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2021-05-30

Ingmar Karlsson. Martin Kragh läser en memoarbok

Karlssons första postering var ambassaden i Bogotá. Hans yrke skulle senare föra honom till bland annat Damaskus, Peking, Bonn och Istanbul. Karriären kröns som ambassadör i Prag.

SvD 29 maj 2021

https://www.svd.se/hard-dom-okunskap-har-styrt-svensk-utrikespolitik


En Europeisk nation eller nationernas Europa?

Ingmar Karlsson Wahlström och Widstrand, 1996

http://www.nejtillemu.com/ingmarkarlsson.htm





Then along came China

In 1944, Friedrich A. Hayek suggested that the spontaneous order of markets was inherently superior to the supposedly dynamism-draining totalitarian order of communist or fascist regimes. The ensuing decades – when free-market economies thrived, and the Soviet Union’s centrally planned economy imploded – seemed to vindicate him. Then along came China.

President Dwight Eisenhower warned against in his farewell address – the “acquisition of unwarranted influence” by the “military-industrial complex” – could continue unabated (though today it might be renamed the “military-industrial-tech-financial-media complex”).

Project Syndicate 25 May 2021

https://www.project-syndicate.org/commentary/free-markets-central-planning-chinese-governance-by-andrew-sheng-and-xiao-geng-2021-05


Det LitterärIndustriella komplexet med länk till Det Militärindustriella komplexet


2021-05-28

På sidan 191 i Riksbankslagens motiveringar avslöjas det

 



En ny riksbankslag Publicerad 28 maj 2021


https://www.regeringen.se/rattsliga-dokument/lagradsremiss/2021/05/en-ny-riksbankslag/



https://www.regeringen.se/49bd29/contentassets/045a703de025471681ad5477583ebd97/en-ny-riksbankslag.pdf


Enkelt uttryckt vill EU-kommissionen och ECB att Sverige ska implementera de unionsrättsliga reglerna i regeringsformen och genomföra en rättslig integration av Riksbanken i Europeiska centralbankssystemet (ECBS), vilket skulle möjliggöra ett införande av euron som valuta i Sverige.

Fokus 15 april 2021


https://englundmacro.blogspot.com/2021/05/forslag-om-en-ny-riksbankslag.html



Riksbankskommittén har överlämnat sitt slutbetänkande ”En ny riksbankslag”  

Riksbankens stabschef Anders Vredin har i egenskap av sakkunnig i utredningen lämnat ett särskilt yttrande till förslaget om ny riksbankslag. 


https://www.riksbank.se/sv/press-och-publicerat/nyheter-och-pressmeddelanden/nyheter/2019/forslag-till-ny-riksbankslag/


I yttrandet heter det bl a:

I utredningen sägs också att Riksbanken – för att efterleva unionsrättens förbud mot monetär finansiering – bör undvika att köpa en alltför stor del av ett enskilt lån svenska statspapper eller att inneha en alltför stor del av den totala mängden utestående statspapper. 

Utredningen hänvisar här till rättspraxis inom EU. ECB har en självpåtagen restriktion (som de alltså kan ändra) att inte köpa mer än 33% av ett enskilt obligationslån, medan den dom som utredningen syftar på (Weiss-domen) landade i att ett rimligt krav är att andra aktörer än centralbanken köper åtminstone hälften av statsskulden. Detta handlar om att centralbankens åtgärder inte ska underminera statens budgetdisciplin. Den av ECB självpåtagna begränsningen utgjorde enligt EU-domstolen en av många faktorer som kunde påverka domstolens helhetsbedömning. 

Kommittén ger dock det felaktiga intrycket att ECB:s egen begränsning är en nödvändig förutsättning för att köpen av statspapper ska vara förenliga med förbudet mot monetär finansiering.






U.S. inflation hasn’t been this high since 2008

The so-called PCE index jumped 0.6% in April, marking the biggest monthly increase since 2008. 

The rate of inflation over the past 12 months also shot up to a 13-year high of 3.6% in April from 2.4% in March.

MarketWatch 28 May 2021

https://www.marketwatch.com/story/another-key-u-s-inflation-gauge-surges-in-april-and-hits-13-year-high-11622205893





Förslag om en ny riksbankslag, Finansdepartementet 28 maj 2021

Lagförslagen i remissen grundar sig på betänkandet som den parlamentariska Riksbankskommittén, med representanter för samtliga politiska partier i riksdagen, lämnade i slutet av 2019. Det finns alltså en bred politisk uppslutning bakom dessa förslag.

https://www.regeringen.se/pressmeddelanden/2021/05/forslag-om-en-ny-riksbankslag/


EU-kommissionen och ECB vill att Sverige ska implementera de unionsrättsliga reglerna i regeringsformen, vilket skulle möjliggöra ett införande av euron

Enkelt uttryckt vill EU-kommissionen och ECB att Sverige ska implementera de unionsrättsliga reglerna i regeringsformen och genomföra en rättslig integration av Riksbanken i Europeiska centralbankssystemet (ECBS), vilket skulle möjliggöra ett införande av euron som valuta i Sverige.

Fokus 15 april 2021

https://englundmacro.blogspot.com/2021/04/eu-kommissionen-och-ecb-vill-att.html


Åsa Lindhagen, Finansmarknadsminister 

Som finansmarknadsminister vill jag fortsätta utveckla finansmarknaden i en grönare och mer hållbar riktning. Den finansiella stabiliteten ska vara god och vi ska verka för en finansmarknad som bidrar till ekonomisk trygghet. I budgetarbetet vill jag bidra till ett jämlikt och jämställt samhälle. Jag vill se ett samhälle där alla människor har goda möjligheter att leva ett gott liv och alla barn har goda uppväxtvillkor.

https://www.regeringen.se/sveriges-regering/finansdepartementet/asa-lindhagen/


Åsa Lindhagen är civilingenjör i industriell ekonomi och har en bakgrund inom näringslivet.

”Efter min examen arbetade jag i näringslivet som managementkonsult och då var jag inriktad på bland annat banker, pension och försäkringar”, säger hon.

https://www.di.se/nyheter/lindhagen-far-nyckelroll-vill-lagga-hardare-linje-mot-penningtvatt/


År 2012 utsågs Lindhagen till gruppledare för Miljöpartiet i Stockholms kommunfullmäktige.[3] Mellan åren 2014 och 2018 var hon socialborgarråd i Stockholms stad.[3] I sin roll som socialborgarråd var hon engagerad för människor på flykt, barns rättigheter och arbete mot våld och förtryck. Hon drev frågor kring ekonomiskt bistånd till papperslösa och stöd till ensamkommande unga.[5]

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


These days the question isn’t whether the Fed will start selling off Treasury securities, but...

but how soon and by how much it will begin to reduce the pace of accumulation. 

Would a mere “tapering” by the Fed from its current $80 billion a month in Treasury purchases bring about an economic contraction?

Judy Shelton WSJ May 27, 2021 


https://www.wsj.com/articles/the-fed-lacks-precision-inflation-tools-11622153546





Time again to think about Moral Hazard

"I'm a market-oriented guy, but not when I'm faced with the prospect of a global meltdown" 

President George W. Bush, 14 Nov 2008

cit. by Nicole Gelinas The Fall

https://www.amazon.de/-/en/Nicole-Gelinas/dp/B00JX0O9GO


Mitigating the COVID Economic Crisis:

Act Fast and Do Whatever It Takes

CEPR Press, 2020

http://itsr.ir/en/Content/upload/COVIDEconomicCrisis.pdf#page=32


In March 2020, as Covid-19 hit the west, prices in the $21tn US Treasuries sector went haywire as market liquidity collapsed. 

Relying on ad hoc emergency measures is not a good way to make policy, not least because it creates moral hazard. 

So, as the March anniversary looms, the Fed should explain to the public in easy-to-understand language what created the problem, and how to avoid a repeat.

Gillian Tett 4 March 2021

https://englundmacro.blogspot.com/2021/03/the-21tn-us-treasuries-sector.html


Moral Hazard

https://www.internetional.se/moralhazardwsjled0925.htm


https://scholar.google.se/scholar?q=Moral+hazard+financial+crisis&hl=en&as_sdt=0&as_vis=1&oi=scholart


2021-05-26

10-point checklist for bubbles

inspired by Charles Kindleberger, the author of the 1978 classic, “Manias, Panics, and Crashes.” 

In the table below, you can see what that list is, as well as the color-coded rating he assigned to them.

U.S. stocks are demonstrating most of the characteristics of a bubble, but don’t sell yet, says strategist Steve Goldstein  


MarketWatch  May 26, 2021






"En kris på fastighetsmarknaden skulle kunna hota stabiliteten i det svenska finansiella systemet", skriver Riksbanken i årets första stabilitetsrapport

Det finns sårbarheter i det finansiella systemet sedan tidigare. I euroområdet handlar det främst om svaga banker och offentliga finanser, och i Sverige om hushållens höga skuldsättning och storbankernas stora exponeringar mot bostäder och kommersiella fastigheter. 

En kris på fastighetsmarknaden skulle kunna hota stabiliteten i det svenska finansiella systemet.

Riksbanken 26. maj 2021

https://www.riksbank.se/sv/press-och-publicerat/nyheter-och-pressmeddelanden/pressmeddelanden/2021/ljusare-utsikter-men-riskerna-for-den-finansiella-stabiliteten-ar-fortsatt-forhojda/


Varningsord för bankernas utlandsupplåning

https://englundmacro.blogspot.com/2011/04/varningsord-for-bankernas.html



Price signals have broken down in the bond markets - Bitcoin

The beauty of today’s fractional reserve banking system – foundation for three centuries of galloping progress – is that the allocation of private money is not controlled by the state. The central banks provide safe and stable money. They do not – or rather did not – pick winners and losers.

They crossed a line when they began to use QE as a routine tool of inflation management, to the point where the ECB is the preeminent buyer of European corporate bonds, and the Bank of Japan owns much of the Tokyo stock index.

Do we want them to offer bank accounts directly to firms, funds, and households, competing head on with commercial private banks? 

This would risk a rush to central bank safety in a financial crisis, setting off a vicious circle. 

Ambrose Evans-Pritchard Telegraph 25 May 2021

https://www.telegraph.co.uk/business/2021/05/25/crypto-freedom-promised-bitcoin-will-lead-digital-serfdom/


Stockholmsbörsen sprängde gränsen 10.000 miljarder kronor i marknadsvärde under april

Totala börsvärdet 211 procent av BNP 

Mikael Vilenius DI 26 maj 2021

https://www.di.se/analys/illavarslande-nar-borsen-drar-ifran-realekonomin/




2021-05-25

I vividly remember a meeting in late 2007 with the head of a major US bank

The executive drew an inverted U in response to me asking where financial markets stood. 

I immediately asked about the bank’s risk positioning. “Max risk on” was the rather surprising answer.

The bank needed “unambiguous evidence” that the markets were turning before altering its strategy. 

In the event, the bank had to be rescued in the 2008 financial crisis.

Mohamed El-Erian 25 May 2021

https://www.ft.com/content/9f9d00da-afb1-4b51-9a0f-6344df914bd8


WAITING FOR THE LAST DANCE

“So long as the music is playing, you’ve got to keep dancing. We’re still dancing.” 

Chuck Prince, former chairman and chief executive of Citigroup, interviewed only a month before the music stopped 2007. 


https://englundmacro.blogspot.com/2021/03/save-last-dance-for-me.html






The dollar has survived at least four decades-worth of predictions of its demise. Yet...

Yet Druckenmiller’s views on currencies should not be cavalierly dismissed. 

This is the man, after all, who with George Soros “broke” the Bank of England when he made a hugely profitable bet back in 1992 on sterling leaving the European exchange rate mechanism.

The question then is are there circumstances in which what still amounts to dollar dominance suddenly could turn into a dollar rout?

John Plender FT 25 May 2021

https://www.ft.com/content/408d4065-f66d-4368-9095-c6a8743b0d01


Kronkursförsvaret 1992

https://internetional.se/iccab92.htm


Former chancellor Norman Lamont speaks out, 25 years after the UK crashed out of the ERM

He predicted Brexit as far back as the 1990s because he was alarmed at talk of a single currency and political union.

‘My friends said it was just rhetoric, but I realised there was a significant element among European countries that were deadly serious about creating a state called Europe. I personally find that not something I want to live in.

‘I don’t believe you can operate democracy over a multi-lingual, multi-cultural entity, you don’t have the cohesion of society there. I felt this would end in disaster.’

https://www.thisismoney.co.uk/money/news/article-4868334/Norman-Lamont-speaks-Black-Wednesday-25-years-on.html


Lord Lamont was UK chancellor of the exchequer 1990-93

Han höll ett anförande inför folkomröstningen 2003, inbjuden av Medborgare mot EMU

http://www.nejtillemu.com/normanlamont.htm



Centralbankerna fortsätter att bekämpa deflation som vore vi i en finanskris

Inte heller på den så kallade realränteobligationsmarknaden prissätts någon inflationsbrasa. 

Amerikanska inflationsjusterade obligationer indikerar 2,4 procents inflation som snitt under 2020-talet, en nivå som centralbanken anses tolerera eftersom korträntemarknaden visar att det dröjer länge innan en första räntehöjning ligger i korten.

Ett annat sätt att se på detta är att jämföra styrräntorna med nominell BNP-tillväxt, alltså tillväxt i vanlig mening plus inflation. Över en längre tid är det rimligt att dessa är ungefär lika, en idé som förfäktades redan för många år sedan av Lundaekonomen Knut Wicksell (1851-1926), om än i finare nationalekonomiska termer.

Inflationen stiger, långa räntor lyfter och centralbankerna fortsätter att bekämpa deflation som vore vi i en finanskris. Det är vår verklighet under de kommande 12 månaderna.

Det gagnar börsen. 

Henrik Mitelman 25 maj 2021

https://www.di.se/analys/inflationstecknen-rasslar-in-men-tina-vinner-anda-matchen/


Knut Wicksell

https://www.internetional.se/hedgefunds.htm#wicksellstart




2021-05-24

Critics argue the EU’s €5bn plan to boost its ‘hard power’ and arm friendly governments in Africa and elsewhere is reckless

“We are not going to stop the terrorists from killing people just by preaching,” he said. “We need arms. We need military capacities and that is what we are going to provide, to help our African friends. Because their security is our security.”

The African countries of most security concern to Europe were formerly occupied by France.

EU-trained Libyan coastguards have been accused of human rights abuses in their operations to stop migrants crossing the Mediterranean to the EU.

FT May 2021

https://www.ft.com/content/dd29eb4d-1fc0-4123-ada1-290c4c63d966


‘Grey swan’ risks are hiding in plain sight

Was anyone really surprised by the Colonial pipeline ransomware attacks? 

Or the PG&E grid failure? Or Hurricane Katrina, the 2008 great financial crisis, the Fukushima nuclear disaster or the Covid-19 pandemic?

FT 23 May 2021

https://www.ft.com/content/add77982-a162-4a29-a588-47c5cf121b28


Black Swan

https://www.internetional.se/factorpricequal.htm#blackswan





Scandi-noir demolished the myth of the Swedish social-democratic paradise,

where everyone lived in large open-plan apartments overlooking sun-dappled harbours. 

The truth about Swedish society was far darker and more complex. Geiger (Zaffre £12.99), a fast-paced thriller by screenwriter Gustaf Skordeman, sheds light on a little-known era: the political left’s decades-long love affair with the former East Germany until the Soviet Union collapsed in 1989.

FT 17 May 2021

https://www.ft.com/content/a5bb6c30-c6a2-4725-ad34-11d3472ade39



Geiger av Gustaf Skördeman

https://www.bokus.com/bok/9789177954248/geiger/


2021-05-22

Historien om hur det jämlika Sverige förvandlades till ett land med snabbt växande klassklyftor

Samhället dras isär från två håll. 

Den ena förklaringen är den historiskt höga invandringen under 2000-talet 

Den andra förklaringen är att priserna på tillgångar som aktier och bostäder har rusat i värde under lång tid. 

En väninna till mig köpte en villa på Lidingö för 7,4 miljoner kronor för tio år sedan. I dag är samma hus värderat till 16,1 miljoner 

Det finns också ekonomiska risker med att låta boprisrallyt fortsätta utan att lyfta så mycket som ett finger. 

Sist men inte minst borde borgerligheten ställa sig frågan: Är det verkligen detta samhälle som vi vill ha – där du blir rik genom att äga, inte genom egen ansträngning?

Expressen Anna Dahlberg 15 maj 2021

https://www.expressen.se/ledare/anna-dahlberg/aven-hogern-borde-bry-sig-om-de-vaxande-klyftorna/




Ark's Cathie Wood Says Bitcoin Will Still Hit $500,000

https://www.youtube.com/watch?v=4M_fN1ZeGJ4


Bitcoin neither a currency nor financial asset, but ‘looks like a bubble’: Roubini

MarketWatch 24 May 2021

https://www.marketwatch.com/story/bitcoin-not-even-a-reliable-hedge-for-risk-off-events-let-alone-inflation-shocks-nouriel-roubini-11621873405


Ark Invest has lost about nearly $2 billion in investor dollars in May

cathie-woods-ark-innovation-etf.html


The crypto crash, explained with two charts

Hon är duktig, Jemma.

https://www.ft.com/content/c81a3d20-a320-490f-86fa-13e17104fa78



2021-05-21

Professor Jürgen Stark, the ECB’s former chief economist,

accused his former alma mater of carrying out a disguised fiscal bailout of insolvent countries under the guise of quantitative easing

Peer Steinbrück, former leader of the Social Democrats and ex-finance minister, is the latest among a widening group of German elder statesmen to demand an immediate return to economic orthodoxy. 

He warned last week in a joint broadside with Bavaria's ex-premier Edmund Stoiber that galloping inflation risks setting off a “social explosion”, destroying basic trust and the foundations of the German social market economy. 

Their article was undersigned by a roster of German politicians and illuminati spanning the political spectrum.

Ambrose Evans-Pritchard Telegraph 18 May 2021

https://www.telegraph.co.uk/business/2021/05/21/europes-boom-gathers-pace-beware-german-backlash/



How can the world get to net zero emissions by 2050?

The International Energy Agency has mapped out a pathway for limiting global warming to 1.5C

Total energy consumption in 2050 would be less than it is today because of improvements in efficiency, even though the global economy will be 40 per cent larger than it is now.

(Hm)

Existing government climate plans, which were also examined by the IEA in this report, will only cut emissions by 35 per cent by 2050.

FT 21 May 2021

https://www.ft.com/content/f9a03568-1cb1-4218-a519-5fcbe528d03a


Can We Have Both Industrial Civilization and a Habitable Planet?

https://englundmacro.blogspot.com/2021/05/can-we-have-both-industrial.html

 


Annie Lööf

I en recension av pekoralen ”Sanningens ögonblick” summerade tidningen Arbetets kulturredaktör Johannes Klenell antalet ”jag” till 1772, motsvarande drygt två procent av den totala textmängden.

Centerpartiet profilerar sig som ett parti med fjortisar som företrädare och med småbarn som kärnväljare.

Partiledaren själv är kanske det mest påtagliga exemplet.

SvD 20 maj 2021

https://www.svd.se/centerpartiet-har-blivit-ett-fikarum-for-fjortisar




Rather than other countries becoming like the US, the US is becoming more like other countries

An unspoken idea behind post-1945 “modernisation theory” was that the ultimate society was the US. 

Robert Kagan captured this nearly 20 years ago with his observation, “Americans are from Mars and Europeans are from Venus.” But now Americans are abandoning the god of war.

Seven in 10 American millennials now say they would vote for a “socialist”, by which most probably mean a social-democratic Nordic type rather than a Venezuelan expropriator. Biden has heard them.

US in its previous social-democratic phase from about 1933 to 1980 remained innovative: it became the world’s first motorised society, built the atomic bomb and landed men on the moon. 

Simon Kuper FT 20 May 2021

https://www.ft.com/content/a5632495-9450-4c37-af2d-64c7867830b1




Five decades ago an economist at the University of California Los Angeles called Axel Leijonhufvud wrote a comic essay about his discipline

Entitled “Life Among the Econ”, it described the profession as if an anthropologist were observing a traditional community “in the far North”.

 “The facts (a) that the Econ are highly status-motivated, (b) that status is only to be achieved by making ‘modls’, and (c) that most of these ‘modls’ seem to be of little or no practical use,” 

Bernstein and Tedeschi issued a memo last month explaining why. “Summers is flat out wrong,” Bernstein declared.

Summers comes from this mainstream tradition. But the White House trio view the economy as a complex, evolving system without any single equilibrium. 

Gillian Tett FT 20 May 2021

https://www.ft.com/content/ecf08d1b-88e3-4c0e-ae3d-8242f52db278


Summers said monetary and fiscal policymakers had “underestimated the risks, very substantially, both to financial stability as well as to conventional inflation of protracted extremely low interest rates”.

https://englundmacro.blogspot.com/2021/05/policy-projections-suggesting-that.html



Det går inte att blunda för att en Mac är dyrare än en genomsnittlig pc-dator, men du får faktiskt det du betalar för

Vi listar 15 starka anledningar till varför du ska välja en Mac nästa gång du köper en ny dator.

https://macworld.idg.se/2.1038/1.641970/mac-battre-an-pc



2021-05-20

Fossil fuel demand goes into precipitous decline under the IEA's net zero scenario

That is the verdict of the IEA (with the IMF) in its encyclopedic roadmap on global energy on the way to a 1.5 degree world. 

Net zero by 2050 is the closest thing we have to catechism. The report is the bell that tolls for the fossil age. Not even natural gas escapes the cull.

Net zero does not leave the world’s poor behind: it saves them. It is the cheapest way to reach 800 million people with no electricity, and a further 2.6 billion people with no clean cooking option. 

Rural Africa leap-frogs beyond the old model. It goes straight to micro-grids based on solar power and batteries, getting cheaper by the day.

Ambrose Evans-Pritchard Telegraph 18 May 2021

https://www.telegraph.co.uk/business/2021/05/20/ieas-damascene-conversion-net-zero-makes-us-richer-cuts-energy/



2021-05-19

Since early Tuesday, the selloff has erased nearly $500 billion from the total value of all cryptocurrencies

Between September and February bitcoin added about $800 billion in market value. 

https://www.wsj.com/articles/bitcoin-and-dogecoin-prices-tumble-as-investors-sour-on-cryptos-11621435489


Bitcoin tumbles below $40,000 after China issues crypto warning

First Published: May 19, 2021 at 4:12 a.m. ET

https://www.marketwatch.com/story/bitcoin-tumbles-below-40-000-after-china-issues-crypto-warning-11621411944


There will be howls of protest from the crypto-crowd but Beijing may have burst the bubble for good this time.

The intervention of Beijing may prove even more cataclysmic to claims that Bitcoin’s price surge is supported by its inevitable entry into the mainstream. 

Tesla’s brief acceptance was an aberration explained by the whims of its mercurial founder, not the beginning of some embrace by the global financial system, as some mistakenly rushed to declare.

Bitcoin’s longer-term prospects depend on it becoming mainstream.

https://www.telegraph.co.uk/business/2021/05/19/chinese-crackdown-musks-u-turn-threatens-end-bitcoin-craze/



It would be fair to conclude that inflation expectations are moving up. But, at current levels, they will not concern the Federal Reserve all that much

While I understand why the Fed changed its monetary framework, I am unpersuaded it was a good idea.

It means driving while looking into the rear-view mirror.

The stock market is more than generously priced by historical standards, with bubble phenomena everywhere. The doctrines of “modern monetary theory” are highly influential, as well. 

All this together has strengthened lobbies for cheap money and big fiscal deficits, and weakened ones for prudence.

Martin Wolf 18 May 2021

https://www.ft.com/content/5d2aef18-e9c4-486a-8323-c5fc6addf5f7


Can We Have Both Industrial Civilization and a Habitable Planet?

Yves here. Thomas Neuberger raises a question that has troubled us for some time: how much do we have to give up of our modern lifestyles to save the planet? 

On the one hand, if we don’t, Little Home on the Prairie-level civilization is likely to be a good oucome circa 2250. 

Posted on May 19, 2021 by Yves Smith

https://www.nakedcapitalism.com/2021/05/can-we-have-both-industrial-civilization-and-a-habitable-planet.html


America’s climate envoy John Kerry has been ridiculed for saying technologies that don’t yet exist will play a huge role in stabilising the climate.

He said: “You don't have to give up quality of life to achieve some of the things we want to achieve.

BBC 17 May 2021

https://www.bbc.com/news/science-environment-57135506


Germany’s inflation rate is now structurally higher than in Club Med

The euro zone’s central bank ECB is particularly concerned about a higher corporate debt burden in countries with larger services sectors, because this could increase pressure on governments and lenders in these nations.

“As this support is gradually removed, considerably higher insolvency rates than before the pandemic cannot be ruled out, especially in certain euro area countries,” the ECB said in a statement.

CNBC 19 May 2021

https://www.cnbc.com/2021/05/19/ecb-financial-stability-report-may-2021.html

-----

German inflation will break above 3pc this year, the highest since the reunification boom of the early 1990s.  This was not supposed to happen under the implicit contract of the Maastricht Treaty.

Germany’s inflation rate is now structurally higher than in Club Med. Greece, Portugal, and Italy are barely out of deflation. 

The eurozone is once again diverging into opposed blocs at different stages of the cycle, with different needs that cannot be met by a one-size-fits-all policy.

When the Federal Reserve finally hints at monetary tightening it will be turbulent but not life-threatening. When the ECB starts to hint at anything similar, the viability of monetary union instantly comes into doubt. 

We are back to the circumstances of the ERM crisis in 1992 when Deutschland Inc was on fire – after the fall of the Berlin Wall – and its economy was badly out of alignment with other countries that had linked their destinies through the Exchange Rate Mechanism for ideological reasons.

Ambrose Evans-Pritchard Telegraph 18 May 2021

https://www.telegraph.co.uk/business/2021/05/18/taper-tantrum-europe-existential-german-inflation/



There's reasons to be worried about inflation: Jeffrey Gundlach

https://www.youtube.com/watch?v=mcC1SB2tXmY

Neråt i USA och Europa

 









Flera känsliga ekosystem och klimatsystem närmar sig oåterkalleliga tröskelpunkter, så kallade “tipping points”.

 Forskare har identifierat nio ”tipping points”, eller tröskelpunkter, som är aktiva redan idag.

– Det är stora förändringar som vi kan se nu och det är inte baserat klimatmodeller och prognoser. Det här är data på vad som händer just nu, konstaterar Owen Gaffney på Stockholm Resilience Centre.

Owen Gaffney arbetar på Stockholm Resilience Centre. Han har varit medförfattare till en artikel om tipping points som publicerats i tidskriften Nature och är medförfattare till en bok om tipping points. 

Han är även medproducent till en dokumentär med David Attenborough om samma ämne. 

SvT 17 maj 2021

https://www.svt.se/nyheter/vetenskap/experten-om-tipping-points-det-ar-en-kamp-mot-klockan

Inflation’s Magic Number Is Four

The story goes like this. When inflation is low, rising inflation is a good thing for stocks. 

As inflation rises further, the gains for stocks decrease, because deflation risk is forgotten and the prospect of a more active Fed counteracts the continued benefit from a stronger economy. 

The 4% logic isn’t written in stone, but it has reasonable historic support. Since the S&P 500 was created in 1957 U.S. inflation has risen above 4% nine times, and in eight of those cases stocks were lower three months later.

James Mackintosh WSJ May 18, 2021

https://www.wsj.com/articles/inflations-magic-number-is-four-11621355006



2021-05-18

“Policy projections suggesting that rates may not be raised for . . . close to three years are creating a dangerous complacency,” Summers said

Summers said monetary and fiscal policymakers had “underestimated the risks, very substantially, both to financial stability as well as to conventional inflation of protracted extremely low interest rates”.

FT 18 May 2021

https://www.ft.com/content/9935be40-d041-4b7d-acac-4d86f3c25100





Already this year, U.S. companies have authorized $504 billion of share repurchases

Companies’ eagerness to buy their own shares has been credited with helping drive the 11-year bull market that ended last year. 

Between 2010 and the end of 2019, S&P 500 companies poured nearly $5.3 trillion into the stock market through share repurchases

WSJ 16 May 2021

https://www.wsj.com/articles/companies-are-flush-with-cashand-ready-to-pad-shareholder-pockets-11621157406

In 2016, total corporate debt increased by $717 billion, yet investment in plant and equipment fell by $21 billion. 

Where did the money go? Buybacks and dividend payouts

https://internetional.se/shares2016.htm#1801bb


Profits GONE as Debt Used For Record High Stock Buybacks

The Money GPS 19 May 2021

https://www.youtube.com/watch?v=bqlwIPEZGdI

The electrification of (almost) everything is coming, and we’re just not ready for it.

In total, according to a study from Princeton University, electrifying nearly all transport and buildings could contribute to doubling or more the amount of electricity used in the U.S. by 2050. 

If we’re going to rely much more on electricity, we need to know the grid isn’t going to break down. Right now, we don’t know that, even for today’s level of demand. 

Sections of today’s grid were built in the 1950s and 1960s and are approaching end-of-life conditions.

WSJ 15 May 2021


https://www.wsj.com/articles/electrification-of-everything-11620843173

Former CEO of Washington Mutual foresees another housing bubble

When the subprime bubble burst, the bank’s fortunes quickly turned. In September 2008, at the height of the financial crisis, Killinger was forced out by the company’s board, and ultimately the bank was seized by federal regulators. 

It still stands as the largest bank failure in U.S. history.

In their new book, “Nothing Is Too Big to Fail: How the Last Financial Crisis Informs Today,” 

Kerry Killinger and his wife Linda, who previously served as the vice chair of the Federal Home Loan Bank of Des Moines, explore WaMu’s failure, the government’s response to the last crisis and where there is growing risk in today’s economy.

MarketWatch 18 May 2021

https://www.marketwatch.com/story/the-former-ceo-of-washington-mutual-foresees-another-housing-bubble-and-he-blames-the-fed-11621287287


Financial Crisis at IntCom

https://internetional.se/hedgefunds2016.htm


https://www.goodreads.com/book/show/55319107-nothing-is-too-big-to-fail

Allt tyder på att inflationen nu lyfter. Men Riksbanken kommer inte att reagera förrän det är för sent.

Nu är det bara några medelålders ekonomer som kommer ihåg att centralbankernas viktigaste uppgift är att bekämpa inflationen. För det var så det var tänkt på den tiden.

Istället för att acceptera det som vi konsumenter gillar – lägre priser på tvättmaskiner med mera – så skulle Stefan Ingves och hans kolleger runt om i världen säkerställa att priserna prompt borde öka med 2 procent. 

Från Norrmalmstorg går jag till ett kafé i närheten av centralen och äter en minismörgås med en liten bryggkaffe. 78 kronor. Jag accepterar och justerar förväntningsbilden.

Henrik Mitelman 18 maj 2021

https://www.di.se/analys/overhettning-nara-ingves-kommer-inte-att-agera-innan-det-ar-for-sent/



Det fanns en tid då EU kunde framstå som en förebild för världen

Martin Winter som under många år var kollega som korrespondent för Suddeutsche Zeitung i Bryssel har skrivit en klarsynt analys över tillståndet i EU (i tidskriften Cicero). 

Hans slutsats är att coronakrisen på ett alarmerande sätt blottat svagheterna i EU-bygget.

Under lång tid har tankarna på en allt starkare sammanslutning inom EU byggt på föreställningen att en liten grupp kärnländer med Tyskland och Frankrike i spetsen skulle bilda ett avant garde. Kärnan skulle fungera som ett gravitationscentrum skulle attrahera andra länder att följa efter. 

Det är ju tankefiguren bakom den gemensamma valutan.

Rolf Gustavsson SvD 17 maj 2021

https://www.svd.se/maste-super-mario-radda-aven-eu-nu


2021-05-17

Det har aldrig varit så billigt att köpa bostad /äga snarare/

Tittar man dessutom på ränteutgifterna som andel av hushållens inkomster har de aldrig varit så låga som nu.

Emma Persson, privatekonom på Länsförsäkringar, är inne på samma linje.

– När man väl kommer in på bostadsmarknaden är det så, men man vet aldrig vad som händer med räntorna framöver, säger hon.

SvD 17 maj 2021

https://www.svd.se/ekonom-har-aldrig-varit-sa-billigt-att-kopa-bostad

Downing Street is nervously eyeing the date of July 12 - The Battle of the Boyne

 — the anniversary of the victory of the protestant William of Orange over the deposed Catholic king James II in 1690 — as a particular flashpoint. 

https://www.ft.com/content/0d713dc4-b9b5-4350-9faa-ff0017c9bb94

The Battle of the Boyne was fought on 1 July 1690 between the armies of the Catholic King James II of England, Scotland and Ireland and the Protestant Dutchman William of Orange.

William had deposed James, his uncle and father-in-law, from the throne in the Glorious Revolution of 1688 

but James had escaped to France, then Europe's premier military superpower, who had rearmed the fallen monarch and fellow Catholic in the interests of seeing William, an enemy of Louis XIV, brought down.

Revitalised, James had begun his campaign to regain the English crown in Ireland in 1689.

The Williamites feared the consequences of a Catholic resurgence and took up arms to protect the new status quo. Interestingly, their cause even had the backing of the Pope, who was opposed to King Louis's imperialistic warmongering.

The date of the Battle of the Boyne can never be forgotten as, oddly, it remains an immovable fixture in the calendar of Apple iPhones.


https://www.independent.co.uk/news/world/europe/battle-of-the-boyne-what-when-william-orange-james-ii-ireland-protestant-a8990456.html


THE DISMAL SCIENCE

https://www.nakedcapitalism.com/category/the-dismal-science



2021-05-16

Grundvattnet i Kalifornien

U.S. Drought Imperils Economy in California’s Farm Country

The U.S. Bureau of Reclamation has cut the water allocations for many to zero this year. 

Last year, when the latest dry spell began, the same farmers were allocated 20% of what they are contracted to receive annually.

Growers are paying four times normal prices for water and letting almond trees die as federal government cuts or ends water allocations

Drought is afflicting 88% of the American West, up from 40% a year ago

WSJ 21 May 2021

https://www.wsj.com/articles/drought-imperils-economy-in-californias-farm-country-11621589407


Drought-stricken western states face a water crisis and another dangerous fire season

MarketWatch May 15, 2021

https://www.marketwatch.com/story/drought-stricken-western-states-face-a-water-crisis-and-another-dangerous-fire-season-11621006692


In California, dry soils and a warmer than average spring this year caused an “historic and unanticipated” reduction in the volume of water flowing into the state’s major reservoirs, several of which were “extremely low,” 

Average rainfall during the past 30 years also decreased in parts of the west of the country while increasing elsewhere, NOAA found.

FT 14 May 2021

https://www.ft.com/content/ae129704-b9db-4609-a81d-ff34575af2bc


NOAA

https://www.noaa.gov/news-features




Free society is finished if we fail to resist this new Dark Age of unreason

Many years ago someone who was not remotely sympathetic to Communism told me that he dreaded the collapse of the Soviet Union because the Cold War balance of threat between the two superpowers was the only thing preventing global chaos. 

In the West where it was legally possible to converse about these things, there was ongoing and very serious discussion of the merits of capitalism and private enterprise vs state ownership of property and a command economy.

We have returned to a Dark Age where reason and actual disputation are considered dangerous: where views contrary to those being imposed by what are often nothing more than activist cults can be criminalised. 

Janet Daley Telegraph 15 May 2021


https://www.telegraph.co.uk/news/2021/05/15/free-society-finished-fail-resist-new-dark-age-unreason/




A new paradigm for teaching economics does exist

The CORE Project is an online teaching tool and free, open-access textbook. 

For example, in contrast to conventional economics, CORE assumes that individuals are pro-social and myopic, rather than selfish and far-sighted. Competition is imperfect, with winner-take-all characteristics, rather than perfect. 

Power is ever-present in the form of principal-agent relationships in labor and credit markets, instead of being treated as either diffuse or exogenous. 

The ideas dominant since the 1980s – variously called the Washington Consensus, market fundamentalism, or neoliberalism – originally gained traction because of the perceived failures of Keynesianism and excessive government regulation. 

But they took on a life of their own and produced highly financialized, unequal, and unstable economies that were unequipped to cope with today’s most significant challenges: climate change, social inclusion, and disruptive new technologies.

All of our previous policy paradigms – whether mercantilist, classical liberal, Keynesian, social-democratic, ordoliberal, or neoliberal – had important blind spots because they were conceived as universal programs that could be applied everywhere and at all times. 

The right answer to any policy question in economics is, “It depends.” 


Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.

Project Syndicate 11 May 2021

https://www.project-syndicate.org/commentary/economic-policy-must-abandon-universal-paradigms-by-dani-rodrik-2021-05


The CORE Project

https://www.core-econ.org

Mer av Rodrik

https://englundmacro.blogspot.com/search?q=Rodrik


2021-05-15

Bitcoin is Cryptonite for Capitalism

Rolf Englund på Facebook 14 May 2021


Rising inequality was becoming ever more of a political issue, threatening to provoke popular backlashes against capitalism itself.

FT 14 May 2021


https://www.ft.com/content/747a76dd-f018-4d0d-a9f3-4069bf2f5a93





2021-05-14

The once-a-decade headline would be a given: “Interest rates go negative.”

The fall in interest rates over the past 40 years is the story that, along with its brother in arms, money printing, explains all other financial stories. 

Merryn Somerset Webb FT 14 May 2021

https://www.ft.com/content/3be9697a-d13b-4e5f-b960-14f587f8c820





The elephant in the room is the bloated stock of money sitting in bank accounts

The excess savings of US households have reached $2.3 trillion. 

The New York Fed said people have been using a third of their unspent holdings to pay off debt. But that does not mean they will continue to do so. They may go on a spree instead as the country reopens.

Interest rates are zero and the Fed is still buying $120bn of bonds each month, directly financing part of Washington’s "war economy" debt issuance. 

It is persisting even though the broad M3 money supply has grown at 24pc over the last year. 

Ambrose Evans-Pritchard Telegraph 13 May 2021

https://www.telegraph.co.uk/business/2021/05/13/markets-losing-faith-federal-reservescredibility/


When the Fed increases the money supply, people they just sit on it

“What problem is cryptocurrency supposed to solve, exactly?” And at some point the answer always devolves to some version of “Fiat money is doomed because the Fed won’t stop running the printing press.”

So it seems to me that it would be useful to talk about why that’s a really bad take, and has been a bad take over and over again for the past 40 years.

These aren’t new insights. I wrote about all of this in the context of Japan back in the 1990s, and even that was mainly a formalization of insights many economists had held for decades. 

Paul Krugman NYT 13 May 2021

https://www.nytimes.com/2021/05/13/opinion/cryptocurrency-inflation.html


Summers Says Inflation Is Making Him Nervous

https://www.youtube.com/watch?v=WtGCmexfxO4





2021-05-13

House prices soared even as the world suffered its worst slump since the Great Depression.

From New Zealand to the United States, Germany, China and Peru, the same phenomenon has taken hold: home prices are skyrocketing, and many buyers are panicking.

https://edition.cnn.com/2021/05/13/business/global-real-estate-prices/index.html


Americans expect home prices to rise — but most people think it’s a good time to buy a home anyway

Gallup’s survey found that 71% of Americans believe that home prices are going to increase over the next year in their local market. This is the highest reading since Gallup began tracking this data point, though it is not statistically different from 2005’s measure of 70%.

MarketWatch May 11, 2021

https://www.marketwatch.com/story/the-vast-majority-of-americans-expect-home-prices-to-rise-but-most-people-think-its-a-good-time-to-buy-a-home-anyway-11620683759





Why the English are complacent and the French apocalyptic

 In the 2017 election, a divided pessimist vote let Emmanuel Macron’s small optimists’ party into power. 

Yet each strand of the French spectrum still nurtures its pet apocalyptic scenario: neoliberal hegemony for the left, Islamist takeover for the far right, climate apocalypse for greens, end of national grandeur for Gaullists and Présidente Le Pen for Macronists.

Simon Kuper FT 13 May 2021


https://www.ft.com/content/f11a1c21-4744-4b7d-afdb-f361c1d3a319

Strandpromenaden nära båten mot Nybroplan med Pizza

 









FILM OM LIDINGÖ FÖR DEMENSDRABBADE

Han som gjort filmen heter Erik Kotschack

Min pappa hade några gånger äran att spela tennis med hans pappa, grundare av Radio Nord

https://www.lidingonyheter.se/film-om-lidingo-for-demensdrabbade/


https://www.traditionstv.se/#Filmer-dinstad


Swedbanks chefsstrateg

 



Mattias Isaksson, chefsstrateg på Swedbank räknar med volatila börser både i USA och Sverige den närmaste tiden.

SVD 13 maj 2021



2021-05-12

Wall Street onsdag


 

Cathie Wood’s ARK Innovation ETF

 falls to new low for the year, off nearly 35% from recent high

More than $1.1 billion of fund flows have left Ark Innovation this month. Ark Invest — including its five core ETFs — has lost about nearly $2 billion in investor dollars in MayCNBC 10 May 2021

CNBC 10 May 2021

https://www.cnbc.com/2021/05/10/cathie-woods-ark-innovation-etf-falls-to-new-low-for-the-year.html


 

‘I have no doubt, none whatsoever

‘I have no doubt, none whatsoever, that we are in a raging mania in all assets. 

I also have no doubt that I don’t have a clue when that’s going to end.’

— Stanley Druckenmiller

MarketWatch 11 May 2021




The consumer price index soared 0.8% in April to match the biggest monthly increase since 2009, the government said Wednesday. 

Economists polled by Dow Jones and The Wall Street Journal had forecast a milder 0.2% advance. MarketWatch 12 May 2021