 July 2018

China’s debt threat: time to rein in the lending boom

“If something can’t go on forever, it will stop.” This statement by Herbert Stein, chairman of the US council of economic advisers under Richard Nixon and Gerald Ford, tells us that debt cannot grow faster than an economy forever. That is going to be true for China, too. Martin Wolf FT 25 July 2018


After four devaluations in seven months and a forecasted financing gap of about $16bn over the next three years, Pakistan is facing another balance of payments crisis.

Jet stream video


Japan: Deadly heat wave continues as temp hits record 41.4C near Tokyo

Much of the northern hemisphere has been experiencing a scorching summer characterized by heatwaves and extreme weather. CNN 23 July 2018

What is the jet stream and how does it work?

Met Office Youtube

Soaring food and energy costs are painful, but falling home prices could mean even bigger worries. CNN May 9, 2008

  Even if financial firms avoid another crisis along the lines of the near-meltdowns earlier this year of Bear Stearns and Countrywide (CFC, Fortune 500), some economists say problems in the financial sector are only beginning to be felt on Main Street. "The real economy hasn't yet taken the hit," says Northern Trust economist Asha Bangalore. Read more here Finanskrisen 

Roubini For the first time in a decade, the biggest risks are now stagflationary (slower growth and higher inflation).

These risks include the negative supply shock that could come from a trade war; higher oil prices, owing to politically motivated supply constraints; and inflationary domestic policies in the US. Nouriel Roubini Project Syndicate 18 July 2018

Because the Arctic is warming twice as fast as the rest of the Earth, that temperature difference is getting smaller

Jennifer A. Francis, an Arctic researcher at Rutgers University. Temperature differences between the Arctic and the lower latitudes help create the jet stream.  Because the Arctic is warming twice as fast as the rest of the Earth, that temperature difference is getting smaller.  As a result, the jet stream is getting weaker and shifting its behavior, sending cold air south from the Arctic and pumping warm air north.

Många svenskar känner nog till att det finns 7,6 miljarder människor. Färre känner till FN:s prognos för år 2100

För Afrika (1,3 miljarder) är prognosen 2,5 miljarder till 2050, och hela 4,5 miljarder till 2100. ”FN bör ha som mål att bromsa folkökningen” Frank Götmark m fl SvD 21 juli 2018 Vad gör vi åt befolkningsexplosionen? Rolf Englund Svenska Dagbladet, Fritt Forum (dåtidens Brännpunkt) 4/8 1967 Eviga frågor.

Japan heatwave

Temperatures reached 40.7C in central Japan earlier this week, a five-year nationwide peak. In the city of Kyoto temperatures have stood above 38C (100.4F) for seven days in a row for the first time since records began in the 19th Century. BBC 21 July 2018 Brandläget är mycket värre och /den svenska/ rapporteringen därom mycket mer kortsiktigt i tid och rum än vad man vill tro.  Här har jag samlat min alternativa bild om vad som pågår. Dessutom ser man med en knapptryckning att torkan och värmen skall bestå under åtminstone tio dagar. Det kan bli mer. Rolf Englund på Facebook 21 juli 2018 Klicka på Vindar längre ner på sidan.

"Somewhat unusual weather patterns", how much can we attribute to jet stream ?

As we experience somewhat unusual weather patterns, how much can we attribute to jet stream changes not previously seen,  while taking into account both natural and seasonal changes? During a period with a strong jet stream, weather conditions at the surface tend not to stay in position for long periods of time since the jet stream moves them away quickly. When the jet stream is weak however, these waves become more amplified (the waves are larger) and move more slowly. Weather patterns at the surface may remain in the same position for longer periods of time and can remain stuck for many days, or even weeks.  This is particularly significant during more extreme weather events. Long periods of heavy rain lead to flooding, or conversely long term dry conditions lead to drought.

The Italian crisis was the Left’s final warning

The 2008 financial crisis was our generation’s 1929 It’s time to explain how the bloc, and the euro, could be run differently, democratically and sustainably Yanis Varoufakis New Statesman op-ed, 6 June 2018

Western businesses have slipped jobs overseas to countries with low labor costs

while the middle class has been pushed into debt in order to try to keep up.  The Glass-Steagall law and other brakes on American banks were abolished by a cheerleader for globalization, Bill Clinton, and these banks subsequently lost all restraints in their enthusiasm to lend.  The cherry on top of the sundae was the real estate bubble and ensuing crash of 2008 Enrico Verga via 20 July 2018

China has avoided a recession for a quarter-century

Macroeconomists should think about credit policy as an important supplement  to the traditional fiscal and monetary tools of recession-fighting. Noah Smith 19 July 2018

European banks still have post-crisis repairs to do

Former US policymakers say their counterparts did not do enough to stop the rot Gillian Tett FT 19 July 2018 Martin Wolf:  My own view is that the people, including Geithner, who dealt with this crisis made big mistakes but also saved the world from another Great Depression Click

Jet stream changes linked to Europe’s extreme weather

Mr Powell’s testimony suggests he that he understands the risks if the signal from the yield curve proves accurate.

What some investors fear is that he may not act on them before it is too late. FT 19 July 2018

The largest holders of US Treasuries after China and Japan

 are listed below.  And a quick review of the facts underscores that they are even more unnatural holders of Uncle Sam's debt than China, Japan or Russia. For instance, Ireland's  $301 billion   of holdings amounts to 90% of its $330 billion GDP.  We seriously doubt that its central bank was in the business of "investing" nearly the totality of its national income in Uncle Sam's low yielding paper.

EU Sovereignty east and west

For many westerners the point of the EU is to bind countries into a peace project that also delivers economic benefits by obliging them to pool sovereignty; “nationalism” thus becomes a dirty word.  But for easterners, joining the EU was in part a guarantee of the national sovereignty that had been squashed during decades of subjugation by the Soviet empire. The Economist 18 July 2018

Bankernas utlåning till hushållen - Swedbank störst

Av 3 597 048 MSEK i utlåning till hushållen står Swedbank, Handelsbanken, SEB och Nordea för 74 %.   Cornucopia 18 juli 2018

The Debt Train Will Crash - Mauldin

“We no longer have business cycles, we have credit cycles.”  Post-crisis growth, mild as it’s been, has been largely a function of debt, which central banks encouraged and enabled.  The result was inflated asset prices without the kind of “recovery” seen in previous business cycles.  Interest rates, i.e. the cost of debt, thus became critical. I showed in that letter how companies will need to refinance about $4T of bonds in the next year, almost all of it at higher rates.  This will hit debt-burdened companies that are already struggling and make it almost impossible for some to keep operating.  Lenders, i.e. high-yield bond holders, will try to exit their positions all at once only to find a severe shortage of willing buyers. John Mauldin 13 July 2018

Trump’s Trade War May Spark a Chinese Debt Crisis

A tighter dollar will make the bursting of the credit bubble an inevitability The whole economy is a Ponzi scheme. Anne Stevenson-Yang Bloomberg 18 July 2018

There was no deleveraging at all ---just more of the same

and that the debt-based financial fragility that caused the system to literally meltdown in the fall of 2008  has merely metastized from $52 trillion to nearly $69 trillion. David Stockman's Contra Corner 17 July 2018

In Science explanation for weather pattern in which the jet stream stalls out over a region

A study published earlier this year in  Science  offers an explanation for a mysterious and sometimes deadly weather pattern in which the jet stream, the global air currents that circle the Earth, stalls out over a region. AGweb 3 July 2018

Spanska sjukan - antalet döda var kanske 30 eller 40 miljoner. Första världskriget slukade 9,2 miljoner soldatliv

Spanien var neutralt och saknade krigstidscensur blev de första att få god kännedom om pandemin Det är troligt att det verkliga antalet döda var kanske 30 eller 40 miljoner.  Första världskriget slukade 9,2 miljoner soldatliv och sammanlagt omkring 15 miljoner människor.  Dick Harrison SvD 16 juli 2018 Smittskydd & beredskap hos Folkhälsomyndigheten

Crashed: How a Decade of Financial Crisis Changed the World, Book by Adam Tooze

What really went wrong in 2008? "Even people who have followed this story closely will learn a great deal." Also present are some huge political stories: the meddling of the EU in Ukraine Martin Wolf FT’s chief economics commentator 17 July 2018

Bankcheferna tror inte på kris

”Borg för alarmistisk” SvD 5 juli 2018

Increased fluctuations in the path of the North Atlantic jet stream since the 1960s coincide with more extreme weather events in Europe such as heat waves

Having a 290-year record of the position of the jet stream let Trouet and her colleagues determine that swings between northern and southern positions of the jet became more frequent in the second half of the 20th century When the North Atlantic jet is in the extreme northern position, the British Isles and western Europe have a summer heat wave while southeastern Europe has heavy rains and flooding  January 16th, 2018 The big question is “why does the jet stream shift?” The findings suggest the latitude of the Atlantic jet stream in summer is influenced by several factors, including sea surface temperatures, solar variability, and the extent of Arctic sea-ice.

The ECB defines price stability as inflation “below, but close to, 2% over the medium term.”

  That is a lower inflation rate than even the Bundesbank achieved during its celebrated pre-euro history,  and it is a tighter target than virtually all other central banks pursue.   For some, too much of a good thing is apparently wonderful. Stefan Gerlach Project Syndicate 12 July 2018 Stefan Gerlach is Chief Economist at EFG Bank in Zurich and Former Deputy Governor of the Central Bank of Ireland. He has also served as Executive Director and Chief Economist of the Hong Kong Monetary Authority and as Secretary to the Committee on the Global Financial System at the BIS.

Bears sound clever; bulls make money.

The pessimists believe that markets drive the economy. In their view, near-zero interest rates and quantitative easing, or QE, pushed investors out of government bonds and into risky assets.   Now that such policies are reversing, stocks and corporate bonds are vulnerable—and so is the economy.  The optimists, by contrast, believe that markets are led by the economy. Only when it shows weakness, and profits slump, is it time to get out. Buttonwood The Economist 12 July 2018

There is no rational reason to buy a geriatric bull market that has 3-5% upside and 40-50% downside.

But we have finally reached the point where investor risk/reward metrics have absolutely nothing to do with the daily bumps and grinds of the stock averages. That is to say, the chart monkeys now own the casino lock, stock and barrel. The alternating red and green flickers on the tickers discount nothing real because everything which is real points to crunch time ahead. David Stockman 12 July  2018

monetary union without banking union will not work. Eichengreen

  Euro Area needs vigorous, coordinated regulation of its banking and financial systems by a single supervisor — monetary union without banking union will not work. Barry Eichengreen sciencedirect 19 June 2018

The last days of a prime minister are dreadful

Edwina Currie Telegraph 9 July 2018 The Prime Minister overplayed her hand disastrously by trying to bounce the Cabinet and the Parliamentary party into support for a settlement that violates the electoral manifesto, the Lancaster House speech, the verdict of the referendum, and the minimum conditions of sovereign self-government.   Ambrose 9 July 2018 The bloody history of civil war in the Tory party and The 1990 Tory coup against Margaret Thatcher Englund blog 27 February 2016

America’s foreign trade deficits on goods transactions are getting worse.

Trade deficits with the EU and China, growing at respective annual rates of 15 percent and 10 percent Michael Ivanovitch CNBC 9 July 2018

France’s market watchdog is bracing for a surge in global bond yields and a Wall Street crash

as soon as this year, fearing that contagion will spread to Europe and snuff out the fragile recovery. “The world has never been so indebted – even more than before the 2007 crisis – and this debt has never been so risky,” said the Autorité des Marchés Financiers (AMF) in its annual report. Ambrose Evans-Pritchard Telegraph 5 July 2018

Italy’s debts to European Central Bank near €500bn

  Germany’s Target 2 surplus is on track to reach €1tn. FT 9 July 2018

DN om folkpartiet: Hur länge är folkets nej till eurosamarbetet giltigt?

Och vad ska EU egentligen ägna sig åt?  Att skrota den svenska kronan nu kan ju inte vara en valvinnare. Hungern efter den federalistiska agenda som Jan Björklund presenterade i Almedalen, och ”Mer EU!”, är dessvärre dämpad. DN 4 juli 2018

Spain’s Bankia, the country’s fourth-largest bank

It’s been a headache for Spanish leaders since it required a rescue in 2012 to avert a collapse  that could have brought down the nation’s entire financial system.  Bloomberg 6 July 2018

BIS frets about an inexorable increase in global debt level Tett

217 per cent of gross domestic product, up from 179 per cent a decade ago. This partly reflects government borrowing.  However, corporate leverage has also exploded, particularly among western high-risk borrowers and emerging markets companies, most notably in China. Gillian Tett FT 5 July 2018 Next Bubble U.S. Government Bonds

Extreme heat sets records across the northern hemisphere

These meteorological events are linked by the behaviour of the jet stream, the band of fast winds blowing west to east in the upper atmosphere. Movements in the wavy path that the jet stream follows around the globe play a key role in determining weather conditions. FT 5 July 2018 Väderkartan är konstig (inte som den var förr) Rolf Englund blog 12 maj 2010 Allt Du behöver veta om vädret och The Jet Stream

Europe’s establishment is luxuriating in two recent announcements Varoufakis

Europe’s establishment is luxuriating in two recent announcements that would have been momentous even if they were only partly accurate:  The end of Greece’s debt crisis, and a Franco-German accord to redesign the eurozone.  Unfortunately, both reports offer fresh proof of the European Union establishment’s remarkable talent for never missing an opportunity to miss an opportunity. Yanis Varoufakis Project Syndicate 28 June 2018