Visar inlägg från oktober, 2019

Anders Borgs självbiografiska bok ”Finansministern”

är i stort sett renons på klickbeten och skvaller, men mumma för alla som intresserar sig för politisk dramatik och ekonomisk krishantering.  Niklas Ekdal DN 30 oktober 2019

Martin Wolf: I feared that the euro would end up dividing the EU politically when it was launched some three decades ago.

But there is no easy way back. It has to work. How the euro helped Germany avoid becoming Japan FT 29 October 2019

Bryt tystnaden om 1968 – året som medierna glömde

Finns det verkligen inga nu levande vittnen, verksamma inom kulturen eller journalistiken, som var med och som kan lägga ut texten om vad 1968 betydde för deras politiska utveckling?  Som kan berätta om Vietnamkrig, demonstrationståg, radikalisering, rödvin, långt hår och en oförstående borgerlig föräldrageneration? Varför har till exempel ingen under de senaste decennierna frågat författaren och debattören Jan Guillou vad han har att har att säga om 1968 ? Erik Helmerson DN 28 oktober 2019 Många 68-or försöker skratta bort sina felsteg. Alla har väl varit unga och radikala, ha, ha, ha. I Kambodja skrattar man inte åt sådana skämt. Inte heller i Kina, där man upplevt Kulturrevolutionen. Inte heller i Östeuropa. Men i TV-soffan skrattas det lite generat och programledaren ler förstående. Om 1968 hos IntCom

Almost 70pc rejected the two great parties of the German post-War era.

The vote is arguably a displaced revolt against the hegemony of Germany’s export elites and against an Ordoliberal economic regime that has pauperised a fifth of the population and led to the country’s worst inequality in modern times. The Social Democrats (SPD) collapsed to 8.2pc. Call it delayed revenge for the SPD’s embrace of austerity, its complicity in 15 years of wage compression, and its role in the Hartz IV reforms that have left a Lumpenproletariat of 7.8 million people on “mini-jobs” of €450 a month. What is clear is that Germany has reached an economic and political dead end under the perennial Merkel coalition.  Ambrose Evans-Pritchard 29 October 2019

Mario Draghi leaves Europe near recession, in a deflation trap – and out of ammunition

The cut in interest rates to minus 0.5pc takes monetary union into treacherous waters. Academic literature suggests this may already be hitting the "reversal rate" where it does more harm than good.  It is harder for insurers to match their liabilities. It erodes the net interest margin for banks and is slowly destroying the business model of the small German savings banks that provide 90pc of credit to the Mittelstand family firms. Ambrose Evans-Pritchard 24 October 2019

The IMF’s second chance in Argentina

Last year, Mr Macri went to the IMF. The two parties contracted to lock in the very policies that had caused the crisis in the first place, under a $57bn rescue package, the largest in the IMF’s history. The IMF should take more seriously its own research on the role of fiscal policy and the management of capital flows. It shows that austerity policies have a negative impact on economic growth and employment, as admitted by Olivier Blanchard, the IMF’s then chief economist, and consequently on the fiscal accounts. FT 28 October 2019 Argentina: how IMF’s biggest ever bailout crumbled  

Britain and Russia

Both countries will continue to worry about the EU’s collective power.  As nations on the periphery, they have traditionally feared the rise of a single power dominating the European landmass — which partly explains why they ended up as allies in the Napoleonic wars and the two world wars.  Each country has built its modern identity around the memory of victory in 1945.  And both are shaped by nostalgia for imperial power. Gideon Rachman FT 28 October 2019

S&P 500 hits record as earnings reports signal a recession is nowhere near

CNBC 28 October 2019

Noted bear Albert Edwars earns our chart of the day

Graph showing how earnings have diverged from the S&P 500  to a degree not seen since, yes, 2000. What does this mean? “Carnage awaits,” Edwards wrote T here is no “carnage” yet, as investors appear to be in the buying mood. MarketWatch 28 October 2019 More about Albert Edwards at IntCom

US Federal Reserve stopped its quantitative easing

After a full decade of providing “emergency stimulus measures” the US Federal Reserve stopped its quantitative easing program (aka, printing money) a few years back. But that cessation was meaningless. Because the European Central Bank (ECB) stepped right in to take over the Fed’s stimulus baton and started aggressively growing its own balance sheet — keeping the global pool of new money growing. Chris Martenson October 18, 2019 The defense of the euro gave us negative interest rates Rolf Englund 21 August 2019

Germany’s constitutional balanced budget rule

- I would classify it as the single most stupid economic policy decision taken by a G7 country in my lifetime.  It artificially constrains the ability of fiscal policy to stabilise the economy at a time when monetary policy has hit the limits.  Wolfgang Münchau FT 27 October 2019

Det LitterärIndustriella komplexet

Jag inmutar nu detta begrepp. Det skrivs en massa romaner och andra böcker som det skall skrivas och kommenteras om. Detta skapar jobb och inkomster och social status åt många människor som hade kunnat göra något mer samhällsnyttigt. Ofta försörjs de av skattepengar. Flaggskeppet är givetvis Babel . Se även Det Militärindustriella komplexet

Margaret Thatcher biography by Charles Moore

She articulated very widespread national feelings. She articulated them harshly, but she represented the zeitgeist when she said there was no alternative to confrontation with politicised trade unions. These were her strengths: the capacity instinctively to understand what a great swath of the British people wanted done, and then the courage to do it when others didn’t dare. William Waldegrave FT 25 October 2019 Mrs. Thatcher

Year of the Amandas

Amanda Sokolnicki är chef för ledarredaktionen på DN AMANDA STOKER Senator for Queensland Amanda Lind Kultur- och demokratiminister samt minister med ansvar för idrottsfrågorna Jo Swinson elected new Liberal Democrat leader Hon heter inte Amanda, men ändå

Mervyn King's analysis of the “Great Stagnation”

Policymakers like to congratulate themselves on how they avoided the mistakes of the Great Depression during the Global Financial Crisis We have not really addressed any of the fault lines at the heart of our economies and financial system. The low interest rate environment has given rise to a desperate search for yield, setting us up for renewed financial crisis. Larry Summers resurrected the term “secular stagnation” six years ago King’s big point is that there has been an intellectual failure at the heart of the policy response to low growth. We’ve seen it as just another Keynesian downturn, only worse, that can be treated using tried and tested, countercyclical fiscal and monetary means. As so often with analysis of this sort, King is good at articulating what’s wrong with the global economy, not so good when it comes to solutions. Jeremy Warner 22 October 2019 Secular Stagnation Money, Banking and the Future of the Global Economy, by Mervyn King.  Review by John Pl

Four books on 1989 and its impact

1989. On June 4, the day when Poland’s patriotic trade union movement Solidarity swept to an overwhelming victory over the Communist party in semi-free elections Tony Barber FT 17 October 2019 No. 303 (Polish) Fighter Squadron

Helicopter Money the problems have little to do with economics and everything to do with politics and institutions

John Authers Bloomberg 18 oktober 2019  The Case For People’s Quantitative Easing by Frances Coppola

Low interest rates fuel financial risk-taking, IMF warns

“Accommodative monetary policy is supporting the economy in the near-term, but easy financial conditions are encouraging financial risk-taking and are fuelling a further build-up of vulnerabilities in some sectors and countries,” the IMF said. FT 16 October 2019 IMF fears the world's financial system is even more destructive than in 2008 We will have to be very creative if any of the IMF’s dark fears come true. Ambrose Evans-Pritchard Telegraph 16 October 2019 IMF Global Financial Stability Report

Bill Gross Bill Gross at IintCom

Drygt två miljoner utrikes födda i Sverige

19 procent av Sveriges befolkning  SvT 15 oktober 2019

In the end, then, Mr Tsipras morphed into the kind of leader Brussels wanted him to be.

A harrowingly detailed tale of incompetence and intransigence in the Greek debt crisis The Last Bluff, by Viktoria Dendrinou and Eleni Varvitsioti FT 14 October 2019

Climate change: Big lifestyle changes are the only answer

BBC 11 October 2019

What the heck is happening in the Cayman Islands?

Almost 20 per cent of banks’ cross-border dollar funding is now supplied by entities based in the Cayman Islands Gillian Tett 10 October 2019

Goldman Sachs alumnus Raoul Pal says the third biggest issue facing stocks involves the baby boomers, Americans born between the mid 1940s and mid 1960s.

They face an annual requirement to sell about 5% of their individual retirement accounts, loaded with stocks in some cases, as they reach 70.5 years old. MarketWatch 10 October 2019 Babyboomgenerationen kan komma att hålla ned börskurserna i två decennier framåt. Det spås bli följden när en åldrande befolkning säljer sina aktieandelar för att finansiera pensionen. Varningen kommer från Federal Reserve Bank of San Francisco

In theory, eurozone member states, being monetary sub-sovereigns, should perform the fiscal stabilization function.

But in practice, they do not, either because they are restricted by the quasi-constitutional rules of the EU’s “fiscal compact,” or because their vulnerable public-sector finances leave them constrained by debt markets.  Hans-Helmut Kotz, a former member of the executive board of Deutsche Bundesbank, Project Syndicate 10 October 2019

There is a whiff of the Brezhnev era about the long cautious reign of Angela Merkel.

“If you compare us with southern Europe or Italy we look fantastic. Compared to the Nordics we don’t look so good at all,”said Marcel Fratzscher, president of the German Institute for Economic Research in Berlin (DIW) and author of The Germany Illusion. Ambrose Evans-Pritchard Telegraph 9 October 2019

Why do economists continue to get it so wrong? Lucas

Five years before the financial meltdown of 2008, Robert Lucas famously declared that “the central problem of depression-prevention has been solved . . . and it has been for many decades”. Lucas, whose Chicago School housed the high priesthood of mathiness, won a Nobel Prize for his rational expectations theory. It demonstrated that the market was always right. “Policymakers at the start of 2019 seem to be just as out of touch with what is going on outside the big cities as they were as the great recession was nearing,” writes Blanchflower. The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society, by Binyamin Appelbaum Not Working: Where Have all the Good Jobs Gone?, by David Blanchflower Capitalism, Alone: The Future of the System That Rules the World, by Branko Milanovic Edward Luce FT 9 October 2019 Economic theory discredited

Former ECB Chief Economist Peter Praet appealed for calm

The memorandum  raised alarm over the longer-term impact of negative interest rates and alleged the institution is financing governments with its bond-buying program -- a move that’s forbidden by European Union law. Bloomberg 9 October 2019 Former central bankers attack ECB’s monetary policy

Buying 30-year German debt at a sub-zero yield looks like an odd trade at the best of times.

If you expect the ECB to get anywhere near its target over the next three decades, it looks downright foolish. FT 8 October 2019

The hardest job for the ECB’s incoming boss will be explaining to Germany why it should back monetary - and fiscal - stimulus.

In the 1990s, selling the Germans on the euro was hard. Even if they vaguely liked the idea of Europe’s “ever closer union,” they loved their D-Mark even more. That’s because they trusted Germany’s arch-conservative central bank. As Jacques Delors, a Frenchman and former president of the European Commission, once put it: “Not all Germans believe in God, but they all believe in the Bundesbank.” Bloomberg 8 October 2019 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

Central bank stimulus is distorting financial markets, BIS finds

the full consequences were unlikely to become clear until major central banks started to shrink their balance sheets. FT 7 October 2019 BIS committees release two major reports on unconventional policy tools BIS

The ECB president deserves all the plaudits for saving the euro, but ....

the “doom loop” between large banks and sovereign debt hasn’t gone away. Marcus Ashworth Bloomberg 7 Occtober 2019

Negative rates also destroy the stability of pension and insurance funds.

If negative rates cause the next crisis by distorting capital allocation and encouraging unmanageable levels of debt, central bankers will discover that the real danger is to them personally.  The whole idea that they are politically independent good guys will come tumbling down. Merryn Somerset Webb FT 4 October   The writer is editor in chief of MoneyWeek

Former central bankers attack ECB’s monetary policy

“As former central bankers and as European citizens, we are witnessing the ECB’s ongoing crisis mode with growing concern,” said the memo that was signed by several German, Austrian, Dutch and French former central bankers including Jürgen Stark and Otmar Issing, who both worked as ECB chief economist. FT 4 October 2019 The extraordinary salvo from six eminent European former central bank mandarins against the European Central Bank’s ultra-loose monetary policy earlier this month is too easily dismissed as the work of tired hawks protecting the interests of rich northern Europeans. John Plender 15 October 2019 About Otmar Issing ar IntCom


Costa-Gavras film fails to thrill Greeks angry with Varoufakis

‘Adults in the Room’ is a rare attempt to make artistic sense of the financial crisis FT 4 October 2019

The greater fool theory is at work in the bond market

Both sovereign and corporate borrowers are raising money at negative rates of interest.  Buy on the assumption that the central banks will play the role of the greater fool through their asset purchasing programmes, thereby providing a profitable exit from a profoundly unattractive investment. John Plender FT  30 September 2019

Svag krona? Stark dollar.

zero hedge 1 October 2019 About USD at IntCom

The primacy of fiscal policy is the new global orthodoxy in a deflationary world

The primacy of fiscal policy is the new global orthodoxy in a deflationary world where $17 trillion of debt is trading at negative yields and central banks are deemed – rightly or wrongly – to be exhausted. The canonical case was spelled out in Olivier Blanchard’s prize lecture to the American Economic Association earlier this year. “Put bluntly, public debt may have no fiscal cost,” he concluded. Rarely has an academic paper of this kind gone viral so instantly Ambrose Evans-Pritchard Telegraph Newsletter 1 October 2019

Central banks push for action on Europe’s rising house prices

Frustration at governments’ reluctance to introduce mortgage safeguards FT 1 October 2019