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2021-01-22

In January 2008, as the subprime crisis unfolded, Davos buzzed with confidence

Fred Bergsten of the Peterson Institute for International Economics: “It is inconceivable — repeat, inconceivable — to get a world recession.” 

To be fair, the forum’s 54-page Global Risks Report did include two paragraphs on subprime mortgages.

Simon Kuper FT 21 January 2021

https://www.ft.com/content/a9395f9b-33de-45f6-a5ff-249d578676a7


Warnings that rising deficits will reignite inflation and undermine the dollar have proved wrong for decades, so deficit hawks are increasingly easy to mock as crotchety old scolds.

The new view, expressed by leading figures from the IMF, academia and media, is that with inflation long dead and interest rates at record lows, it would be unwise, even irresponsible, not to borrow to boost the economy. The amounts — billions, trillions — hardly matter, especially not for the US, which still has the world’s most coveted currency.


 Increasingly, the money printed by central banks goes to finance government debts. Many elites see this as fine


Instead of a path to freedom, low rates are a trap. They encourage more borrowing and rising debt, which drags productivity lower and slows growth. That makes the economy financially fragile, forcing central banks to keep rates low. Given today’s very high levels of debt, only a small increase in interest rates would make the debt burden unsustainable.


The writer, Ruchir Sharma, Morgan Stanley Investment Management’s chief global strategist, is author of ‘Ten Rules of Successful Nations’



FT 20 January 2021


https://www.ft.com/content/d49b537a-95f8-4e1a-b4b1-19f0c44d751e





Joe Biden ushers in the Keynesian inflation era of the 2020s

My conclusion: the Federal Reserve will be on the warpath much earlier than widely assumed; dollar bears will be disappointed again; and Wall Street faces a cold douche, a sharp correction before the long bull market of the Roaring Twenties gets going


Ambrose Evans-Pritchard Telegraph



https://www.telegraph.co.uk/business/2021/01/20/joe-biden-ushers-keynesian-inflation-era-2020s1/

I dag 31 december 2020 lämnar Storbritannien EU. Men ändå är det besynnerligt tyst om Nigel Farage, grundare av UKIP, UK Independence Party.

Jag har en gång varit i samma rum som Farage. Margit Gennser, senare ordförande för Medborgare mot EMU, den borgerliga kampanjorganisationen inför folkomröstningen 2003, hade via sina kontakter skickat mig till London för att delta i ett möte i en kyrksal.


Jag förväntades på tre minuter sända en hälsning från Sverige. Jag och några andra skulle vara som ett förband innan rockstjärnan skulle göra sin entré.


Nigel Farage var rockstjärnan. Jag hade då mycket dimmiga begrepp om honom och lyssnade med skräckblandad förtjusning på hans budskap.


Min insats var således mycket begränsad, men det uppvägs av att kyrkan, som kyrksalen hörde till, var Westminster Abbey.


Rolf Englund FB 31 december 2020


Do I regret supporting Trump?

Nigel Farage Youtube 20 January 2021



global stock-market rally — profits are flat since 2008

The global stock market has nearly doubled since 2008 because the multiple paid for unchanged profits has nearly doubled

https://www.marketwatch.com/story/the-incredible-backdrop-to-the-global-stock-market-rally-profits-are-flat-since-2008-11611226707



2021-01-21

“As with frogs in water that is slowly being heated to a boil, investors are being conditioned not to recognise the danger.”

Seth Klarman, the founder of hedge fund Baupost Group, has told clients central bank policies and government stimulus have convinced investors that risk “has simply vanished”, leaving the market unable to fulfil its role as a price discovery mechanism.  


“With so much stimulus being deployed, trying to figure out if the economy is in recession is like trying to assess if you had a fever after you just took a large dose of aspirin,” he wrote. 


FT 21 January 2021


https://www.ft.com/content/9c3ecb09-c4bd-4066-a462-af496725105d




2021-01-20

Frontex, The European bloc’s first uniformed armed force

Frontex is an important milestone in the bloc’s efforts to create functioning institutions that can implement its security and foreign policy objectives. The US, some European officials like to point out, had a coastguard before it had its own navy.

Critics, by contrast, see Frontex as the spearhead of a militaristic “Fortress Europe” strategy

The camera lingers first on the EU’s circle of stars insignia and then shifts to a close-up of the officer’s side cap, styled similarly to those used in the US military and French police. The man salutes in front of a logo for the armed force he represents: the Frontex European Border and Coast Guard.

FT 20 January 2021


https://www.ft.com/content/32d464ad-1efb-4b6b-ad43-427d05e01852


https://twitter.com/Frontex


Europeiska byrån för förvaltningen av det operativa samarbetet 
vid Europeiska unionens yttre gränser (FRONTEX)




10.3m users had their electricity abruptly shut off in Mexico City

Cutting off users was necessary to avoid pulling the plug on the entire national grid.

The culprit was renewable energy. Because renewable power is intermittent — sunshine and wind are not constant — and must be backed up by other sources, it puts strain on the system. 

FT 20 January 2021

https://www.ft.com/content/deafe6f1-7357-4424-8459-f46e298b65ba


Why renewables can’t save the planet Michael Shellenberger TEDxDanubia


https://www.youtube.com/watch?v=N-yALPEpV4w&feature=share&fbclid=IwAR1k3p-vdmdpYwSa4QWpfT5O302-8NHYD1XE5v3zigUxj3Sh3Y4L-MJZvuE


ECB is buying even more Italian bonds than ever before.

Through its public sector purchase program (PSPP) and pandemic emergency purchase program (PEPP) it purchased €165 billion of Italian bonds in the first eleven months of 2020, 

bringing its total holdings to €529 billion. 

Then, of course, there are the banks.


https://www.nakedcapitalism.com/2021/01/perhaps-its-time-to-start-worrying-about-italy-again.html

2021-01-19

Government-aided rebound would come in stark contrast to what happened during the 2007 to 2009 recession.

Back then, Congress’s biggest package to counter the fallout of the downturn was the $800 billion American Recovery and Reinvestment Act, passed in 2009. 

At the time, concern over the deficit helped to stem more aggressive fiscal policy responses.


But economic thinking has undergone a sea change since then.


New York Times 18 January 2021


https://www.nytimes.com/2021/01/18/business/economy/full-unemployment-fiscal-policy.html 


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 blogg 5 december 2009


https://englundmacro.blogspot.com/2014/08/skriande-uppenbart.html

2021-01-18

Biden, Parisavtalet och Ingela Thalén

USA återansluter sig till Parisavtalet  ”Den symboliska betydelsen kan inte överskattas”. Visserligen påtar sig de deltagande länderna att verka för att hålla den globala uppvärmningen väl under 2 grader, men det finns inga sanktioner


Även under Trump har koldioxidutsläppen minskat. Det visar att det till stor del är marknadskrafterna som driver på omställningen. Kol har fasats ut med ganska stor kraft eftersom det är för dyrt.


https://www.svd.se/andrar-trumps-beslut--ansluter-till-parisavtalet




Ingela Thalén ”Det är ett löfte att det är en målsättning som vi lovar att ha som mål att arbeta för.”



https://sv.wikipedia.org/wiki/Ingela_Thalén




As a result of last year’s shock, the US is likely to exceed its 2020 targets under the Copenhagen accord to cut emissions by 17 per cent from 2005 levels



https://www.ft.com/content/1b1dfaf0-4dfb-4788-9270-f880242b2a56




Why Greece's Economy Never Recovered? (2020)

Greece’s GDP was still 25% below its pre-crisis peak, with unemployment above 20% for most of the last decade.

Greece’s no show recovery is unparalleled in modern history. Even amongst the most severe Depressions. 

Five years after the Great Depression US GDP per capita had risen by 35%, likewise after Argentina’s 2002 crisis it was up by 45%. 

https://www.youtube.com/watch?v=zn24zudsuvI&t=193s

FN-rapporten visar att den globala uppvärmningen blir ungefär 3,2 grader

Den uppvärmning som anses möjlig att hantera för vår civilisation är högst 2 grader – eller helst 1,5 grader – enligt FN:s klimatpanel IPCC.

/men det är/ i slutet av detta århundrade jämfört med förindustriell nivå, om länderna håller sig till sina nuvarande klimatlöften. 

SvT 18 januari 2021

https://www.svt.se/nyheter/fn-pandemin-blir-ett-vagskal-for-klimatet

Kommentar RE:

Den intressanta tidpunkten är om och när vi når den punkt när detta inte längre går att förhindra.

Over the last year there has been a veritable explosion of the money supply.

In the US, M2 has surged by 24pc. In the UK, M4 has increased by 12.8pc. And in the eurozone M3 has grown by 11pc.


The current monetary expansion shows itself in large increases in the bank deposits of households. Once they are in a position to spend this money, they are most assuredly going to do so.


There is no inevitable direct link between the money supply and inflation. Normally, the link operates through aggregate demand. 


Just as the monetary authorities can stoke the inflationary fires so they can also dowse them. But will they? That is a subject for another day.


Roger Bootle Telegraph 17 January 2021


https://www.telegraph.co.uk/business/2021/01/17/inflation-not-dead-thought-merely-resting/

2021-01-15

What was the best-performing asset class in 2020? US inflation-linked bonds

 If you think “tech stocks” or “bitcoin”, think again. Instead, as the Bridgewater hedge fund recently wrote to its clients, “among the more interesting and least recognised outcomes” of 2020 was that US inflation-linked bonds beat other assets by delivering a 35 per cent return, on a risk-adjusted basis, as investors hedged against inflation risks.


In recent years, most investment portfolios have been constructed on the assumption that interest rates and inflation will stay low indefinitely.


“there could be a taper tantrum”, adds Mr Dudley, referring to the 2013 market swings that occurred when Ben Bernanke, then Fed chair, gave the mildest of hints that the central bank might cut, or taper, its QE programme


Gillian Tett FT 14 January 2021



https://www.ft.com/content/d50304b4-45d3-47d8-b793-4a58a0e9fd59

2021-01-14

Simon Kuper - en av mina Gurus

 Biden’s administration will include many veterans of 2008. But the world and the US of 2008 no longer exist. 




Simon Kuper är en lysande skribent hos Financial Times

Hans senaste opus handlar om så skilda ting som Lenin, Alexander Kerensky, Viktor Orban, Modern Monetary Theory och Joe Biden.



We will eventually get to net-zero emissions. Solar and wind energy, as well as storage batteries, keep getting cheaper. 


We just won’t get there in time to prevent ruinous climate change.


https://englundmacro.blogspot.com/2020/11/we-just-wont-get-there-in-time-to.html


His page at FT


Biden’s administration will include many veterans of 2008. But the world and the US of 2008 no longer exist’. Simon Cooper

Biden, 78, needs a playbook for a new age. Here are just a few of the dizzying, distressing, interconnected changes of the past 12 years

FT 14 January 2021


https://www.ft.com/content/12821f29-c72c-467b-b018-d72324a244af




2021-01-13

Market measures of inflation expectations have drifted higher.

The 10-year break-even rate, derived from prices of US inflation-protected government securities, now sits above 2 per cent for the first time since late 2018.



FT 13 January 2021


https://www.ft.com/content/523b84ae-385b-40aa-8564-6ecaba3730a4

2021-01-12

Fortfarande dröjer sig obesvarade frågor om militära transporter på Estonia

På den svenska sidan hade tulltjänstemännen fått order uppifrån om att släppa igenom transporter från Försvarsmakten utan kontroller när Estonia kom in till kaj i Stockholm, enligt ett hemligt avtal mellan Försvarsmakten och Tullverket.

Senare kom det fram att avtalet skrevs under redan i februari 1992 och hade varit i kraft i 30 månader när Estonia förliste. Tullverkets generaldirektör Ulf Larsson bekräftade i TV 4 Nyheterna att rörde det sig om ”tullklarering av särskild materiel” och att det hade pågått militära leveranser på fartyget under en längre tid.

Jonas Gummesson SvD 9 januari 2021

https://www.svd.se/fragan-om-militar-last-pa-estonia-drojer-sig-kvar


Konstigt att han inte nämndes vid namn han som  var statsminister när det beslöts att förtullning skulle ske i särskild ordning...

Nämn ej hans namn, nämn ej hans ätt, gör kronan på hans hjässa lätt.

2021-01-09

Earth’s Margin for Error Narrows

European scientists concluded 2020 matched 2016 as the world’s hottest on record. 

Global temperatures are now just 0.25 degrees Celsius shy of limits set by the Paris climate accord

High temperatures in Siberia threaten to unlock methane deposits from melting permafrost, potentially unleashing runaway climate reactions prompted by higher greenhouse gas concentrations in the atmosphere.  

The Copernicus models combine data from scientists in the U.K., France, Germany, Italy and the U.S.

Nice, sort of, map.

https://www.bloomberg.com/news/articles/2021-01-08/earth-s-margin-for-error-narrows-after-another-year-of-record-heat



Investors borrowed a record $722.1 billion against their investment portfolios through November

A strong indicator of stock-market euphoria flashed red last month. 


https://www.wsj.com/articles/investors-double-down-on-stocks-pushing-margin-debt-to-record-11609077600




Who’s Afraid of MMT? by James K. Galbraith - Project Syndicate

It is not surprising that current and retired central bankers feel threatened by Modern Monetary Theory. With deep roots in the Keynesian tradition and a consistent commitment to achieving full employment, MMT shows that good economics and sound policy doesn't have to be shrouded in obscurantist cant.


Two fresh cases are Raghuram G. Rajan, a former governor of the Reserve Bank of India, and Mervyn King, a former governor of the BOE.


https://www.project-syndicate.org/commentary/why-central-bankers-fear-modern-monetary-theory-by-james-k-galbraith-2020-12

2021-01-07

The U.S. trade deficit hit a 14-year high in November $68 bn

That was the highest deficit since August 2006, and the goods deficit was the highest on record.


Wall Street Journal 7 January 2021



https://www.wsj.com/articles/u-s-trade-deficit-widened-in-november-11610027554




US trade deficit in August was widest in 14 years


The US trade deficit rose to $67bn 


https://englundmacro.blogspot.com/2020/10/us-trade-deficit-in-august-was-widest.html

2021-01-06

Johan Rockström, professor i global miljövetenskap, i en dramatiserad föreläsning från Dramaten i samarbete med Nobel Prize Museum.

Hur kommer våra barns och barnbarns planet se ut? 

Vad kan vi göra i dag för att undvika de värsta katastroferna och finns det ett ljus i tunneln till en hållbar och attraktiv värld? 

https://www.svtplay.se/video/29411136/performance-lecture-om-var-stund-pa-jorden/performance-lecture-om-var-stund-pa-jorden-avsnitt-1?start=auto


Filmaren Damon Gameau drivs av en oro för vilken värld hans fyraåriga dotter ska växa upp i. 

Är en ljusare framtid överhuvudtaget möjlig för klimatet, miljön och människorna? Han reser runt jordklotet för att hitta de bästa exemplen och mest innovativa lösningarna som eldsjälar har skapat, och som finns redan idag.

https://www.svtplay.se/video/25034974/2040-framtidsfilmen?info=visa&start=auto

2021-01-05

A buyer requires a seller there can be no “sidelines


For every buyer, there must be someone willing to sell. As noted by Clifford Asness:

“There are no sidelines. Those saying this seem to envision a seller of stocks moving money to cash and awaiting a chance to return. But they always ignore that this seller sold to somebody, who presumably moved a precisely equal amount of cash off the sidelines.”

Every transaction in the market requires both a buyer and a seller, with the only differentiating factor being at what price the transaction occurs. Since this is necessary for there to be equilibrium in the markets, there can be no “sidelines.” 

MarketWatch 5 January 2021

https://www.marketwatch.com/story/investors-are-waiting-for-cash-on-the-sidelines-to-juice-the-stock-market-this-is-why-that-idea-is-hogwash-11609795905




2021-01-03

Det stämmer helt enkelt inte att vi bara har fem år på oss att möta katastrofen. Tvärtom blir Sverige och världen bättre för varje år som går

Deras /Miljöpartiets/ syfte är förstås att bana väg för en mer radikal klimatpolitik. Problemet är att en radikal klimatpolitik nästan jämt mynnar ut i långtgående socialistiska åtgärder som undergräver den tillväxt som är avgörande i kampen mot utsläppen. 

För egen del är jag övertygad om att svaret behöver vara mer tillväxt 

Benjamin Dousa vd för Timbro SvD 3 januari 2021


https://www.svd.se/benjamin-dousa-miljopartiet-har-fel-om-klimatet/i/senaste/om/ledare

https://timbro.se/person/benjamin-dousa/

2021-01-02

Vi behöver inte längre fantisera om klimatförändringarna – de är märkbara här och nu. Men... Peter Englund

Men det är alls inte för sent.

”The future we choose”. Författarna är Christiana Figueres och Tom Rivett-Carnac.

De två skyggar inte för det apokalyptiska, men deras budskap är att katastrofen är fullt möjlig att undvika, bara vi handlar, nu.

Lösningen finns ej i marknaden allena, men det finns ingen lösning utan marknaden.

Lösningen finns ej enbart i teknologin, men det finns ingen lösning utan teknologin.

Peter Englund DN 26 december 2020

We will eventually get to net-zero emissions. Solar and wind energy, as well as storage batteries, keep getting cheaper. 


We just won’t get there in time to prevent ruinous climate change.


Simon Kuper FT 12 November 2020


https://englundmacro.blogspot.com/2020/11/we-just-wont-get-there-in-time-to.html

Global warming. Never has so much been promised by so many governments, businesses and financial institutions.

This splurge of commitments to tackle climate change is welcome, but it risks being confused with something it is not: action to cut emissions at the scale and pace needed to meet the goals of the 2015 Paris climate accord.


Financial Times editorial 30 December 2020


Greta hade inte kunnat säga det bättre.


https://www.ft.com/content/6e4346fb-791f-4625-94ad-d5b6bc51b6af