Englund

 It is not often that I take a very strong view that runs directly counter to the market consensus.  On the rare occasions in the past that I have done so, it has been an uncomfortable feeling at first. As highlighted by a recent Bank of America survey, markets are currently dominated by a consensus based on three core hypotheses: durable high global growth; transitory inflation; and ever-friendly central banks. Mohamed El-Erian FT 30 June 2021 https://www.ft.com/content/77ed35a0-cf91-4c7e-b779-a57ecc6b1045 Near Zero until 2023. Really? Imagine how much borrowing will be until then. The debt level and the leverage will reach the sky. https://englundmacro.blogspot.com/2021/06/near-zero-until-2023-really.html Inflation och handelsbalans. Englunds lag 2,0. https://englundmacro.blogspot.com/2021/04/inflation-och-handelsbalans-englunds.html

 reviving fears of more wildfires and concerns for the health of vulnerable citizens not likely to have air conditioning. Predicted to be “historic, dangerous, prolonged and unprecedented,” according to the National Weather Service, the region’s temps are rewriting the record books. MarketWatch 28 June 2021 https://www.marketwatch.com/story/portland-and-seattle-brace-for-100-degrees-whats-a-heat-dome-and-how-is-climate-change-bringing-these-extremes-11624638636 I Seattle i delstaten Washington i nordvästra USA väntas rekordtemperaturen 41 grader https://englundmacro.blogspot.com/2021/06/i-seattle-i-delstaten-washington-i.html Avoid areas vulnerable to sea level rise, wildfire and unsafe heat Insurance companies are regularly dropping homeowners’ policies in vulnerable areas because of the risk involved, a trend we should expect to accelerate. MarketWatch  1 July 2021 https://www.marketwatch.com/story/record-heat-and-your-retirement-why-the-climate-crisis-should-factor-into-you...

 ...that would threaten financial stability, in a sign of growing concern over rising property prices at the central bank. “I’m not predicting that we’ll necessarily have a bust. But .... The median price for sales of existing homes was up 23.6 per cent year-on-year in May, topping $350,000 for the first time. FT 28 June 2021 https://www.ft.com/content/ff83ed04-3bb5-444a-9af0-1b466201ef67 Near Zero until 2023. Really? The debt level and the leverage will reach the sky. The market will force the Fed to act earlier, I think. Englund blogg  17 June 2021 https://englundmacro.blogspot.com/2021/06/near-zero-until-2023-really.html  

 

SvD/TT 28 juni 2021   Sonja Molly Matilda Guggenheimer är 24 år och bor i en lägenhet i Stockholm. Hon fyller 25 år den 11 september. Hennes lägenhet är värderad till ca 3 900 000 kr. Detta enligt Hitta.se Susanne Spector, chefsanalytiker på Nordea. https://www.svd.se/efter-lofvens-nya-besked--sa-paverkas-ekonomin Nils Lundgren var chefsekonom på Nordbanken. Nils Lundgren meddelade regeringen om att en artikel med detta innehåll skulle publiceras på Dagens Nyheter på måndagen. Artikeln faxades under fredagskvällen över till Olle Wästberg, som per telefon framförde till Lundgren att han såg mycket allvarligt på artikelns publicering. Men order var fritt. Anne Wibble fick kännedom om debattartikeln under en resa utomlands. När artikeln infördes i Dagens Nyheter på måndagen den 28 september fick den i detta läge provokativa rubriken "Kronans fall nära", med underrubriken "Det är inte värre att devalvera än att bibehålla dagens räntenivå, menar Nils Lundgren." https://w...

https://www.bbc.com/news/av/world-us-canada-57535203 Heat waves across the US West are already straining electricity supplies https://englundmacro.blogspot.com/2021/06/heat-waves-across-us-west-are-already.html The Panama Canal faces a creeping threat from climate change, including droughts so intense that ships sometimes reduce their cargo so as not to run aground, and giant storms that almost overwhelm its dams and locks, canal officials say. WSJ 28 June 2021 https://www.wsj.com/articles/panama-canal-tackles-climate-change-puzzle-too-little-rainwater-or-too-much-11624872601

The idea of a Cold War II between the West and China has quickly evolved from a misleading analogy into a self-fulfilling prophecy.  But contemporary China is nothing like the Soviet Union, and in today's world, we simply cannot afford another clash of mutually exclusive systems. Joschka Fischer Project Syndicate 21 June 2021 Nice pic https://www.project-syndicate.org/commentary/cold-war-comparison-misleading-and-dangerous-by-joschka-fischer-2021-06 Africa to propel world’s population towards 10bn by 2050 Sub-Saharan Africa’s population is set to double over the next 30 years, adding an additional 1bn people https://englundmacro.blogspot.com/2019/06/africa-to-propel-worlds-population.html  

  Värmeböljan som nu pressar regionen kommer ovanligt tidigt i säsongen och gör att brandmyndigheter befarar att ännu ett svårt brandår är på väg i västra USA och Kanada Bildtext: Sarah O'Sell i Seattle har köpt en ny luftkonditionering.  SvD 27 juni 2021 https://www.svd.se/rekordhetta-drabbar-usa-och-kanada--40-grader 2050 kommer lika mycket energi att användas till världens luftkonditionering som hela Kina använder i dag för att producera all sin elektricitet” https://englundmacro.blogspot.com/2020/08/det-ar-kort-sa-kan-man-helt-kort.html

 Fueled by negative real interest rates, the Fed has blown another housing bubble. MISH JUNE 24, 2021 https://mishtalk.com/economics/real-interest-rates-are-more-negative-now-than-in-the-2004-2007-housing-boom

 I kronor ligger Stockholm i topp med en snittökning på 1 675 541 kronor. https://omni.se/statistik-lidingovillan-har-okat-2-000-kronor-per-dag/a/nA3Erm KI-prognos: Höjd ränta dröjer till 2024 https://omni.se/kiprognos-hojd-ranta-drojer-till-2024/a/zgdpmK Near Zero until 2023. Really? Imagine how much borrowing will be until then. The debt level and the leverage will reach the sky. https://englundmacro.blogspot.com/2021/06/near-zero-until-2023-really.html

 anything going on in random meme stocks or scamcoins, because of the absolutely enormous amounts of money involved. Mish 21 June 2021 https://mishtalk.com/economics/exploring-the-idea-theres-never-been-a-better-time-to-borrow

 Born in Luxembourg in 1886 and naturalised as a French citizen, Schuman briefly supported Marshal Pétain, who would be sentenced to death for being a Nazi collaborator in World War Two.  After the German occupation of France in 1940, Schuman was arrested by the Gestapo but managed to escape a year later, and went on to live in hiding until the end of the war. BBC  19 June 2021 https://www.bbc.com/news/world-europe-57534918 Europe’s founding fathers: Jean Monnet, Paul-Henri Spaak, Robert Schuman, Alcide de Gasperi, and others. http://www.nejtillemu.com/schumanmonnet.htm Den 9 maj ska högtidlighållas i hela unionen som Europadagen till minne av  Robert Schumans förklaring som inledde det europeiska integrationsprojektet. http://www.nejtillemu.com/symboler.htm Rome, Habsburg and the European Union https://www.internetional.se/paxromana.htm

Första AP-fondens vd Kristin Magnusson Bernard ”Jag tror att det är ett regimskifte. Vi kommer att få en större roll för finanspolitiken framåt, till skillnad från vad som har varit fallet de senaste 20-30 åren. Bakgrunden är en insikt om att det finns en del saker man kan uppnå med finanspolitik som är svåra att uppnå med penningpolitik”, säger hon i Di-podden Makrorådet. Viktor Munkhammar DI 17 juni 2021 https://www.di.se/analys/experterna-pagar-ett-regimskifte-i-ekonomiska-politiken/ 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 https://englundmacro.blogspot.com/2014/08/skriande-uppenbart.html  

  Already, power grids across the West and South are under strain this week amid a heat wave that has caused a surge in electricity demand, the first of several expected this summer.  Grid operators in both Texas and California have called on people to conserve power by reducing reliance on air conditioning, among other things, to avoid the need for rolling blackouts to bring demand in line +with supply. 18 June 2021 https://www.wsj.com/articles/west-risks-blackouts-as-hydroelectric-power-dries-up-11624008601 PG&E, which serves 16 million people in Northern and Central California, has relied heavily on what are known as public safety power shut-offs in recent years, after its power lines sparked a series of wildfires in 2017 and 2018 that killed more than 100 people. https://www.wsj.com/articles/pg-e-warns-of-more-blackouts-during-californias-wildfire-season-11623414658 U.S. Drought Imperils Economy in California’s Farm Country https://englundmacro.blogspot.com/2021/05/gru...

Håller prognosen har Sverige då haft noll- eller minusränta tio år i rad. Anna Breman, nyaste leda­moten i Sveriges räntedirektion, har med sig rötterna från Motala Riksbanken erbjuder även lån till bankerna till reporänta, det vill säga noll ränta, mot att de lånar ut till företag – till valfri ränta. Hittills har bankerna bara utnyttjat en tredjedel, 165 mdr av den beslutade maxvolymen på 500 mdr. Sveriges inflationsmål på 2 procent definierades av Riksbanken och infördes formellt 1995. Sedan dess har banken missat KPIF-målet i 308 av 317 månader, motsvarande 97 procent av tiden, 26,5 år. Ålder: 45 år. Tjänar: 202 000 kr/mån. https://www.di.se/nyheter/vice-riksbankschefen-krisstodet-bestar/ Near Zero until 2023. Really? https://englundmacro.blogspot.com/2021/06/near-zero-until-2023-really.html  

Han är född 1949, således bara åtta år yngre än jag. https://www.di.se/nyheter/inflationsspoke-skrammer-goran-persson-da-kan-det-bli-riktigt-dystert/ Om honom på Wikipedia https://sv.wikipedia.org/wiki/G%C3%B6ran_Persson - Ett av de avgörande argumenten för mig mot en federal utveckling är att jag tror inte att det kommer att gå att skapa ett europeiskt parlamentet som kommer att upplevas som legitimt som lagstiftare av folkflertalet i Europa, säger Göran Persson https://englundmacro.blogspot.com/2012/01/merkel-och-goran-persson-om-politisk.html

 Back in the old days — the ones younger readers may not even remember — interest rates were generally higher than inflation.  For years now, asset markets have been all about working with falling inflation and interest rates with a vast side order of quantitative easing (QE). There is no bigger deal than that changing Merryn Somerset Webb FT 18 June 2021 https://www.ft.com/content/1d3f83a8-4044-4c9d-a7b4-1aafbfbedf88 Real men are not afraid of a little inflation. But they are scared of stagflation https://englundmacro.blogspot.com/2021/06/real-men-are-not-afraid-of-little.html

Acast tog in över 1,3 miljarder kronor i en nyemission i samband med börsnoteringen. Bland ankarinvesterarna fanns pensionsjätten Alecta, Första AP-fonden och Handelsbanken Fonder, tillsammans med riskkapitalbolagen Kuvari Partners och Lugard Road Capital. Men när företagets aktier under torsdagsmorgonen började handlas på First North rasade kursen. Efter tio minuters handel var nedgången omkring 10 procent. Acast har stark tillväxt. Men vinst är något som ligger flera år fram i tiden. Enligt bolagets finansiella mål ska bolaget nå lönsamhet på ebitda-nivå inom tre till fem år. SvD 17 juni 2021 https://www.svd.se/acast-rasar-i-borsdebuten/i/senaste/om/naringsliv

Imagine how much borrowing will be until then. The debt level and the leverage will reach the sky. The market will force the Fed to act earlier, I think. Fed signals first rate rise will come in 2023 FT 16 June 2021 https://www.ft.com/content/0bf83e29-5ee2-415e-9e03-0edb38218bf3

 The joy of returning to real life When we go online, we tend to choose our experiences and the boundaries of our vision. But in the real world we have less control over what we might bump into. Other people and other realities intrude.  This is immensely valuable after a year in which we have been cooped up, not just in a physical or social sense, in our homes and friendship groups, but also, all too often, in a mental sense, only watching the people and events on our screens. https://www.ft.com/content/eedeb279-808c-41cf-984e-d60a2322daa7

 despite debt boom, inflation concerns Spreads in the biggest part of the roughly $10.7 trillion U.S. corporate bond market hit a post-2008 financial crisis MarketWatch June 16, 2021  https://www.marketwatch.com/story/corporate-bond-spreads-hit-new-post-2008-low-despite-debt-boom-inflation-concerns-11623864594

Michael Burrys meritförteckning är att han med hedgefonden Scion Capital förutsåg och spelade och vann stort på subprimehärvan  och finanskrisen 2007 - 2008. Han populariserades med spelfilmen The Big Short  Marknaden kan som bekant förbli irrationell längre än du kan sitta med negativa positioner mot marknadsriktningen (the market can stay irrational longer than you can stay solvent). Postningen på Twitter igår från Burrys verifierade konto är den sjunde någonsin, och egentligen den första som berör marknaderna alls, så det handlar inte om någon som ständigt kraxar om domedagen. Cornucopia 16 juni 2021 https://cornucopia.cornubot.se/2021/06/borserna-ner-i-asien-pa-onsdagsmorgonen.html

Its level at any given point reflects all available information up to that point. Mark Hulbert MarketWatch 15 June 2021 https://www.marketwatch.com/story/the-odds-of-the-dow-being-higher-at-the-end-of-2021-are-about-two-in-three-11623737505

based on rising bond yields, stretched valuations and speculative behaviour by market participants. This may or may not be true. A market correction is certainly possible but any real threat to global financial stability will continue to be met with massive doses of monetary and fiscal stimulus. What worries me more is that debt in comparison to gross domestic product is now at record levels in the US, eurozone, UK, Japan and China.  Eric Knight FT 10 June 2021 https://www.ft.com/content/4f918e25-5947-4488-913d-5310191dc387

After the 2008 global financial crisis, governments and central banks in advanced economies vowed that they would never again let the banking system hold policy hostage, let alone threaten economic and social well-being.  But although governments and central banks succeeded in reducing the systemic risks emanating from the banking system, they failed to understand and monitor closely enough what then happened to this risk. Given the magnitudes involved, it is not surprising that central banks in particular are treading very carefully these days, fearful of disrupting financial markets in a manner that would undermine the post-pandemic economic recovery. Mohamed A. El-Erian Project Syndicate 9 June 2021 https://www.project-syndicate.org/commentary/policymakers-must-act-now-to-mitigate-financial-risks-by-mohamed-a-el-erian-2021-06 Mohamed A. El-Erian, President of Queens’ College, University of Cambridge, is a former chairman of US President Barack Obama’s Global Development Council....

The Fed is set to discuss the intensifying pressure in US money markets at its meeting this week, after record sums of cash were parked at the central bank overnight on Monday at a zero interest rate. FT 15 June 2021 https://www.ft.com/content/1c3ec473-e08f-4057-87ec-dcfa0f784521

 The best way of looking at things is a month-by-month take since the beginning of the recession. Since May of 2020, bank loans and leases, and commercial loans have shrunk in a continuous fashion. Both are barely above where they were pre-Covid-19. Is this all we get out of expansion of the Fed's balance sheet by $3.7 trillion, from $13.4 trillion to $17.1 trillion coupled with trillions of dollars of stimulus from Congress? I am afraid so. And it means businesses just do not want to expand.  Mish 15 June 2021 https://mishtalk.com/economics/charts-that-should-scare-the-pants-off-the-fed-and-probably-do

  Article corrected throughout to reflect Jamie Dimon said the bank has $500 billion in cash, not $500 million, per an incorrect transcript. Last Updated: June 14, 2021  https://www.marketwatch.com/story/dimon-jpmorgan-is-sitting-on-about-500-million-in-cash-waiting-to-invest-in-higher-rates-11623700397 RE: Man kan förstå att misstaget slank igenom. 500 miljarder dollar är mycket. Inte har dom månadssparat ihop pengarna på ett ISK-konto. De har lånat hos Fed till typ nollränta. Det kan man om man är bank.

If Schäuble really wants to follow Keynes’ advice, Germany should borrow more and focus less on others’ spending habits Lorenzo Bini Smaghi, a former executive director at the European Central Bank, explains why Germany’s former finance minister’s recent push for a return to “normal” is misguided.  ECB Presidents, Mario Draghi until October 2019 and then Christine Lagarde, repeatedly called for a more balanced and supportive fiscal policy to reduce the burden on the central bank. The German constitutional debt brake, which was introduced in 2009, is particularly relevant in this respect, given it accounts for about a third of eurozone GDP FT 14 June 2021 https://www.ft.com/content/323a1e8c-8dda-4d49-92b1-9ef051a18825

 Olivier Blanchard, the IMF’s chief economist 2010 called for several bold innovations. Central banks should raise their inflation targets https://www.internetional.se/realr.htm#bold “Stagflation” remains a word not uttered in the polite company of the financial world. During the 1973-74 bear market S&P 500 fell 45%. https://www.internetional.se/toft/stagflation.htm

Uppdaterade estimat över den finansiella cykeln visar att det finns risk för att en bubbla byggs upp på de finansiella marknaderna i euroområdet, som så småningom brister, har ökat märkbart” skriver Commerzbank-ekonomen Michael Schubert i ett kundbrev. Han noterar att framväxande bubblor på finansmarknaderna och klimatförändringarna har ett antal likheter. Frank Elderson, medlem av ECB:s direktion, berörde dessa likheter i ett tal vid BIS-konferensen ”Den Gröna Svanen” i början av juni.  DI/Direkt 14 juni 2021 https://www.di.se/live/commerzbank-risk-for-bubbla-pa-euroomradets-finansmarknader-markbart-hogre/ The Green Swan Conference https://www.bis.org/events/green_swan_2021/overview.htm Nicholas Nassim Taleb, The Black Swan Mauldin https://englundmacro.blogspot.com/2020/07/nicholas-nassim-taleb-black-swan-mauldin.html

 Inflation is on the rise – but just wait until the electric vehicle revolution starts turbocharging prices, Stagflation  Oil prices have risen 80pc over the last year – as the global economy has rebooted. Food inflation is soaring, with global wholesale crop prices up an extraordinary 40pc in May, compared with the same month last year. Copper prices have more than doubled over the last year, for instance, given that electric cars need five times more of it than conventional vehicles.  And then there’s the looming danger that efforts to unwind or even just slow QE could provoke yet another nasty meltdown, as bloated financial asset prices collapse. A nasty inflation spike would destroy business confidence and hammer investment, causing “stagflation” Liam Halligan Telegraph 13 June 2021 https://www.telegraph.co.uk/business/2021/06/13/yes-inflation-rise-just-wait-electric-vehicle-revolution-starts/ Fed tapering?   Latest Fed meeting minutes indicated that “a number ...

 – Det var inget jag reflekterade över när jag tog jobbet, säger hon. Då frågar jag igen, är det inte rimligt att du som finansmarknadsminister har en uppfattning om riskerna för en krasch på bostadsmarknaden? – Jag tror att det också ingår i jobbet som minister att vara lite försiktig i frågor där vi inte vet svaret.  Joel Dahlberg SvD 12 Juni 2021 https://www.svd.se/behover-inte-betyda-att-vi-har-en-bostadsbubbla Åsa Lindhagen 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 https://englundmacro.blogspot.com/2021/05/forslag-om-en-ny-riksbankslag.html  

The German constitution remains sovereign and the Verfassungsgericht reserves the right to strike out any EU law or treaty. Is the EU a unitary superstate akin the United States, or is it a club of fully sovereign states that remain the “Masters of the Treaties”, as the German court famously insists? But it also forces a showdown that could have fateful consequences. Eurosceptics deem it a judicial coup d’etat.  “Every EU member states knows that Germany would never have accepted the Lisbon Treaty without this right of oversight. Disregarding democratic principles and the sovereignty of the member states raises doubts about the Commission’s own legitimacy,” said Peter Gauweiler, a Bavarian conservative and serial litigant at the court. Ambrose Evans-Pritchard Telegraph 11 June 2021 https://www.telegraph.co.uk/business/2021/06/10/ecb-keeps-printing-money-german-inflation-soars/ Brussels has launched legal action against Germany’s constitutional court after its judges attempted to ch...

SvD har tagit del av statistik från Thomson Reuters som visar att värderingen nu är skyhög bland de 50 största bolagen. Det genomsnittliga p/e-talet är 27, mätt på nästkommande års vinst.  Allt över 20 brukar anses som mycket högt. SvD 11 juni 2021 https://www.svd.se/hon-varnar-for-skyhoga-varderingar-pa-borsen

Three decades ago, the British economist John Williamson coined the phrase “Washington consensus” to describe a collection of free-market, pro-globalisation ideas that American leaders (among others) were promoting around the world.  Now, however, a new tag is in the air: the “Cornwall consensus”.  Don’t laugh. That is really the title of an advisory memo circulated ahead of the G7 leaders meeting in Cornwall on Friday.  Gillian Tett FT 10 June 2021 https://www.ft.com/content/aa45eccb-5e0e-477a-8278-db7df959e594 Eskilsson, Sture, Timbro 1990. Motvind, medvind  https://www.svensktidskrift.se/sture-eskilsson-bra-for-sverige/ A new paradigm for teaching economics does exist https://englundmacro.blogspot.com/2021/05/a-new-paradigm-for-teaching-economics.html

I år är det 150 år sedan det andra tyska riket grundades med en spektakulär akt i Spegelsalen på slottet Versailles.  Det första tyska riket var det som benämnts ”Det heliga romerska riket av tysk nation”, eller Tysk-romerska riket. Riket byggde på fiktionen att det vidareförde Romarriket.  Romarriket fanns emellertid kvar, det hade sin huvudstad i Konstantinopel  SvD Under strecket 7 juni 2021 https://www.svd.se/det-utdomda-riket-som-blev-en-forebild-for-eu Brussels has launched legal action against Germany’s constitutional court after its judges attempted to challenge the supremacy of EU law  The commission said it had sent a formal notice to Germany for “violation of fundamental principles of EU law”, and gave it two months to reply. If that response is unsatisfactory, the procedure could go to the ECJ. FT 9 June 2021 https://www.ft.com/content/76aabe45-883f-4e3a-80d8-95928db47063 Rom-fördraget är EU:s grunddokument.

Investeringsbolaget Fidelio, som backas av flera kända finansfamiljer och miljardärer som Katarina Martinson DI 9 juni 2021 https://www.di.se/nyheter/smaspararna-nobbas-i-ny-jattenotering-blir-den-storsta-sedan-eqt/

US federal deficits of 16.7 per cent of GDP this fiscal year and 7.8 per cent next year.  Meanwhile, most members of the Federal Reserve’s board expect interest rates to stay near zero even until the end of 2023.  By the time the economy finally reaches the point when the Fed starts to tighten, it will be smoking hot (at “maximum employment”) and, inevitably, getting hotter. That is what happened in the 1970s. Remember: the Volcker shock triggered the Latin American debt crisis. This time, there is much more debt around almost everywhere. A severe monetary tightening would create even more devastation than then. Martin Wolf 8 June 2021 https://www.ft.com/content/6f23cf87-0e66-4b6b-bf36-8c73f1bfbd9d Kaletsky menar att det var Paul Volcker som ledde återgången till "demand management". - In the United States, the return to demand management began as early as the summer of 1982, when a three-year recession and the bankruptcy of the Mexican government persuaded the Fed that its e...

In a forecast that is well outside the consensus from policymakers and Wall Street, Deutsche issued a dire warning that focusing on stimulus while dismissing inflation fears will prove to be a mistake if not in the near term then in 2023 and beyond. To be sure, the Deutsche position is not widely held by economists. Most on Wall Street and at the Fed see inflation is a temporary problem that will ebb as special factors fade away. CNBC 7 June 2021 https://www.cnbc.com/2021/06/07/deutsche-bank-warns-of-global-time-bomb-coming-due-to-rising-inflation.html Deutsche Bank Issues Stark US Inflation Warning, Seeing Economic Parallels to 1940s, 1970s Inflation could send the global economy into recession as central banks lose control, according to Deutsche Bank. The current political climate means that jobs growth may be a higher priority in the coming years than keeping inflation at bay. Unlike in the early 1980s, when then-President Ronald Reagan supported Fed Chair Paul Volcker “putting the ...

Harvard training planes were made from the 1930s to 1970s. FT 7 June 2021 https://www.ft.com/content/069c9738-d351-46cf-8641-d7be0d9a4b63 Biggles should certainly have a Home Page https://internetional.se/Biggles.html

In October 2017, the Fed took the extra step of quantitative tightening. The Fed was no longer adding assets to its balance sheet every month, and it then decided to reduce the assets it held every month. Beginning in September 2019, the Fed reversed course again and began adding assets to its balance sheet.  Mixed feelings about quantitative tightening among investors could have added to stock market turbulence in 2018 (though many factors contributed to the turbulence). https://www.thebalance.com/fed-tapering-impact-on-markets-416859 Dow Taper Tantrum https://www.investopedia.com/terms/t/taper-tantrum.asp

While rich countries have been able to borrow during the pandemic at very low rates, many developing countries already face a much higher cost of finance. Egypt is paying  12.1 per cent. Ghana is paying 15 per cent. Brazil has refinanced at an average rate of 4.7 per cent this year FT 5 June 2021 https://www.ft.com/content/1db3d119-ac9f-4948-b43b-29bb136eb2d5 Once, central bankers knew what they needed to do to handle inflation https://englundmacro.blogspot.com/2021/06/once-central-bankers-knew-what-they.html Latin American debt crisis 80´s https://www.internetional.se/ldc.html

  Jag bor på Södermalm. I denna stadsdel i Stockholm lever människor gott. Folk är välutbildade, arbetslösheten är låg, inkomsterna är goda och tryggheten är stor. Och den mellanmänskliga tilliten är skyhög.   Men Södermalm framstår dock också som extremt i detta och andra avseenden. Lite skyddad verkstad – eller kanske snarare ett grindsamhälle som den svenska översättningen av gated community lyder. Jag sätter mig sålunda på min cykel och trampar 13 km söderöver. Efter cirka 45 minuter anländer jag till Rågsved. Lars Trägårdh Fokus 3 juni 2021 https://www.fokus.se/2021/06/sverige-ett-splittrat-land/

  https://internetional.se/2021.html

The yuan this week hit a three-year high versus the dollar, prompting Beijing to act to manage the exchange rate before China’s currency strengthens further. Chinese depositors now hold more than $1 trillion in dollars, often the proceeds from booming exports, and authorities seem to worry a sudden mass move to convert those deposits into yuan could send the exchange rate skyrocketing. Yet this is more a dollar phenomenon rather than a yuan event. The yuan is appreciating versus the dollar, while its exchange rate with the euro has been mostly stable in recent months.   WSJ 3 June 2021 https://www.wsj.com/articles/powells-dollar-chinas-problem-11622759455 John Connally, when Treasury secretary in President Richard Nixon’s cabinet, famously told his European counterparts in 1971 that the dollar “is our currency but your problem” https://englundmacro.blogspot.com/2018/01/trichet-it-is-extremely-important-that.html Min enkla, men kanske viktiga, tanke är att det rätta måttet är vad pr...

the contrast suggested by this statement is altogether false:  it is not the source but the limitation of power which prevents it from becoming arbitrary.  Frances 'Cassandra' Coppola 2 February 2021 https://www.coppolacomment.com/2021/02/democracy-wont-save-you.html

The need to pay back the debt later is often overlooked. Europe’s social peace requires a return to fiscal discipline Wolfgang Schäuble FT 2 June 2021 The writer is president of the Bundestag and a former German finance minister https://www.ft.com/content/640d084b-7b13-4555-ba00-734f6daed078

  Kan det ha något att göra med reporäntan? But, as John Maynard Keynes observed,  the problem with markets is that they can remain “irrational” longer than investors can stay solvent 

3.723 miljarder kronor. Så mycket hade svenska hushåll lånat till bostäder per den sista mars i år.  Om räntan skulle stiga till 2006 års nivå stiger månadskostnaden, återigen exklusive amorteringar, för ett lån på fem miljoner från cirka 6 500 kronor under 2020 till över 40 000 kronor.  Den franska banken Natixis summerar det ganska bra i en färsk analys:  ”En varaktig återkomst för inflationen skulle utlösa en skuldkris, en bankkris, en fastighetsskris, enorma förmögenhetsförluster och minskade investeringar hos företag som vill minska skuldsättningen”.  Andreas Cervenka DI 2 juni 2022 https://www.di.se/analys/se-upp-for-vanforestallningen-sa-hart-slar-en-rantechock/ När bubblan spricker finns ingen räddning Andreas Cervenka DI 29 september 2020 https://englundmacro.blogspot.com/2020/09/nar-bubblan-spricker-finns-ingen.html

Central bankers no longer agree how to handle inflation. After years of setting interest rates on the basis of inflation forecasts and seeking to hit a target of about 2 per cent, the leading monetary authorities around the world are pursuing different strategies. Eurozone policymakers are embroiled in a furious argument as the ECB conducts its own policy review; the results will be announced in September. “I am not worried about a return to the 1970s,”Fed vice-chair Randal Quarles said. FT 2 June 2021 https://www.ft.com/content/1c50f428-e235-4286-8ee7-20430e430d8b Riktiga karlar är inte rädda för lite inflation, 2010 https://englundmacro.blogspot.com/2010/02/riktiga-karlar-ar-inte-radda-for-lite.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, 2009 https://englundmacro.blogspot.com/2014/08/skriande-uppenbart.html

because the phenomena Keynes described couldn’t happen in an economy of perfectly rational individuals and perfectly functioning markets. Then came the 2008 crisis and its aftermath, which demonstrated that Keynes had been right all along.  The slump reflected a collapse in demand; governments that responded with deficit spending were able to mitigate the downturn, while those that practiced fiscal austerity made it worse. And the anti-Keynesian theories that had dominated the journals for several decades proved perfectly useless. Many economists entered the crisis ignorant of basic concepts that had been worked out many decades earlier, because you couldn’t publish those concepts in the journals or teach them in many (not all) graduate programs. Paul Krugman NYT 1 June 2021 https://messaging-custom-newsletters.nytimes.com/template/oakv2?uri=nyt://newsletter/41b9ba2a-b998-5d36-9aa2-a79dbdcec326&productCode=PK&te=1&nl=paul-krugman&emc=edit_pk_20210601 Keynes lived an...

Turning points in price trends tend to occur just at the moment when the authorities and expert opinion dismiss the risks.  FT 1 June 2021 https://www.ft.com/content/fe726054-5cc7-4285-9712-e92a21ed6079 Cash has been trash for years but soon it may be the only haven for investors Ten-year Treasuries morphed into the “risk” asset category several years ago. Stocks with valuations supported by low yields have entered the same category now, no matter the growth potential for 2021 and 2022. Bill Gross FT 1 June 2021 https://www.ft.com/content/f61e5657-c801-4f4d-9f8f-1611b299894d Bill Gross But, as John Maynard Keynes observed, the problem with markets is that they can remain “irrational” longer than investors can stay solvent  https://englundmacro.blogspot.com/search?q=Bill+Gross&max-results=20&by-date=true