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2020-07-31

One can argue that the global dollar system of the last half a century is in its death throes. MMT

There are echoes of the early 1970s when a compliant Fed accommodated the fiscal overreach of the Vietnam War and the Great Society, culminating in the inflationary collapse of the Bretton Woods system.

There must be a powerful temptation to dabble in Modern Money Theory and to start injecting QE stimulus directly into the veins of the US economy. 

Indeed, I am sure this will eventually happen.



2020-07-30

Gillian Tett - en av mina Gurus

Gillian Tett is chair of the editorial board and editor-at-large, US of the Financial Times. She writes weekly columns, covering a range of economic, financial, political and social issues.

In 2014, she was named Columnist of the Year in the British Press Awards and was the first recipient of the Royal Anthropological Institute Marsh Award. 

In June 2009 her book Fool’s Gold won Financial Book of the Year at the inaugural Spear’s Book Awards.

Tett’s past roles at the FT have included US managing editor, assistant editor, capital markets editor, deputy editor of the Lex column, Tokyo bureau chief, and a reporter in Russia and Brussels.

 Se även om henne på min website






ETFs are the canary in the bond coal mine - Tett

Even in good times “liquidity in corporate bond markets appear[ed] less robust” than before, as a report from BIS notes; in bad times, activity might freeze, it was feared.

So what actually happened in the Covid-19 market test? The Cassandras were partly right: in early March, the market for corporate bonds did indeed freeze

On March 23, the Federal Reserve took dramatic action to halt the freeze in corporate credit, announcing big purchases of company bonds.








Watch these 5 endangered UNESCO sites get digitally restored

https://www.cnbc.com/2020/07/30/watch-5-unesco-sites-get-digitally-restored-in-a-matter-of-seconds.html

2020-07-29

Jag /Carl Bildt/ var statsminister under dessa år och fast övertygad om fördelarna med en hårdvalutapolitik.

 Det hade delvis att göra med de tidigare decenniernas erfarenhet av devalveringspolitik, men var delvis en konsekvens av att jag strävade efter att Sverige skulle gå in i det europeiska samarbetets kärna, också den ekonomiska och monetära unionen, och därmed vara med i den gemensamma europeiska valutan från dess första dag.

Försvaret av kronan handlade om den viktiga kombinationen av ekonomisk politik och Europapolitik.

Ur Carl Bildts veckobrev v1/2002


IMF expects the US current-account deficit to hit 2.6% of GDP in 2020

Notwithstanding a strong political commitment to European unification as the antidote to a century of war and devastating bloodshed, there was always a critical leg missing from the EMU stool: fiscal union.

Not anymore. 

The historic agreement reached on July 21 on a €750 billion ($868 billion) European Union recovery fund, dubbed Next Generation EU, changes that – with profound and lasting implications for both an overvalued US dollar and an undervalued euro.

My prediction of a 35% drop in the broad dollar index is premised on the belief that this is just the beginning of a long-overdue realignment between the world’s two major currencies.

IMF expects the US current-account deficit to hit 2.6% of GDP in 2020, the EU is expected to run a current-account surplus of 2.7% of GDP

Stephen S. Roach Project Syndicate 22 July 2020


SCB: Sveriges bytesbalans som andel av BNP uppgår det första kvartalet 2020 till 4,6 procent



Några av mina tidigare artiklar om EU och EMU

Kanske kan det komma till någon nytta.

https://www.internetional.se/emurolf.html


Inget land har tjänat mer på euron än Tyskland

Tyskland är numera i praktiken en stor exportfabrik med Kina som främsta marknad och en kraftigt undervärderad valuta som huvudsakligt smörjmedel.

Om valutaunionen sprack och D-marken återinfördes i morgon, skulle den rusa och exporten rasa. 
(I södra Europa skulle motsatt sak ske.)

I  den svenska debatten, som gärna uppehåller sig vid självtillräckliga moralismer och dessutom lider av dålig research.

I den är tyskar nästan alltid strävsamma, italienare oftast slappa, transfereringar orättvisa och förresten borde EU lyssna mer på Sverige.

Expressen 28 juli 2020


Powerful weapons gather dust in the eu’s legal gun-cabinet.

Officials pointed to a vaguer article declaring that the eu has the right to “provide itself with the means necessary to attain its objectives and carry through its policies”.

It is a small foothold for the creation of a de facto federal deficit, which is probably the eu’s biggest constitutional leap since the creation of the euro.

Changing the union’s legal order would require a wave of referendums across Europe, which have tended not to end well from the eu’s perspective. 

https://www.economist.com/europe/2020/07/23/why-the-eu-is-becoming-more-like-a-chekhov-play

Det finns skälig anledning misstänka att regeringen och riksdagen, särskilt dess talman och ordföranden i KU har begått minst ett brott mot grundlagen.

https://www.internetional.se/emurolf.html#egomaj




Polen stoppade bolsjevikernas marsch mot Europa 1920

After several skirmishes with Russian troops in the blurred border areas, Polish along with some nationalist Ukrainian fighters captured Kyiv in the spring of 1920. 

It was not a popular move. British Prime Minister David Lloyd George remarked, "The Poles are inclined to be arrogant and they will have to take care they don’t get their heads punched."

Radio Free Europa 26 July 2020

Polish leader Josef Pilsudski

2020-07-28

Sartre’s behavior during the occupation

though he was never a collabo, was less heroic than his immediate postwar views might suggest.

Alan Riding, whose judgment of the French intelligentsia under occupation is neither moralistic nor indulgent, places Sartre very much on the periphery of the resistance. 

Sartre’s plays, such as Huis Clos (No Exit), were read by some admirers (and certainly by Sartre himself, in hindsight) as veiled expressions of anti-Nazi protest. But they were passed without problem by the German censors, and German officers were happy to attend first nights, as well as the postperformance parties.

And the Show Went On: Cultural Life in Nazi-Occupied Paris by Alan Riding


Det fel som kollaboratörerna begick, säger Jean-Paul Sartre i en berömd och tänkvärd uppsats frän 1945, bestod inte så mycket i att de sympatiserade med de tyska ockupanterna, utan snarare i att de betraktade kampens utgång som given.

(Jag minns inte källan för detta citat. Om någon har det, vänligen informera mig.)


Det kan nog vara en förklaring till att så många ställer upp på EUs sida. Likt Tyskland i början av kriget framstår Europeiska Unionen i dag för många som framtidens segrare.

När och hur spricker EMU?








2020-07-27

The European Union's new €750 billion recovery fund... But money cannot solve the problem of distorted relative goods prices within the eurozone.

In essence, this is a competitiveness crisis brought about by the distortion of relative prices within the eurozone, which is a result of inflationary overpricing in Southern European countries. 

This overpricing, in turn, stemmed from the flood of capital that entered these economies after they joined the euro.

And now COVID-19 has triggered another phase of capital flight that eclipses all the others.

Hans-Werner Sinn Project Syndicate 24 July 2020


Hans-Werner Sinn, Professor of Economics at the University of Munich, was President of the Ifo Institute for Economic Research and serves on the German economy ministry’s Advisory Council. He is the author, most recently, of The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs.

Apple, Amazon and Microsoft together are now valued at nearly $5 trillion

These three stocks, in terms of free cash flow, are well more than three standard deviations above their average

John Mauldin 24 July 2020

Apple Removed From JPMorgan Focus List

Apple shares have climbed nearly 31% over the past three months

Bloomberg 27 July 2020


Italy warns of autumn funding crisis

The EU Recovery Fund was not designed for immediate liquidity problems  

Brussels says the first tranche of grants will not be disbursed until next June, although a small advance might be possible. 

Cheap loans will not be available until 2024.

Ambrose Evans-Pritchard Telegraph 26 July 2020



Den stärkta kronan innebär ytterligare dråpslag för den redan pressade exportindustrin

Det säger Lena Sellgren från Business Sweden.

SvD 27  juli 2020




Dollar sinks to two-year low on concern over US virus toll

FT 27 July 2020

Återhämtningsplanen är till för att rädda euron och då borde EU-länder som Sverige och Danmark inte vara skyldiga att delta

Det var samma ekonomiska och politiska felbedömning som när detta etablissemang gick in med enormt mycket pengar och personella resurser för att förmå svenska folket att rösta ja till EMU i folkomröstningen 2003.

Försöket misslyckades totalt och idag är det mycket få som tror att detta var ett bakslag för Sverige. 

Rune Andersson, Carl Bennet, Per-Olof Eriksson och Nils Lundgren SvD 26  juli 2020


Medborgare mot EMU

När jag skriver detta ramlar jag på det här, som tål att upprepas.

Jag tror att om den politiska viljan finns går det att precis som för penningpolitiken skapa en väl fungerande ordning också för finanspolitiken och den nationella stabiliseringspolitiken. Det gör det också enklare för mig att ha en positiv inställning till ett svenskt deltagande i EMU.

Urban Bäckström DN Debatt 8/12 2002

RE: Det borde vara svårt för honom, enär riksbankens nuvarande ledning  ännu inte har uttryckt någon åsikt om huruvida de har en negativ eller positiv inställning till ett svenskt deltagande i EMU.

Vad jag förstår överskrider han sina befogenheter, vilket garanterar honom ett bra reträttjobb nu när han snart är arbetslös.


1994–2002 Riksbankschef

2003–2005 VD, Skandia Liv

2005–2014 VD, Svenskt Näringsliv




2020-07-24

The Dodd-Frank financial law succeeded at making banks safer, but empowered shadowy corners of finance that nearly wrecked the system in March.

To head off a devastating downward spiral, the Federal Reserve came to Wall Street’s rescue for the second time in a dozen years. 

As investors sold a vast array of holdings and rushed to the comparative safety of cash, the Fed pledged to become a buyer of last resort to restore calm to critical markets.

NYT 23 July 2020





We are still on track to challenge all-time highs over the next few weeks

De coronapengar som ska strös över de hjälpbehövande har egentligen Italien som adressat

ett land som alldeles på egen hand skulle kunna störta euron i fördärvet och omgående dra med sig andra i Sydeuropa så att den raskt förvandlas till en skvalpvaluta alla vore lockade att försöka ta sig ur. 

Vad som då blir kvar av EU vore snart en mer teoretisk än praktisk fråga.

Till sist lyckades Mitterrand se till att priset för återföreningen blev att tyskarna tvingades dela valuta med andra européer: så var man ombord på det tyska tåget, både som passagerare och bromsare. Helmut Kohl, då segerrusig och en övertygad europé, gick med på att offra D-marken, det finaste familjesilver tyskarna hade.

Paris har fått sin vilja fram. Tyskarna ska fylla på den italienska tanken i förhoppningen att det ska kickstarta Italiens ekonomi. 

Men varför skulle det gå nu när det inte gått förr? 

Richard Swartz DN 24 juli 2020



A profound shift is now taking place in economics as a result, of the sort that happens only once in a generation.

Budget constraints have gone missing. That presents both danger and opportunity

This new epoch has four defining features. 

The first is the jaw-dropping scale of today’s government borrowing

The second feature is the whirring of the printing presses.

The third aspect of the new age. Together the Fed and Treasury are now backstopping 11% of America’s entire stock of business debt.

The final feature is the most important: Low inflation is the fundamental reason not to worry about public debt

Yet the new era also presents grave risks. If inflation jumps unexpectedly the entire edifice of debt will shake

The Economist 23 July 2020

See also: https://www.economist.com/briefing/2020/07/25/the-covid-19-pandemic-is-forcing-a-rethink-in-macroeconomics


Stephanie Kelton - en av mina Gurus
The Deficit Myth:  Modern Monetary Theory

Englund 2020-07-19









2020-07-22

European federalists have more reason than frugal northerners to be pleased

The bloc has crossed the Rubicon of debt-financed deficit spending at union level. 

The frugals have not stopped the move towards more common fiscal policy. Their victory is mostly Pyrrhic.

As the frugals knew and feared, what can be done once can be done again. 

Martin Sandbu FT 22 July 2020





Europe will be “forged in crises,” said Jean Monnet, a founding father of what became the European Union.

These two competing narratives frame a central debate about the EU’s future. 

Bruegel, a Brussels think tank, caricatures them as 1) the bloc is being “hardened by adversity,” leading to perpetual integration, versus 2) the “sky is falling” for the EU, which causes its disintegration.

Does that mean the EU is fated to enter the fossil record, as many species have done before? 
Not necessarily, but possibly. 

Evolution is not about improvement toward some noble ideal but about adapting to reality.

Andreas Kluth Bloomberg 22 July 2020




Ambrose Evans-Pritchard - en av mina Gurus

Om sanningen skall fram betalar jag för Telegraph för att läsa honom.

Ambrose Evans-Pritchard is International Business Editor of The Daily Telegraph. 

He has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. 

He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels.



None of the grants will arrive until next year. The package is therefore useless as Covid disaster relief.

In the meantime the European Central Bank is holding the eurozone together by soaking up Italian, Spanish, Portuguese, and Greek debt issuance, though with the German Constitutional Court breathing down its neck. 

The Spanish coalition includes two Corybnista parties: Podemos and Izquierda Unida.

David Cameron was right about the Fiscal Compact. Events have shown that it is a deflationary doomsday machine.

(The fiscal compact – formally the Treaty on Stability, Coordination, and Governance in the Economic and Monetary Union - more here)

They always nudged forward the Monnet agenda by means of creepage, precedent, and the establishment of facts on the ground. 

The democratic consent for this erosion of sovereign national control was thinner than EU enthusiasts ever cared to admit.  




A big step towards fiscal federalism in Europe
When the euro was born everyone knew that sooner or later a crisis would occur.
It was also clear that the stability and growth pact was – as I have said before – “stupid”
Romano Prodi FT May 20 2010






DN: Ett ordentligt kliv i federalistisk riktning har tagits, sedan får folket tycka vad det vill om överstatlighet.

Syftet är primärt att rädda det skuldtyngda Italien

DN-ledare 22 juli 2020


2020-07-20

- EU präglas av ständiga förhandlingar om hur misskötta ekonomier ska få bidrag från välskötta ekonomier, skriver Gunnar Hökmark på hokmark.eu.

Hans text kan läsas här.

Misskötta? Hökmark låtsas inte förstå att Grekland, Spanien och Italien genom euron är inlåsta i ett brinnande hus. Hur skall de kunna förbättra sin konkurrenskraft mot Tyskland? 

Se mer om Brandförsäkringsargumentet.

- På samma sätt som EEC demoniserades i början av 1970-talet håller nu demoniseringen av den gemensamma valutan på att ta form. Den sägs leda till överstatlighet och federalism trots att sedlar som sådana inte leder till vare sig det ena eller andra, skrev Hökmark på SvD/Brännpunkt för länge sedan.

Men det vi nu ser är ett bevis för att gemensam valuta leder till ständig ökad makt till Bryssel, Frankfurt och Berlin. Mer om federalism här.


2020-07-19

The troubling bit is that these forecasts reveal a basic lack of understanding of the underlying inflation process.

Inflation targeting has been successful because it managed to anchor expectations — until it did not.

Behind the notion of inflation targeting lies a theoretical model.


Did inflation targeting fail?




Stephanie Kelton - en av mina Gurus

The theory is called Modern Monetary Theory (MMT)

We may be on the cusp of a revolution. What if everything we thought we knew about public finance over the past 40 years has been wrong?

/cusp: a point of transition (as from one historical period to the next) : TURNING POINT/

It is challenging the neoliberal economic orthodoxy that has dominated policymaking in Australia, the United States, the United Kingdom and many other countries since the mid-1970s.

They say the argument (promoted famously by British prime minister Margaret Thatcher) that national governments must tax or borrow before they can spend is wrong.

What's so special about fiat currencies?

MMT's theorists say world leaders still haven't come to terms with the demise of the Bretton Woods monetary system in 1971.

In a speech in 1997, then-US federal reserve chairman Alan Greenspan said central banks in the modern era could issue currency without limit.

https://www.abc.net.au/news/2020-07-17/what-is-modern-monetary-theory/12455806

The Deficit Myth: 
Modern Monetary Theory and How to Build a Better Economy by Stephanie Kelton  





Europe’s ‘Hamilton Moment’ Is a Flop. That’s Fine.

The American elite misunderstands Europe in a different way. The working assumption has long been that the EU is essentially a first draft of a United States of Europe. 

As the Chicago-born, Oxford-based political philosopher Larry Siedentop did in his 2001 book "Democracy in Europe." 

It has been a delusion not only of Americans but also of the most ardent pro-Europeans that the ultimate destination of the EU is to be the USE. 

Niall Ferguson Bloomberg 19 juli 2020 



2020-07-18

Efter finanskrisen 2008 måste kapitalismen återigen försvara sig från såväl höger- som vänsterkritik, förklarar historikern Niall Ferguson.

Om den liberala marknadsekonomin ska överleva måste den kombineras med sunda offentliga finanser, fungerande institutioner och ett starkt civilsamhälle

Axess 2020





Hur kan det komma sig att Eurons Ja-sägare, däribland Löfven,

tidigare ordförande för LO-s ja-sägare inför folkomröstningen, DN och Gunnar Hökmark med flera, är emot det paket som har till syfte att rädda Italien och euron?

Englund på Facebook 18 juli 2020





2020-07-17

Fed will attempt to push the inflate rate above its 2% target

Federal Reserve Bank of Philadelphia President Patrick Harker goes even further in a Wall Street Journal interview, saying 

“I don’t see any need to act any time soon until we see substantial movement in inflation to our 2% target and ideally overshooting a bit.”

Bloomberg 17 July 2020


Riktiga karlar är inte rädda för lite inflation

Som sig bör är det IMFs chefsekonom, Olivier Blanchard, som har tänkt först, more or less. Det har väckt viss uppmärksamhet att han har föreslagit att inflationsmålet bör höjas, från runt två till kanske runt fyra procent.




Federalister inom EU ser coronakrisen som en chans att utvidga sina domäner, trots att medborgarnas efterfrågan på mer överstatlighet är begränsad.

Sannolikt blir det svårt för Sverige, Nederländerna och deras allierade att i längden stå emot trycket från unionens tungviktare. 

Men det gäller att begränsa skadan.

DN 17 juli 2020

2020-07-16

2020-07-15

Yields on 10-year US Treasuries have not rebounded as you would expect if the economy is genuinely healing.

Futures contracts imply that yields will remain pinned to the floor until the mid-2030s and that the Fed will not come close to meeting its inflation target by the middle of the century.

Wall Street is being held up by a diminishing handful of equities. 

Microsoft and the FAANGs (Facebook, Amazon, Apple, Netflix, and Google/Alpahbet) added half a trillion dollars in capitalisation over the six trading days up to the end of last week.

Ambrose Evans-Pritchard 14 July 2020



Just as easy mortgages fueled economic growth in the 2000s, cheap corporate debt has done so in the past decade



2020-07-14

“We have highly priced markets in the stock market, the bond market and the housing market,” Shiller

“All of these markets could tumble in the coming months.”

Robert Shiller, Nobel Prize winning economist at Yale University, 

MarketWatch 14 July 2020

Apparently, investors believe that this boom is going to last, or at least that other investors think it should last

Robert J. Schiller Project Syndicate 24 september 2018


Robert J. Shiller explains the pandemic stock market and why it’s decoupled from the economy  



Etiketten ”svensk” eller ”europeisk” på en viss lösning är ingen garanti för att det innebär kloka förslag

Det skriver Carl-Johan Westholm apropå EU-kommissionens återhämtningsprogram.

 Övriga EU:s länder manas nu till att ställa upp med miljardsubventioner till främst Italien, som många anser har misskött sin ekonomi genom att inte ha hanterat följderna av den gemensamma valutan.

SvD 10 juli 2020


Jag (CJW)tillhörde dem som röstade nej, inte så mycket för att jag trodde att det skulle bli allvarliga konsekvenser av en gemensam valuta (där misstog jag mig) utan för att jag inte gillar tanken på Europas Förenta Stater.

Timbro har legat lågt i Europadiskussionen, liksom de flesta andra free market think tanks i Europa. Frågan är känslig, nästan icke-existerande.

EU-finansierade tankesmedjor öser däremot på med EU-entusiastiska projekt.

Maj 2013




2020-07-13

Ivestment gains since early 2017 have been completely dominated by Apple, Microsoft, Amazon, Alphabet GOOG and Facebook

Here’s what the Wilshire 5000, a market-capitalization-weighted gauge of all U.S. stocks, has done since January 2017, minus the Giant 5.

MarketWatch 13 July 2020

Kommentar av Englund:
Knapptryckarna i Stockholm brukar nära följa kurserna i New York.
Men Sverige har ju inte Apple och dom andra giganterna.


Dow





This financial system is light years away from the postwar model, where banks borrowed from retail depositors and lent to individuals and companies.

The chief source of funds is not deposits but repurchase agreements or repos, a form of borrowing that has to be backed by collateral in the form of “safe” assets such as government bonds.

About Capital Wars: The Rise of Global Liquidity, by Michael Howell

John Plender FT 13 July 2020



2020-07-10

Anders Borg, Barbro Hedvall och Göran Persson

 Sverige mötte alla tiders finanskris 2008 och klarade sig tack vare en erfaren och bestämd styrman, finansministern. Då hette han Anders Borg

Hans läge var också betydligt bättre än föregångarnas hade varit. Budgetsaneringen, som bär Göran Perssons märke, hade gjort Sverige starkare.

Barbro Hedvall DN 9 juli 2020


Göran Persson om 90-talet: Vi gjorde mycket fel, naturligtvis. 
Kanske borde vi ha sparat lite mindre.




Löntagarfonder i Socialistisk Politiks textarkiv

The leveraging of America: how companies became addicted to debt

FT Series The new social contract

The Federal Reserve pledged in April to buy trillions of dollars of debt, much of it owed by the corporate sector.

This is the second time in just over a decade that the Fed has mobilised the full force of its balance sheet to put a floor under creaking credit markets.

FT 10 July 2020



2020-07-09

Det fria näringslivets försvarare: Timbros tidiga historia


I början av 1960-talet lades Byrån för ekonomisk information ned i samband med att den drivande Tore Sellberg slutade. I stället satsade Fonden tillsammans med ett antal företag knutna till Wallenberggruppen på det som med tiden fick namnet Utredningsbyrån för samhällsfrågor.

Rikard Westerberg Smedjan 8 oktober 2018


BBVA sold a 1 billion-euro additional tier-1 perpetual note CoCos

CoCos are popular because they pay more interest than other debt, in exchange for investors being at the front of the queue to bear losses if the bank fails.

In this case the coupon was 6%.

Bloomberg 9 July 2020


Cocos on my website


2020-07-08

Jankowski’s All Against All and Robert Gerwarth’s November 1918

are two of the most stimulating histories of the interwar period to have been published in recent years.

Because we know that the period ended in the most destructive war in history, it is tempting to conclude that this outcome was foreordained in events 10 or 20 years earlier. 

Such determinism often comes with an assumption that there was something inevitable about the collapse of Germany’s democratic Weimar Republic


Heinrich Brüning Popular mythology in Germany has it that the Weimar hyperinflation of 1922-23 led directly to the rise of Hitler. 



Europe's great stimulus plan is little more than political theatre

The IMF has slashed its forecast for 2020 yet again to -12.2pc for France, and -12.5pc for Italy and Spain

Gita Gopinath, the IMF’s Indian chief economist, drew up these figures after the outlines of the EU’s Next Generation Recovery Plan were already known, so clearly she does not believe the "game-changer" rhetoric.

Ambrose Evans-Pritchard 8 July 2020



Expend and pretend - Banks need to prepare now for Covid-19 losses later

Many European banks adopted an “extend and pretend” approach, and even before coronavirus were still suffering depressed valuations.

FT 8 July 2020



Give them more time, hoping things improve and they can repay later.
Banks call it a wise strategy. Skeptics call it "extend and pretend."


What if water shortages destabilise China?

The painfully unequal distribution of water in China reawakens intra-regional resentments not seen in decades. 

An imagined scenario from 2050

The Economist 4 July 2020


2020-07-07

Italy’s 10-year bond yields are now higher than Greece’s — not exactly a sign of confidence from investors.

The European Union’s political leaders will meet next week to negotiate the details of their joint fiscal response to the Covid-19 crisis.

The Netherlands has emerged as the main villain opposing the plan

Bloomberg 7 July 2020

Robert J. Shiller explains the pandemic stock market and why it’s decoupled from the economy

Possible explanations based on crowd psychology, the virality of ideas, and the dynamics of narrative epidemics.

After all, stock-market movements are driven largely by investors’ assessments of other investors’ evolving reaction to the news, rather than the news itself.

MarketWatch July 7, 2020 


Chart Wall Street 2015-2020

They’re reverting to their only playbook -- the past. It’s a technique that showed its age in March, when the fastest plunge ever turned into the quickest 50-day advance in nine decades, a rally those with a historical bent said was doomed.

Now, with momentum back, history supposedly shows the gains are here to stay.

Bloomberg 7 July 2020


Larry Kudlow, Krugman about

Larry Kudlow is, of course, the chairman of the National Economic Council, in effect Trump’s chief economist. He’s also famous among those who follow such things for his remarkable track record of being wrong about everything, from his dismissal of those warning about a housing bubble as “bubbleheads” to his declaration a few months ago that the coronavirus was completely contained and wouldn’t inflict any economic damage.
Now, all of us get things wrong sometimes. But Kudlow is in a class of his own; as New York magazine’s Jonathan Chait memorably put it, he “has elevated flamboyant wrongness to a kind of performance art.” 
And he’s also notable because his solution to all problems is the same: cut taxes on rich people and corporations.
Paul Krugman NYT 7 July 2020

Olivier Blanchard, former chief economist at the IMF and doyen of the global Keynesians.





“Stocks are [behaving] very much like that rebound in 1929

where there is absolute conviction that the virus will be under control and that massive monetary and fiscal stimuli will reinvigorate the economy,” he said, adding that the market could drop as much as 40% over the next year.

 A. Gary Shilling again delivering a gloomy take on what’s next in a recent CNBC interview.

MarketWatch 6 July 2020

- I am convinced that the housing bubble is gigantic and will burst before long with massive implications here and abroad. In fact, it's the key to the global economic outlook.



Caveat. Ära vare Gud i höjden. Detta har jag gjort i slöjden.


When things cannot go on forever, they stop. And so it is with China’s support of the US dollar.

Foreigners sold more than $500bn of US government bonds during the second quarter, and perhaps one-third of that was unloaded by Chinese entities. The trend is worth watching.

Ever since 2001, when China was allowed unfettered entry into the World Trade Organization, the country has played a huge behind-the-scenes role in pushing up the value of the US currency and suppressing US bond yields.



“Stein’s law” If something cannot go on forever, it will stop.



Departing eurogroup chief warns against post-pandemic rush to reinstate fiscal limits

Brussels took the unprecedented move to suspend the application of its “stability and growth pact” at the onset of the crisis, a move designed to avoid punishing countries for their stimulus efforts. 

But the slow return to normality has revived calls for a fundamental rethink of the rules which have been a source of constant tension between Brussels and eurozone capitals in recent years.

FT 7 July  2020


A big step towards fiscal federalism in Europe
When the euro was born everyone knew that sooner or later a crisis would occur.
It was also clear that the stability and growth pact was – as I have said before – “stupid”


2020-07-06

Den sköraste tråden: ett fallfärdigt Italien

Nicholas Nassim Taleb, The Black Swan Mauldin

We knew pandemics happen and can have big consequences. No one knew in 2019 one was coming in 2020. It was what my friend Nassim Taleb called a “Black Swan” in his 2007 book with that title.
Taleb attacks (the correct word) the social sciences (in particular economics) which uses standard Gaussian bell curves to "prove" their points. Everything has to fit within the curve. There is little room in the neat world of the bell curve for events that are far from the center. 

He creates a world he calls Mediocristan which is the world of white swans, bell curves, and predictability. He contrasts this with Extremistan which is the world of chaos, fractal geometry, power laws, Black Swans, and where the unpredictable happens.

Let's look at 1987, 1998, and 2000 [and now 2008]. Each period had rather solid US economies preceding them. All had rather significant disruptions. And each one saw the Fed open the liquidity flood gates.

John Mauldin 3 July 2020

Taleb Black Swan på min site



Households across the world have been saving up since the coronavirus

Tim Congdon, an economist who tracks money supply figures, said the growth in deposits in the US and around the world had been “unprecedented in modern peacetime history”. 

He warned that at some point, such moves would lead to “a significant uptick in inflation”

FT 5 July 2020




In a democracy, people are not just consumers, workers, business owners, savers or investors. We are citizens.

In today’s world, citizenship needs to have three aspects: 
loyalty to democratic political and legal institutions and the values of open debate and mutual tolerance that underpin them; 
concern for the ability of all fellow citizens to lead a fulfilled life; and the wish to create an economy that allows the citizens and their institutions to flourish.

Martin Wolf FT 6 July 2020

medborgare.englund@gmail.com

Medborgare mot EMU


2020-07-05

How to make capitalism work for all

In many rich countries, decades of economic polarisation have left people like my neighbour not just underpaid, but having to accept short-term contracts, erratic shift patterns and unpredictable earnings. 

This “precariat” faces debilitating insecurity, which lockdown has made worse.

 As the gilets jaunes protests in France illustrated, many people see the economy as a system to which they do not belong, rigged to benefit others.

Donald Trump, the architects of Brexit and populist movements across Europe all advanced by appealing to groups that felt forgotten by elites and saw the economic system as rigged against them. 

They have, in effect, been promising to restore the post-1945 era and bring about the sort of moral reordering we glimpsed in the lockdown.

Martin Sandbu FT 3 July 2020


2020-07-04

Explosiv utveckling av pandemin i ett av tre scenarier från MSB

Våren 2021 är smittspridningen i Sverige låg, men med kraftiga regionala utbrott. Allmänheten är uppgiven och pandemin tränger undan långsiktiga politiska frågor.

Den ekonomiska krisen fördjupas med allt fler varsel samtidigt som permitterade inte kan återgå till arbetet. Ojämlikheten i samhället ökar vilket leder till missnöje och polarisering. 

Högt skuldsatta hushåll tvingas sälja sina bostäder och antalet vräkningar ökar liksom konkurserna. Svensk ekonomi är i ett läge som påminner om 90-talskrisen.

DN 3 juli 2020

Göran Persson om 90-talet: Vi gjorde mycket fel, naturligtvis. Kanske borde vi ha sparat lite mindre



Kronkursförsvaret och 90-talskrisen



war is peace freedom is slavery ignorance is strength

The 101st Airborne Division

conducts an air assault with UH-60 Black Hawk helicopters

Youtube




Därför är jag inte centerpartist eller sverigedemokrat


Konservatism utan liberalism blir lätt ett vattentrampande i en stark ström. Tidens gång drar oss framåt och förändring är oundviklig, oavsett hur mycket vi kämpar emot. 

Liberalism utan konservatism blir lätt drömmande utopisk. 
Ett försök att applicera lösningar utifrån princip snarare än rådande verklighet.









2020-07-02

The lessons of the 1930s and 1980s for Latin America

The second slump was in the 1980s, when a string of countries defaulted on their foreign debts after international interest rates soared. (När Volcker höjde räntan för att  besegra inflationen.)

Dictatorships, which had prevailed in the region, yielded to elected democratic governments in eight countries between 1982 and 1989.

The Economist 27 July 2020

Volcker startade sedelpressarna, inte Greenspan.



Det är lätt att vara efterklok, säger en del. Ofta de som har till uppgift att vara förkloka.

That´s what they are paid for.

Rolf Englund 2 juli 2020 

2020-07-01

Niall Ferguson - en av mina Gurus

Detta är början på en ny serie om mina nuvarande Gurus.

Jag börjar med Niall Ferguson som är både bred och djup.

En av hans senaste artiklar har rubriken 

2020 Is Not 1968. It May Be Worse.

Några av hans tidigare artiklar finns på min website här.

Hans egen hemsida finns här

Inlägg i denna serie kommer att tilldelas etiketten Gurus.