Englund

Brexit is not about trade, and nor are the details of customs clearance or rules of origin as important as we keep being told. They are not trivial but they are second order issues. The elemental question is who runs this country. Do we wish to be a self-governing democracy under our own courts, or a canton of a higher supra-national regime that keeps acquiring more powers – beyond its ability to exercise them competently – through the Monnet Method of treaty creep?  Ambrose Evans-Pritchard Telegraph 29 January 2020 Jean Monnet

By the end of the century, the UN expects Africa’s population to be 4.3bn (and still growing), versus 4.7bn in Asia (having peaked at 5.3bn in 2055). FT 30 January 2020 Tänk på ett tal. Multiplicera det med 10 miljarder - jordens befolkning 2050

men i takt med att magnetkameratekniken växte fram såg man att det skedde långt senare, först i 25–30-årsåldern. SvD 15 januari 2020 Battle of Britain Aldrig har så få hyllats så länge 2900 unga män, medelåldern var 22 år Dan Lucas, DN print sidan 31, 21/8 2010

Att rumänska ”sjuksköterskor” får jobba i Sverige hotar hela EU-bygget Det där om en allt ”närmare union av folk” till tonerna av Beethovens nia?  Jag ville så gärna tro på det. Barbro Hedvall DN 27 januar i 2020   Vad vill européerna? Och finns de över huvud taget? Så grundläggande är de frågor som behöver få ett svar efter folkomröstningarna i Frankrike och Nederländerna Barbro Hedvall signerat DNs ledarsida 9/6 2005

In late 1998, the ECB adopted its first inflation targeting regime. Four years later, it modified it to an annual inflation rate of close to, but below, 2 per cent. The ECB’s research staff have recently published a fascinating 300-page working paper  The surprise result was that the effect on inflation was smaller than previously thought, but the impact on economic growth larger. Wolfgang Münchau FT 26 January 2020 Did inflation targeting fail? Central banks have mostly escaped blame for the crisis. How can it have gone so wrong? Martin Wolf, Financial Times, May 5 2009 Riksbankens mål om 2,0 procents inflation tillkom i all hast för litet mer än 20 år sedan Inflationsmålet skulle inte ha funnits där, om Sverige hade klarat att hålla fast växelkurs. Johan Schück, DN 2015-05-08

and acknowledged that the side-effects of ultra-low interest rates and quantitative easing are becoming more treacherous.  Mrs Georgieva said global debt has mushroomed to $188 trillion but even this has still failed to lift the major economies from the deflationary danger zone.  Much of the stimulus has leaked out into asset markets and fed an indiscriminate hunt for yield.  Ambrose 24 January 2020 ECB: We Cannot Resolve the Next Financial Crisis! Central Banks Are TRAPPED. The Money GPS

In a new paper (hat-tip to the University of Washington’s Fabio Ghironi for drawing our attention to it), Nobel Prize winning economist George Akerlof does a brilliant job of explaining how and why, in the decades before the financial crash, macroeconomists failed to include any meaningful role of the financial system in their economic models. John Maynard Keynes’ “beauty contest” theory of market behaviour, which helps explain why asset prices become unmoored from economic fundamentals due to people allocating their wealth partly based on what they think others will value, rather than what they themselves do.  FT Alphaville 5 November 2019 What They Were Thinking Then: The Consequences for Macroeconomics during the Past 60 Years George A. Akerlof

Blomberg 23  January 2020

Wuhan may not be a well-known Chinese mega-city like Beijing or Shanghai. But the place where the coronavirus outbreak emerged is, in fact, a crowded metropolis with connections to every part of the globe. According to UN data from 2018,  8.9 million people live in the central Chinese city  - making it slightly smaller than London, but much bigger than Washington DC. BBC 22 January 2020

Humans have an amazing ability to postpone the inevitable and—when the subject is debt—a financial incentive to do so. That’s true for both borrowers and lenders. Hyman Minsky showed how stability leads to instability. Humans have a way of reinterpreting stable periods that seemingly redefines words like reasonable, manageable, and prudent. That’s why we continue chasing yield and risk until we go too far. John Mauldin 10 January 2020 Minsky

Banca Monte dei Paschi di Siena SpA took another big step in its long path to redemption last week by selling subordinated debt for the second time in six months.  An 8% coupon is expensive for the world’s oldest bank, but it can hardly complain given its years of troubles. Bloomberg 20 Januaruy 2020 https://www.bloomberg.com/opinion/articles/2020-01-22/italy-prepares-itself-for-prime-minister-matteo-salvini?srnd=premium-europe

ECB’s worst policy mistakes: the decision to raise rates twice in 2011, when the euro zone economy was slowing at the start of the sovereign debt crisis.  Ferdinando Giugliano Bloomberg 20 januari 2020 

West African Economic and Monetary Union (WAEMU) are hoping to see a new common currency in place this year. The six anglophone countries in the 15-member Economic Community of West African States (ECOWAS) want to adopt the new currency on a slower timetable and as a new currency for the whole region, not just as a replacement for the CFA franc. CFA franc is pegged at a fixed exchange rate to the euro, and the existing agreement maintains this arrangement for the eco, CNBC 17 January 2020

If debts are not to be reneged upon, they must either be repaid or somehow refinanced.  However, not only is much of the new debt taken on since the 2008 financial crisis unlikely to be paid back but, more worryingly, it is compounding ever higher. Our latest estimates suggest that world debt levels now exceed $250tn, equivalent to a whopping 320 per cent of world gross domestic produc We know from experience that liquidity-fuelled asset markets usually end badly So remember what former Citigroup chief Chuck Prince said about “still dancing”, on the eve of the 2008 crash. Enjoy the party, yes. But dance near the door. Michael Howell FT 16 January 2020 “As long as the music is playing, you’ve got to get up and dance.” https://www.internetional.se/citiskulder.htm#dancing

MetOffice Youtube

”Varje gång någon uttrycker att vi borde lämna Krimfrågan bakom oss, måste vi fråga: vill vi verkligen ha prejudikatet att ’den som annekterar en del av ett annat land, får under några år utstå sanktioner och fördömanden, men sedan blir allt som förut’? Vad innebär det för vår egen säkerhet?” Tove Lifvendahl SvD 14 januari 2020 Farligt om Sverige rustar mot gårdagens hot Elisabeth Braw liknar den traditionella hotbilden vid en mugg med uppvärmd soppa. Den är trygg och bekväm att hålla fast vid i en snabbt föränderlig värld. - Det är lättare att förlita sig på det som man redan känner till och fortsätta räkna på antalet ryska korvetter. Anna Dahlberg Expressen 11 januari 2020  The leaders of Russia, Ukraine, France and Germany are to meet next month for the first time in more than three years in an effort to revive the stalled international effort to end the conflict in Ukraine, according to Paris and Kyiv.  Financial Times 19 November 2019 Crimean War

This dramatic policy turnaround was particularly curious in two ways.  First, it materialized despite growing discomfort – both within and outside central banks – about the collateral damage and unintended consequences of prolonged reliance on ultra-loose monetary policy.  Second, the dramatic reversal was not a response to a collapse in global growth, let alone a recession.  Rather than acting on clear economic signals, the major central banks once again succumbed to pressure from financial markets. Mohamed A. El-Erian, Project Syndicate 9 January 2020

The new orthodoxy is that spending à l’outrance can step into the breach without insidious consequences. What is more enticing than the notion that highly-indebted G7 states can defeat secular stagnation – or the “long-dragging conditions of semi-slump”, as Keynes described the 1930s – by borrowing unlimited sums in perpetuity at near-zero cost?  Ambrose Evans-Pritchard Telegraph 13 January 2020 The point is not to show that the IMF is a bad forecaster. It is, rather, to illustrate that even teams of very good economists can get forecasts of macroeconomic variables grossly wrong under certain conditions.  The idea that confidence can be a driver of growth, and that a lack of confidence can throw a country into crisis, played a key role in the origins of macroeconomics. John Maynard Keynes famously wrote about “animal spirits” in chapter 12 of his General Theory. https://www.ft.com/content/998cc79c-d8c5-4401-a3f9-7f13673952fd

In 2012 eurozone leaders vowed to break the “doom loop” by which national governments and their banking systems could drag each other down in a financial crisis.  This began the long journey towards a banking union in which taxpayers would no longer be on the hook for failing banks. Had the leaders fully understood what they were signing up for, they may not even have started.  Rome wants a ‘package deal’ that includes common deposit insurance scheme Martin Sandbu FT 13 January 20 20

FT 8 January 2020

I maj 1980 besökte Palme Iran, som sedan den Islamiska revolutionen 1979 styrdes av en regim ledd av Ruhollah Khomeini, under ett tvådagarsbesök tillsammans med Österrikes förbundskansler Bruno Kreisky och den spanske socialistledaren Felipe González.[31]  Efter hemkomsten höll Palme en presskonferens i riksdagen där han berättade om sina intryck från resan. Palme sa då bland annat att Khomeinis regim "med pedantisk noggrannhet försöker bygga upp sina demokratiska institutioner". https://sv.wikipedia.org/wiki/Olof_Palme Åter i rampljuset SvD ledarre 1980 

OFR says a big chunk of the $2.4 trillion leveraged loan market is being packaged into collateralised loan obligations (CLOs) The fears of central bankers were confirmed: they cannot exit emergency monetary policy. Dodd-Frank legislation prevents the Fed from carrying out the very rescue actions that saved the financial system in 2008. Ambrose Evans-Pritchard Telegraph 1 January 2020