Englund

Since becoming the first American company to surpass $2 trillion in market value in August and peaking last month, the iPhone maker has lost $450 billion, wiped out by a 19% slump. Bloomberg 30 October 2020 Nice chart https://www.bloomberg.com/news/articles/2020-10-30/apple-loses-450-billion-in-value-since-record-on-iphone-woes

The U.S. stock market could be headed for a lost decade.  The Nikkei 225 index remains about 40% below its 1989 peak “It’s exactly when past returns are most glorious that future prospects are most dismal,” investor John Hussman, another famously bearish investment manager wrote recently .  He’s described today’s menu of choices for passive, long-term investors as “the worst in history.” Bloomberg  31 October 2020 https://www.bloomberg.com/opinion/articles/2020-10-31/personal-finance-what-if-stocks-don-t-always-go-up-advice-for-young-investors

Samtidigt som svenskarna har blivit mer positivt inställda märks en tilltagande politisk olust med EU, också i partier som brukade höra till hyllningskören. Det gäller inte minst Moderaterna. Annika Ström Melin Dagens Nyheter 28 oktober 2020 https://www.dn.se/ledare/annika-strom-melin-sverige-maste-ge-sig-in-i-debatten-om-macrons-eu-ideer/

Whether he succeeds or not, the transformation of the state-backed lender and equity investor marks a watershed for the Italian economy with the return of the state as a major player in corporate life, reversing the privatizations that former European Central Bank President Mario Draghi pushed through in the 1990s as the head of the Treasury. Bloomberg 30 October 2020 Nice pic of The Cassa Depositi e Prestiti SpA headquarters in Rome https://www.bloomberg.com/news/articles/2020-10-30/inside-italy-s-cdp-the-secret-banking-heavyweight-undoing-mario-draghi-s-legacy

Emergency support winds down in the most vulnerable countries and political tempers fray everywhere.  The question is whether the EU’s confederate states will bite the constitutional bullet and fold their futures together in a genuine fiscal debt union backed by treaty change, or continue rolling out half-measures that never quite solve the problem. Ambrose Evans-Pritchard Telegraph 28 October 2020 https://www.telegraph.co.uk/business/2020/10/28/double-dip-lockdowns-threaten-overwhelm-europes-economic-defences/

https://www.ft.com/content/1798a9b7-54d0-4a1b-948d-f03cc628cd80

This version of history is now under attack as never before. Tony Barber FT 29 October 2020

The most famous quotes in praise of democracy do not make a principled case for it. If, as Winston Churchill claimed, it is the worst form of government bar all the others “that have been tried”, then verifiable outcomes are what matter. If the idea takes hold that China has controlled the virus and avoided a recession, while the US remains beset by both, the signal to the rest of the globe will be unmistakable. Autocracy is the strong horse. Democracy’s rival is no longer an unworkable Soviet dogma, but a pragmatic superpower that is only nominally communist. FT 28 October 2020 https://www.ft.com/content/92ec21e7-2070-4105-b145-1063fa3c6b41 https://www.svd.se/konsten-att-lara-folket-hur-det-borde-rosta

US stocks close down 3.5% as Covid concern mounts FT 28 October 2020 https://www.ft.com/content/617f7ad3-6831-4e47-b66a-3efccd1972a6 But the pandemic never went away, and the threat of an autumn rebound in cases as cooler weather returned was long identified as a potential risk.  That’s far from a black swan, an improbable and unforeseen event that has an enormous impact. So why do investors seem surprised? https://www.marketwatch.com/story/why-stock-market-traders-got-surprised-by-the-jump-in-covid-19-cases-11603905496  

Liable to change rapidly and unpredictably, especially for the worse. Google’s English dictionary, provided by Oxford Languages.

That’s Robert Shiller, a Nobel Prize-winning economist and Yale professor, urging a cautious approach to investing in the top-heavy stock market in an op-ed for the New York Times. https://www.marketwatch.com/story/its-been-years-since-investors-have-been-this-fearful-of-a-stock-market-crash-nobel-prize-winning-economist-warns-11603685224 Consider a separate measure of stock valuations that I helped create — the Cyclically Adjusted Price Earnings (C.A.P.E.) ratio. This is a measure that enables the comparison of stock market valuations from different eras by averaging the earnings over 10 years, thus reducing some of the short-term fluctuations of each market cycle.  It now stands at a level that was higher in only two periods, both of which were followed by stock market crashes: the 1920s, in the lead-up to the Great Depression; and early 2000, just before the bursting of the dot-com bubble. https://www.nytimes.com/2020/10/23/business/people-fear-a-market-crash-more-than-they-have...

When I first developed the Taylor rule, which has been widely discussed for three decades now, I based it on an average inflation rate A decade ago, I wrote a paper with John C. Williams, now the president of the Federal Reserve Bank of New York, titled “Simple and Robust Rules for Monetary Policy,” in which we emphasized the importance of rules-based policymaking John B. Taylor Project Syndicate 16 October 2020 https://www.project-syndicate.org/commentary/fed-average-inflation-targeting-should-still-be-rules-based-by-john-taylor-5-2020-10 Federal Reserve is keeping the federal funds rate in a range far below what its own monetary-policy rules would prescribe. But since history shows that this deviation cannot last indefinitely, it would be better to normalize sooner rather than later. https://www.project-syndicate.org/commentary/fed-interest-rate-policy-deviation-from-monetary-policy-rule-by-john-taylor-5-2021-08 The Taylor Rule https://www.internetional.se/taylor.html

Ekvationen var enkel. Den bolsjevikiska regimen åtnjöt inte internationellt erkännande, vilket kunde göra överläggningar med västmakterna om den polska östgränsen betydligt lättare än i en situation där de vita segrat. Både röda och vita ryska ledare skulle enligt Piłsudski vilja komma åt det nya Polen, så det verkade även fördelaktigt att se till att åtminstone den ena sidan slogs ut. Den polska östgränsen, utarbetad av de allierade, låg längs med floden Bug i öster och motsvarade i grova drag dagens gräns. Bortsett från att ha stoppat världsrevolutionen att nå västerut har polsk-bolsjevikiska kriget gett upphov till en mängd mer eller mindre bestående processer. Till de senare hörde att de baltiska staterna och förmodligen även Finland fick ett andrum.  Deras självständighet tolererades i det stora hela av Sovjetunionen, åtminstone tills ett tillfälle att ompröva den nya ordningen uppenbarade sig. Nu dröjde det tjugo år före den sovjetiska aggressionen mot dessa länder 1939–1940,...

As Stephanie Kelton notes in her book The Deficit Myth, governments with access to a printing press are “currency issuers” (exceptions include, most obviously, members of the eurozone).  As such, all their spending could, in principle, be financed via the creation of cash. Taxes may serve other purposes — the redistribution of income and wealth, the discouragement of “sinful” behaviour — but, in the world of MMT, they serve no useful macroeconomic role. The alternative of multiple business failures and mass unemployment is of no use to anyone. In the process, however, we are in effect borrowing from our collective economic futures.  The political process will decide whether that bill comes in the form of higher taxes, more austerity, rising inflation or eventual default.   Stephen King FT 22 October 2020 https://www.ft.com/content/bcb523c3-7448-4cd6-a2d2-69b8f13be8f3   The author is HSBC’s Senior Economic Adviser and author of ‘Grave New World’

I sin bok ”Postdemokrati”  (2005) beskrev den brittiske statsvetaren Colin Crouch hur vi hade hamnat i ett postdemokratiskt tillstånd och vad detta innebar.  I en ny bearbetad version av boken, ”Post-democracy after the crises” (Polity Press) återknyter han till sina resonemang i skuggan av de kriser som drabbat oss under 2000-talet.  Samhället och särskilt demokratin behöver sina gycklare, de som vågar och orkar utmana, de behöver djävulens advokater som tvingar alla att skärpa till sig och förklara vad de egentligen menar.  Men detta förutsätter också att det finns arenor, scener, miljöer och sammanhang där kritiken faktiskt tas på allvar. Har vi det i dag? Torbjörn Elensky SvD 21 oktober 2020 djavulens-advokater-ar-demokratins-raddare Heder, Sanning och rätt

Our political process can’t reduce spending and/or raise taxes enough to balance the budget, so the debt grows and grows.  As it does, paying the interest plus the accumulated debt load pulls more capital away from more productive uses.  This depresses economic growth, thereby generating even more spending and debt. This has to end, and I think it will do so in the event I’ve called The Great Reset. John Mauldin 16 October 2020 https://www.mauldineconomics.com/frontlinethoughts/caught-in-a-debt-trap

as the flu and a vaccine might not be able to stop it, top UK scientist says CNBC OCT 20 2020  https://www.cnbc.com/2020/10/20/covid-19-likely-to-become-as-endemic-as-flu.html https://www.cnbc.com/2020/10/20/oecds-gurria-we-are-just-starting-to-walk-into-the-woods.html The threat of long economic Covid looms We know that many businesses have been hurt, as demand for their output collapsed or they were locked down. The second waves of the disease now crashing on to many economies will make this worse. As the IMF’s Global Financial Stability Report shows In a crisis of this scale, there is only one entity able to act as both insurer and supporter of demand. Unfortunately, the capacity of governments to act varies hugely.  But those with globally accepted currencies have enormous room for manoeuvre.  Martin Wolf 20 October 2020 https://www.ft.com/content/f9a0c784-712e-4bf9-b994-55f8d63316d9

  SvT 20 0ktober 2020 Deltagarna i Ekonomibyrån synes inte ännu ha insett att  en stat med egen valuta inte går i konkurs för skulder i sin egen valuta. De verkade också tro att statsskulden i egen valuta i all synnerhet om den köpts av  centralbanken belastar kommande generationer. -  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, The Economist den 23 juli 2020.   "Riksbankens nya stjärna" - Karolina Ekholm - En lydig kvinna

Governments are planning to cut deficits at the wrong time This European policy mistake-in-the-making bears many resemblances to the self-induced double-dip of 2011. Shahin Vallée FT 18 October 2020 The writer, a former adviser to the president of the European Council and the French economy minister, is a senior fellow at the German Council on Foreign Relations https://www.ft.com/content/30e0ca92-1bbf-445b-8ec2-427a2c08ec66

WSJ 18 October 2020

As the IMF and World Bank annual meetings wrap up in virtual form in Washington this weekend, many of the most senior figures at the top — and in the research departments — of these institutions have been singing a new tune on fiscal policy  Long gone is the notion, supported by former UK chancellor George Osborne, that it was imperative to have a credible plan to reduce deficits in the public finances because that would give households the confidence to spend rather than save. The question now is why has the thinking changed so radically.  FT 16 October 2020 https://www.ft.com/content/0940e381-647a-4531-8787-e8c7dafbd885 Guldet, euron och budgetunderskottet Englund blogg 16 October 2020 https://englundmacro.blogspot.com/2020/10/guldet-euron-och-budgetunderskottet.html Räntan världen över är för låg och en större del av stimulanserna borde ske via finanspolitiken.    Englund blogg 5 december 2009 https://englundmacro.blogspot.com/2014/08/skriande-uppenbart.html

 Detta läggs ut den 16 oktober 2020 Guldet, euron och budgetunderskottet Most governments still deny that they can print money with impunity  as advocated by modern monetary theory but what matters is that they are doing it.  Simon Kuper FT 4 June 2020 ”Families across the country are tightening their belts and making tough decisions.  The federal government should do the same.”  President Obama, State Of The Union Address, 2010 I Kalle Ankas värld hade Farbror Joakim sina penningbingar med guldpengar. När han köpte något blev det mindre pengar kvar. Det är ett synsätt som många har svårt att frigöra sig ifrån. Detta har blivit särskilt aktuellt så här i coronatider. Har vi råd med alla dessa stödåtgärder, frågar sig många.   "Om man har en sedelpress går man inte i konkurs", skrev jag på min blogg den 4 november 2011. Privatpersoner, företag eller och kommuner har inga sedelpressar.  Men om man är en stat – med en egen valuta – så har man har en se...

At present, investors are paying 22 times forward earnings to purchase stocks on the S&P 500, 50% higher than the 10-year average valuations across the index. He added that current valuations were an example of “stock market failure” driven by millennials speculating in the stock market for the first time. “They are buying bullish call options that expire inside two weeks. There was ($500 billion) of bullish call options bought in a four-week stretch by small retail traders,” Smead said. “In ’99 it was $100 billion, in ’07, it was $100 billion https://www.cnbc.com/2020/10/15/smead-nightmare-us-stock-valuations-driven-by-young-dumb-investors.html

gets lost in the lore of the 1960s, but few events outside war and the Depression have done more to change America.  By ending the preference for European immigrants, the law expanded the US population over time and made it enormously less white. In July, Americans who demand less immigration were outnumbered by those who want more for the first time since the 1965 law.  Those who regard it as on the whole a good thing lead voters who think the opposite by the widest margin this century. FT 14 October 2020 https://www.ft.com/content/07d9509c-e284-44e8-b397-38428f9a9030

You tube https://www.youtube.com/watch?v=_jIYXint1XI

  The ECB’s support has encouraged investors to set aside concerns about Rome’s huge debt pile — expected to swell to more than 150 per cent of economic output this year —  to focus on the extra yield they can capture by buying Italian bonds rather than ultra-safe German debt. FT 13 October 2020 https://www.ft.com/content/56e4ddaf-dcf4-4a71-836d-b2d63eb9c2d4

asset valuations may stay elevated for some time.  Nonetheless, and especially if the economic recovery is delayed, there is a risk of a sharp adjustment in asset prices or periodic bouts of volatility. IMF blog 13 October 2020 https://blogs.imf.org/2020/10/13/a-bridge-to-economic-recovery-be-aware-of-financial-stability-risks/

Negative rates do not stimulate lending for useful economic activity. They damage “good” banks by eviscerating their bread and butter business model, but help “bad” banks play the casino. BIS says negative rates – or NIRP – are chiefly intended to drive down the exchange rate. The central banks of Switzerland, Denmark, and Japan openly admitted as much. Professor Richard Werner, a bank expert at Oxford University, said the outcome is progressively ruinous for Germany’s 1,250 savings banks and cooperative lenders, which rely on deposits from savers and have intricate ties with local business. These banks account for 90pc of lending to small firms (SMEs). They provide credit for much of the Mittelstand engineering and machine tool family firms. Ambrose Evans-Pritchard Telegraph 13 October 2020 https://www.telegraph.co.uk/business/2020/10/13/negative-interest-rates-have-failed-everywhere-path-soviet-banking/

The Death of Europe Douglas Murray Youtube 7 ok. 2019 Wokeness: the new Western morality Douglas Murray Youtube 8 July https://www.svd.se/om/douglas-murray

 The Economist Youtube 8 sep. 2020

Det är uppenbart att finanspolitiken behöver spela en större stabiliseringspolitisk roll än vad som varit fallet de senaste decennierna. Förste vice riksbankschef Cecilia Skingsley 2020-10-07 Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken. Rolf Englund blog 5 december 2009

Mr Powell’s appeals for a fiscal deal have a social dimension: he has noted that additional stimulus would be crucial to saving low-income and minority households disproportionately affected by both the virus and the recession.  This would prevent the “tragic” risk of exacerbating existing disparities, he said last week, using emotionally loaded language unusual for the central bank. FT 11 October 2020 https://www.ft.com/content/91322629-0668-49b5-aba0-13bd72b436e8