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2019-09-30

Annie Lööf för och emot omskärelse av pojkar och EMU

Annie Lööf beklagade att Centerpartiets stämma fattade beslut om att verka för ett förbud mot omskärelse på pojkar. Tidigare har hon själv motionerat om ett förbud i riksdagen.

– Det är inga andra kroppsstympningar som i dag accepteras, så varför ska stympning av pojkars könsorgan accepteras?, skrev hon bland annat.

https://www.aftonbladet.se/nyheter/samhalle/a/OpPL43/loof-kravde-forbud-mot-manlig-omskarelse

Annie Johansson (C) ångrar ett politiskt beslut: att hon röstade nej till att byta krona mot euro 2003.

https://englundmacro.blogspot.com/2011/06/annie-johansson-c-angrar-ett-politiskt.html

Hon intar varje gång den uppfattning som just då uppfattas som mest politiskt korrekt. 



Om IB hos regeringen

2019-09-29

En viktig men ofta bortglömd grundorsak till klimatkrisen är världens befolkningsökning.

I en tredje studie analyserar Hall med flera folkökning och klimatändring i Afrika, kontinenten med störst ökning: cirka 1,3 miljarder människor i dag, 2,5 miljarder år 2050, och 4,3 miljarder år 2100 enligt FN:s beräkningar. 

Då förutsätts ändå rejält minskande födelsetal i Afrika, vilket är ett osäkert antagande.


Frank Götmark och Malte Andersson





Are investors ready for the ‘Doomsday Dollar’ scenario?

If the thesis holds, the dollar is poised to fall against the euro and yen over the next few years, and by as much as 50 to 60 per cent.

Rana Foroohar FT 29 September 2019



US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.

Draghi backs calls for fiscal union to bolster eurozone

- To have a stronger EMU [economic and monetary union], we need a common eurozone budget. 

FT 29 September 2019


Mario Draghi declares victory in battle over the euro

 FT 30 September 2019


2019-09-27

The Narrow Corridor — the fine line between despotism and anarchy

Their analytical starting point is the Leviathan of the 17th-century English political philosopher Thomas Hobbes.

The Narrow Corridor: States, Societies, and the Fate of Liberty, by Daron Acemoglu and James A Robinson,

Martin Wolf FT 26  September 2019

2019-09-26

ECB’s German board member quits over loose monetary policy

Sabine Lautenschläger’s resignation points to deep divisions at central bank

Ms Lautenschläger is not the first German representative on the ECB board to quit after disagreeing with its dovish monetary policy. 

In 2011, Jürgen Stark quit in protest over the central bank’s purchases of government bonds in response to the eurozone debt crisis. 

Earlier that year, Axel Weber quit as head of Germany’s Bundesbank after fiercely opposing the ECB’s strategy.

FT 26 September 2019


2019-09-24

Befolkningsökningen

Den är inte så farlig så länge ett antal miljarder människor lever i yttersta fattigdom. 

Den blir ett problem om 10 miljarder människor skall ha det som vi har det nu. 

När de skall ha stål och betong, asfalt och när 10 miljarder människor i alla fall en gång i livet skall åka till Venedig och Paris.

Africa to propel world’s population towards 10bn by 2050



2019-09-23

BIS said the high-risk loans have climbed to $1.4 trillion and are increasingly being sliced and diced

The Bank for International Settlements said the high-risk loans have climbed to $1.4 trillion and are increasingly being sliced and diced much like subprime mortgage debt before 2007.

They are packaged into debt securities known as collateralised loan obligations (CLOs) and mostly sold to unknown funds.

Leveraged loans are a form of bank lending to heavily indebted companies with junk credit ratings.

Ambrose Evans-Pritchard Telegraph 22 SEPTEMBER 2019  

BIS Report

Yes, There Is a Trade-Off Between Inflation and Unemployment


The Phillips curve “probably the single most important macroeconomic relationship.” 

This period is providing yet more evidence — though we didn’t really need it — that the Phillips curve is unstable and, therefore, an imperfect guide for policy.

But unstable does not mean nonexistent, and imperfect does not mean useless. As long as the tools of monetary policy influence both inflation and unemployment, monetary policymakers must be cognizant of the trade-off.

N. Gregory Mankiw, rofessor of Economics at Harvard University, NYT 9 August 2010

Death of the Phillips curve brings political foes together at the graveside




NAIRU

2019-09-21

Can Capitalist Democracy Survive?

For two generations after World War II, the constructive coexistence of capitalism and democracy was largely taken for granted in developed countries – including the former Axis powers. 

This deep-seated complacency was reinforced by the collapse of the Soviet Union. 

But the 2008 global financial crisis put an end to faith in the supposed inevitability of liberal economics and democratic politics.


WILLIAM H. JANEWAY Project Syndicate Sep 20, 2019 

The financial crisis persuaded voters that they were governed by aloof, incompetent, self-serving elites. 

Wall Street and the City of London were bailed out while ordinary people lost their jobs, their houses and their sons and daughters on the battlefield in Iraq and Afghanistan. 

https://www.economist.com/leaders/2019/08/29/the-corrupting-of-democracy






2019-09-20

Ingves upprepade sin varning om att utländska investerare kan tappa tålamodet med Sverige.

Och betonade att 81 procent av utlåningen från de svenska affärsbankerna har fastigheter och bostäder som säkerhet.

– Resten av världen vet att vi inte sköter den svenska bostadsmarknaden särskilt väl och då bör man vara försiktig, sa Ingves.

SvD 18 september 2019


Om utlänningar börjar bli nervösa över hur det står till i landet så kan bankerna få problem eftersom två tredjedelar av de pengar de lånar upp är utländsk valuta.

Birgitta Forsberg, SvD Näringsliv 30 april 2018

EU-centralism hotar EU:s framtid

Jag var engagerad i arbetet inför den svenska EU-folkomröstningen 1994 som ledde till vårt EU-medlemskap. 

Ett viktigt argument för medlemskapet var subsidiaritetsprincipen, dvs att beslut ska fattas på den lägsta ändamålsenliga nivån.

Det slog mig härom dagen att det var länge sedan jag hörde talas om denna viktiga princip som borde vara helt central i EU:s arbete.

Janerik Larsson SvD 20 september 2019



Glaringly obvious - Skriande uppenbart. Fiscal policy.

Germany waking up to the glaringly obvious need for productivity-enhancing, investment-based fiscal stimulus.

Jim O’Neill, a former chairman of Goldman Sachs Asset Management and a former UK Treasury Minister, is Chair of Chatham House. 

Project Syndicate 18 September 2019


Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.



The repo markets mystery reminds us that we are flying blind

Quantitative easing means there is a greater chance of the global financial machine misfiring

Gillian Tett FT 19 September 2019


Lorenzo Bini Smaghi, the former member of the ECB’s executive board: 


2019-09-19

TIPS (Treasury Inflation Protected Securities) are designed to offer an investor a way to insulate their bond against inflation

He predicts that sometime in the next decade that TIPS will see a surge in demand as investors desperately try to hedge themselves,

MarketWatch 19 September 2019

Negative interest rates take investors into surreal territory Tett


The markets are vulnerable to potential nasty losses if rates suddenly shoot up



Collapse Of The Global Financial System, Part 1

There’s not going to be a deal, because the problem that Trump is focused on and obsessed with is that we bought $543 billion worth of stuff from China last year, and we sold $120 billion.

It’s not because of bad trade deals 

If you look at manufacturing, our average wage is over $30, which includes the cash wage plus the health benefits, retirement, and Social Security taxes, and all the rest of it.
And in China, it’s about $5. 

The QE experiment has failed entirely. We’ve had massive increases in the Fed’s balance sheet, which went from about $850 billion on the eve of the subprime crisis to a peak of $4.5 trillion. 

central banks of the world. Collectively, they have driven bond yields to rock bottom. I would say we’re now in the mother of all bond bubbles in history.

David Stockman. September 18th, 2019



Third series of so-called targeted longer-term refinancing operations, ECB LTRO

The European Central Bank gave the region’s lenders 3.4 billion euros ($3.8 billion) in free long-term loans as it revived a policy intended to boost economic growth and inflation.

Bloomberg 19 september 2019 



2019-09-18

- Jag är medveten om att dessa åtgärder påverkar min generations bostadstillgångar idag. Ingves.

”De större frågorna, som rör exempelvis hyresreglering, fastighetsskatt, ränteavdrag och beskattning av bostaden vid försäljning är politiska frågor, frågor som ingen politiker i grunden velat ta tag i” 

Riksbankschef Stefan Ingves 2019-09-18 


Mean Reversion

Currently CAPE is near 30, or close to double the average of the last 100 years. 

https://www.zerohedge.com/markets/caution-mean-reversion-ahead

A bear market could come without warning or apparent reason, or with the next recession

Robert J. Schiller Project Syndicate 24 september 2018

https://www.internetional.se/shares.htm#rjs

Fed stands ready to inject another $75bn into the financial system

The Federal Reserve Bank of New York announced plans to inject another $75bn into the US financial system when trading resumes on Wednesday, a day after making its first such intervention in more than a decade to alleviate funding pressures in short-term lending markets.

FT 18 September 2019


Some old financial melodies from 2007-2008 are getting a replay.

It’s a rule of thumb that if you’re even talking about such geeky fare as long-short market-neutral strategies or overnight repurchase agreements, then something has already gone wrong.

John Authers Bloomberg 18 september 2019 


The US dollar bond pits alone will soon be shocked with $1.8 trillion of homeless government debt 
as the US Treasury issues $1.2 trillion of new paper and the Fed dumps $600 billion of old debt during the fiscal year that incepted three days ago.


David Stockman, October 4th, 2018



Martin Wolf: why rentier capitalism is damaging liberal democracy

Economies are not delivering for most citizens because of weak competition, feeble productivity growth and tax loopholes

So why is the economy not delivering? The answer lies, in large part, with the rise of rentier capitalism. In this case “rent” means rewards over and above those required to induce the desired supply of goods, services, land or labour.

“Rentier capitalism” means an economy in which market and political power allows privileged individuals and businesses to extract a great deal of such rent from everybody else.

Martin Wolf chief economics commentator at the Financial Times 18 September 2019




2019-09-17

The Middle East's 'Sarajevo moment' has caught markets in a complacent stupor

Iran has slapped the impulsive and autocratic Crown Prince Mohammed in the face. 

The Revolutionary Guard have shown that they can circumvent the Patriot and Hawk missile defences of the Saudi Arabia’s gold-plated military and strike Aramco’s nerve centre.

Ambrose Evans-Pritchard 17 September 2019

Stupor is the lack of critical mental function and a level of consciousness wherein an affected person is almost entirely unresponsive and only responds to intense stimuli such as pain. Wikipedia

Draghi Leaves It to Lagarde to Pick Up the Pieces

The incoming president of the European Central Bank will have to face down a revolt over her predecessor’s decision to restart quantitative easing.  

Ferdinando Giugliano Bloomberg 17 september 2019 

2019-09-16

Stora frågor som alltför få vågar ägna sig åt, säger Karolina Ekholm

– Hur fungerar egentligen finanspolitik och penningpolitik? Vad bestämmer växelkurser? Varför hamnar länder återkommande i kriser?

DN 16 September 2019


Is Christine Lagarde capable of the change necessary to save the eurozone?

Without knowing it, the EU has become a kind of Ancien Régime whose arrogant complacency risks its own destruction.

Jeremy Warner Telegraph 10 September 2019


Draghi Faced Unprecedented ECB Revolt as Core Europe Resisted QE


Economist Robert Shiller sounds a warning on the US housing market: ‘We’re in 2005 again’

Nobel prize-winning Shiller has always sought out the human side of the so-called dismal science.

His reputation has been built on sounding the alarm ahead of the dotcom bubble in the early 2000s and the US housing crash in the run-up to the financial crisis.

Telegraph 16 September 2019


A bear market could come without warning or apparent reason, or with the next recession




2019-09-15

Macroeconomics was one of the casualties of the 2008 global financial crisis.

Conventional macroeconomic models failed to predict the calamity or to provide a coherent explanation for it, and thus were unable to offer guidance on how to repair the damage. 

Despite this, much of the profession remains in denial, hankering for a return to “normal” and in effect treating the crisis as just a rude interruption.

Mark Cliffe Project Syndicate 9 September 2019 


The Economists' New Clothes

With economists struggling to derive credible explanations of macroeconomic conditions from the prevailing models, those who have long criticized the discipline for its scientific pretensions are feeling vindicated.

The widespread belief that economic activity will follow a regular cycle around a stable growth trend is not very helpful beyond the very short term. 


Rather, the economic disruptions we are experiencing highlight an obvious fact, but one that prevailing models assume away: the future is fundamentally uncertain, and not all risks are quantifiable.

Project Syndicate September 2019


Economic theory discredited






2019-09-13

Draghi Faced Unprecedented ECB Revolt as Core Europe Resisted QE

Bank of France Governor Francois Villeroy de Galhau joined more traditional hawks including his Dutch colleague Klaas Knot and Bundesbank President Jens Weidmann

Other dissenters included, but weren’t limited, to their colleagues from Austria and Estonia, as well as members on the ECB’s Executive Board including Sabine Lautenschlaeger and the markets chief, Benoit Coeure

Bloomberg 12 September 2019


2019-09-12

2012 räddade Draghi euron med löftet att ”do whatever it takes”.

2015 slog han återigen till med vad som senare kommit att kallas Draghis ”bazooka”. Alltså så kallade kvantitativa lättnader med uppköp av obligationer på numera totalt 2 600 miljarder euro, hisnande 1,3 miljoner euro i minuten, under de senaste fyra åren.

Tomas Lundin SvD 12 September 2019


ECB will restart its quantitative easing (QE) programme, buying €20bn of bonds every month from November. 

It eased lending terms for eurozone banks and offered them tiered interest rates in a bid to ease the pressure on their lending margins.




Germany, it says, will never accept a “transfer union”. Target 2

In real life, of course, that horse has already bolted. 

The true choice is between the shadow transfer union represented by the mountain of national central bank liabilities that have built up at the ECB — so-called Target balances — and the creation of an economic union that admits the role of fiscal policy in managing economic demand.

Philip Stephens FT 12 September 2019


More about Target 2 at IntCom



In Strasbourg on Dec. 9, 1989, after the Berlin Wall fell, Germany agreed to monetary union in order to get President Mitterand to agree to German reunification

WSJ 23 Sept 2011





2019-09-10

Summer books of 2019: Economics Martin Wolf selects his mid-year reads

The Case For People’s Quantitative Easing by Frances Coppola

She is making the case for helicopter money – quantitative easing, but carried out by placing money directly into people’s accounts. 

My long-time colleague and mentor, Martin Wolf of the Financial Times, commented

John Authers Bloomberg 10 september 2019 

Highly recommended



2019-09-06

The best book written on EMU woes is EuroTragedy: a Drama in Nine Acts by Princeton Professor Ashoka Mody, the International Monetary Fund’s former deputy director in Europe.

A report three years ago by a group of eminent economists for the Delors Institute warned that the eurozone will remain unworkable unless it embraces some form of fiscal union and debt pooling.

“At some point, Europe will be hit by a new economic crisis. We do not know whether this will be in six weeks, six months or six years. But in its current set-up the euro is unlikely to survive that coming crisis,” they said. Nothing was done. 

Bernard Connolly, the high priest of eurosceptic theory 

 Ambrose 4 September 2019


https://scholar.princeton.edu/amody/euro-tragedy

https://www.foreignaffairs.com/reviews/capsule-review/eurotragedy-drama-nine-acts





2019-09-04

Deutsche Bank CEO Says Negative Rates Ruin Financial System

More monetary easing by the European Central Bank, as widely expected next week, will have “grave side effects” for a region that has already lived with negative interest rates for half a decade.

Few economists believe another cut at this level would actually help the economy, and clients are telling the bank they won’t invest a single euro more just because rates go 10 basis points lower, Sewing said at a conference in Frankfurt. 

All it would achieve is to further divide society by lifting asset prices while punishing Europe’s savers who are already paying 160 billion euros ($176 billion) a year because of negative interest rates, he said.

Bloomberg 4 September 2019





Recession predictors have always had a terrible record

But in the past, stopped-clock doom-mongers only had to wait a few years for their moment of glory. 

Now redemption can take decades. 

At 122 months, the current US expansion is the longest on record, just ahead of the period from 1991 to 2001.

A hard to predict financial crisis is the most probable source of the next downturn

FT 3 September 2019