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2018-11-30

Carl Tham om Tyskland och socialdemokratin

Den dramatiska nedgången för SPD började med Gerhard Schröder och hans så kallade Harzreformer 2003, ett i grunden nyliberalt reformpaket för låglönemarknader och kraftig begränsning av arbetslöshetsförsäkringen


SPD är nu nere på omkring 15 procent i opinionsundersökningar och medlemmarna är ursinniga och villrådiga. 

Den tyska socialdemokratins öde är en del av ett europeiskt drama. Det tycks som om socialdemokratins tid runnit ut. 

Carl Tham Dagens Arena 29 november 2018

2018-11-27

Moderaterna och Alliansen kommer att söka parlamentariskt stöd hos Miljöpartiet. Det sade Fredrik Reinfeldt


Det sade Fredrik Reinfeldt i sitt segertal i natt då han mötte 650 jublande partikamrater 2010.


Efter valet 2010 hade Alliansen inte längre egen majoritet

Migrationsuppgörelsen mellan Alliansen och Miljöpartiet 2011  Wikipedia

Market tolerance for public debt is lower in a monetary union, as has become apparent since 2010.

Rising risk premia undermine the expansionary effect of fiscal deficits even during recessions.

The Eurozone economy’s Coming Downturn
Project  Syndicate 27 November 2018

Lucrezia Reichlin, a former director of research at the European Central Bank, is Professor of Economics at the London Business School.

Putin, Krim och salamin

Låt inte Putin hyvla den ukrainska salamin
Linda Nordlund Expressen

Ryssland kokar grodor och skär salami


De borgerliga grodorna är inte lustiga att se

2018-11-23

The legacy of the great crash of 2008

Banks bailed out to the tune of £500bn; 

the bankers responsible punished only in the court of public opinion; 

the imbalance between risk and sky-high rewards barely addressed by boards and shareholders.


FT editor Lionel Barber 23 November 2018

Greece Is Scrambling to Save Its Banks — Again

Non-performing exposures constitute almost half of Greek banks’ assets.

Most of their regulatory capital consists of deferred tax claims against the battered Greek sovereign.

2018-11-19

European Banks Are Taking Lending Risks Like It's 2007, ECB Says

“We’re seeing more and more banks take risks that, back in 2008 and 2009, they said they’d never do again,” said Korbinian Ibel, a director general at the ECB’s banking supervision arm.

“They argue that everyone else is doing it, so how can they avoid it? That sounds a lot like 2007.”

https://www.bloomberg.com/news/articles/2018-11-19/european-banks-are-taking-lending-risks-like-it-s-2007-ecb-says?srnd=premium-europe

The End of the Euro Is Closer Than You Think

The most plausible solution to the latest impasse appears to be “Italexit”— Italy’s secession from the euro zone. 


Europe has always been a disunited continent, with broad ethnic, cultural, linguistic, political, and economic divides. 

Given these disparities, the imposition of a single currency on a population that now totals 340 million people arguably has been doomed from the start.


Avi Tiomkin Barron's Nov. 16, 2018



Italy’s Threat to the Euro
Desmond Lachman, America Enterprise Institute, November 18, 2018

Italy, the Eurozone’s third largest economy, is coming under increased market pressure fueled by doubts about the country’s economic outlook and the sustainability of its public finances. 

2018-11-14

In the 2007 crash, declines in house prices cut household net worth by $7tn (50 per cent of GDP),

 and 

the amount of money homeowners pulled out of their homes through equity loans dropped by an amazing 14 per cent of disposable household income. 

The resulting damage to consumption explained the onset of recession in 2008. 


Gavyn Davies FT 11 November 11, 2018


Liquidity is an elusive quality at the best of times. In a bear market it can disappear in a moment.

Rest assured that not all of today’s trading strategies are predicated on that reality.

To return to Mr Minsky, the big question around the instability hypothesis now turns on the behaviour of the central banks.

John Plender FT 13 November 2018

2018-11-13

It was not Lehman itself that held together the global financial system,

but an implied guarantee that said “Global banks cannot be allowed to fail”. 

Frances Coppola - September 15, 2018

To my 19-year-old son, World War I — which ended 100 years ago yesterday — is as remote an event as the Congress of Berlin was to me when I was his age.

Here are 10 things I would like all my children to understand about what happened to their great-grandfather’s generation.

1. The war was not “for Civilisation,” as claimed on John Ferguson’s Victory Medal. It was a war for predominance between the six great European empires — the British, the French, and the Russian against the German, the Austrian, and the Ottoman — that broke out because all their leaders miscalculated ...

Niall  Ferguson Boston Globe  NOVEMBER 12, 2018

2018-11-10

But like Mises said – it’s not the boom that matters (from lowering rates). It’s the bust that will follow (from raising rates).

As a firm believer in the Austrian Business Cycle Theory – first drafted by Ludwig Von Mises in early 1900’s – I believe that artificially moving interest rates away from the markets natural rate is opening Pandora’s box.

Sure – lowering rates across the yield curve is good for stimulating the economy.  And like John Maynard Keynes explained, it’s a good tool for ‘papering over’ a slowdown – a quick fix.

But like Mises said – it’s not the boom that matters (from lowering rates). It’s the bust that will follow (from raising rates).

Suddenly and artificially raising short-term rates – which the Fed does when they hike – disrupts the current equilibrium.

Palisade Research  via Zerohedge 11/09/2018  



2018-11-09

No. 303 (Polish) Fighter Squadron

https://www.iwm.org.uk/history/the-polish-pilots-who-flew-in-the-battle-of-britain



Battle of Britain 303 

After the war, the Polish pilots felt their country had been betrayed to Soviet communism. And they were not included in victory celebrations in Britain, nor in war films celebrating RAF heroism. 

Other Polish contributions to the war effort - such as vital work in the cracking of the German Enigma code - went similarly unacknowledged.

https://www.bbc.com/news/stories-45516556


A Fifth of China’s Homes Are Empty. That’s 50 Million Apartments

Xi has said homes are for living in, not for speculation.

Bloomberg News 8 november 2018

Investors start to fret about ballooning US public debt

The CBO calculates that servicing costs will triple in size to nearly $1tn by 2028

Gillian Tett FT 8 November 2018

2018-11-05

SvD har tittat närmare på de fem värst drabbade länderna som utlöste den europeiska skuldkrisen.

Grekland,  Italien, Spanien, Irland,  Portugal.



US government deficit will be approximately $1.4 trillion per year for the next five years

zombie companies
Excessive leverage may light the fuse, but the real problems are deeper.
US government deficit will be (drumroll, please) approximately $1.4 trillion per year for the next five years, 

which will mean $29 trillion total debt by 2024. 

And that’s without a recession. 


“If you insist on policies that condemn whole populations to a combination of permanent stagnation and humiliation, you will soon have to deal... with anti-Europeanist xenophobes

Just over three years ago, when I was negotiating on behalf of Greece with the German government to end the combination of unsustainable loans and hyper-austerity that are still crushing my country, I warned my interlocutors at a Eurogroup meeting of eurozone finance ministers:

“If you insist on policies that condemn whole populations to a combination of permanent stagnation and humiliation, you will soon have to deal not with Europeanist leftists like us but, instead, with anti-Europeanist xenophobes who see it as their vocation to disintegrate the European Union.”


YANIS VAROUFAKIS Project Syndicate May 29, 2018 

If only we economists had spoken up sooner

The moral of the story is that if only we economists had spoken up sooner, been more convincing on the issues where we were right, and recognized where we were wrong, 
the situation today would be considerably better.


J. Bradford DeLong Project Syndicate 1 November 2018

2018-11-03

Greenhouse gases are increasingly disrupting the jet stream, a powerful river of winds that steers weather systems in the Northern Hemisphere.

The findings suggest that summers like 2018, when the jet stream drove extreme weather on an unprecedented scale across the Northern Hemisphere, will be 50 percent more frequent by the end of the century if emissions of carbon dioxide and other climate pollutants from industry, agriculture and the burning of fossil fuels continue at a high rate.

https://insideclimatenews.org/news/31102018/jet-stream-climate-change-study-extreme-weather-arctic-amplification-temperature


Stocks just a sideshow to the real drama of bond markets

Banking’s diminished role in lending has enormous, still under-appreciated implications

Robin Wiggglesworth FT 2 November 2018


James Bigglesworth, DSO, DFC, MC

2018-11-02

IMF The Global Economic Recovery 10 Years

Lasting Effects: The Global Economic Recovery 10 Years After the Crisis,,

Junk Bond Bubble in Six Images

Trump's Iran squeeze threatens $150 oil and a world recession

US trade deficit increases more than expected in September and is now up 10% for 2018


The shortfall rose to $54 billion for the month, and reflective of a 10.1 percent increase year to date



The goods deficit stood at $76.3 billion, the highest on record on a seasonally adjusted basis.

Exports increased to $212.6 billion, a $3.1 billion gain from August, 

while imports rose $3.8 billion to $266.6 billion.