S&P CoreLogic Case-Shiller Home Price Index showed that home prices increased 18.6% from a year ago in June
Aug. 31, 2021
https://fred.stlouisfed.org/series/CSUSHPINSA#
https://calculatedrisk.substack.com/p/house-prices-increase-sharply-in
2021-08-31
Powell is presenting the decisions on tapering asset purchases and raising interest rates as entirely separate
Tapering merely required “substantial further progress” compared to the dire situation at the end of last year, and we’re pretty much there.
Raising interest rates will require “maximum” employment, and under the new regime heralded a year ago in Wyoming, even price gains above target won’t change that; average inflation targeting, or AIT,
means that the index can be allowed to run above the official goal of 2% for a while before borrowing costs start to go up.
John Authers Bloomberg 31 August 2021
Chair Jerome H. Powell Jackson Hole
2021-08-30
Don Kohn, the Fed’s former vice chair for financial supervision, warns of ‘urgent’ threat of another financial crisis
Don Kohn calls on Congress to pass financial stability mandates for regulators arguing that the central bank must prepare now for a potential bubble bursting through prudential regulation.
One strategy for insulating the U.S. economy from the bursting of an asset bubble would be to require major banks to fund themselves with less debt and more equity, in the form of retained earnings or money raised from stockholders.
In a a speech to the Federal Reserve Bank of Kansas City’s annual Jackson Hole Economic Policy Symposium, https://www.brookings.edu/wp-content/uploads/2021/08/Don-Kohn_Jackson-Hole-2021.pdf
Kohn urged the Fed to increase the counter-cyclical capital buffer, something that Randal Quarles, the current Fed vice chairman for financial supervision, has resisted doing
MarketWatch Aug. 30, 2021
You Are Living in the Golden Age of Stupidity
The convergence of many seemingly unrelated elements has produced an explosion of brainlessness
Lance Morrow WSJ Aug. 29, 2021
All great things are simple, and many can be expressed in single words:
freedom, justice, honor, duty, mercy, hope. Winston Churchill
"All that is necessary for the triumph of evil is that good men do nothing"
https://www.internetional.se/hsr.htm
Why inflation isn’t higher even though money is flooding the economy
The belief that increasing money supply leads to inflation does have a distinguished theoretical foundation
I rely heavily on a recent research report by two members of the Asset Allocation team at Boston-based GMO (James Montier and Philip Pilkington).
https://www.gmo.com/europe/research-library/part-1-inflation--tall-tales-and-true-causes/
As Montier and Pilkington point out, this equation in itself is largely unobjectionable, since it simply holds that “expenditure equals income, which is nothing more than an identity.”
Yet to translate the formula into a forecast about inflation, they note, “one has to make some rather unrealistic assumptions, such as velocity being fixed and output being fixed.
There is no agreement on what even counts as money in the first place.
Take what happens when the Federal Reserve purchases bonds as part of its Quantitative Easing program. As Montier and Pilkington explain: “Essentially, the Fed buys fixed income assets (like government bonds) from the private sector and issues cash/reserves in their place. The former aren’t defined as part of the money supply, whereas the latter are. Hence QE leads to increases in the money supply.”
Does QE therefore really represent an increase in the money supply? It could also be viewed as a “maturity transformation,” in which longer-term debt is swapped for shorter-term debt.
Mark Hulbert MarketWatch1 Aug. 28, 2021
2021-08-29
The outgoing German chancellor is overrated at home and abroad
Many Germans sympathized with (even if they didn’t quite follow) Sinn’s argument that the way the ECB supported the peripheral economies through its TARGET2 settlement system amounted to a covert “transfer union.” What the Southern Europeans needed to do was what Germany had done after 2003: to reduce their price and wage levels, and thereby regain domestic competitiveness. This was a constant refrain in the German press.
Like many others, I said at the time that such arguments made little sense.
Even in the midst of the pandemic, it took the French president, Emmanuel Macron, to force through the long-overdue fiscal integration that had always been implicit in the project of a single European currency.
Niall Ferguson Bloomberg 29 augusti 2021
Germany, it says, will never accept a “transfer union”. Target 2
https://englundmacro.blogspot.com/2019/09/germany-it-says-will-never-accept.html
Target2 credits have reached €920bn - and Italy
https://englundmacro.blogspot.com/2019/06/target2-credits-have-reached-920bn-and.html
Hushållens skulder ökade med 94 miljarder under andra kvartalet
Den största skuldökningen på ett kvartal någonsin.
Endast 11 miljarder netto gick in i nyproducerade lägenheter, så resten av skulderna gick icke-produktivt till att tävla om vem som kan skuldsätta sig mest för en bostad som redan existerade.
Ökningstakten på skulderna steg med 44% jämfört med första kvartalet och 20% mer än tidigare rekordet från det fjärde kvartalet 2016.
Cornucopia 28 augusti 2021
https://cornucopia.cornubot.se/2021/08/hushallens-skulder-okade-med-94.html
Only in art and lore was Rome suddenly sacked by barbarians who appeared out of nowhere
The failure to control migration has brought down empires before. Only in art and lore was Rome suddenly sacked by barbarians who appeared out of nowhere.
In reality, climate change and turmoil in central Asia — sound familiar? — caused wave after wave of mass migration, of Vandals, Visigoths, Ostrogoths, Alans and others.
These were people who wanted to settle peacefully inside the Empire. Unable either to keep them out or to integrate them, the Western Roman Empire as an entity gradually atrophied and eventually collapsed.
The EU needn’t end the same way. But it could.
https://www.bloomberg.com/opinion/articles/2021-08-28/mass-migrations-could-yet-bring-europe-down
Decline and Fall of the Roman Empire 2.0
https://englundmacro.blogspot.com/2019/12/decline-and-fall-of-roman-empire-20.html
2021-08-28
Skulderna har ökat markant under krisen, vilket gör det svårt för centralbankerna att trappa ned sina stödköp
– för att inte tala om att höja styrräntorna.
Sammantaget ökade skulderna till 355 procent av världens BNP.
Inte konstigt att finansmarknaden är orolig för vad som händer om centralbankerna börjar att trappa ned stödet, och räntorna därmed stiger.
En lösning är att politikerna axlar mer av ansvaret för att stimulera ekonomin genom att låna ännu mer pengar. Men då fortsätter staternas skulder att öka, vilket gör dem ännu mer sårbara för om räntorna stiger någon gång i framtiden.
Johan Carlström SvD 2021-08-27
https://www.svd.se/centralbankerna-har-gillrat-sin-egen-falla
För varje dag som går med nollränta växer problemen
Hushåll, företag och stater ökar sin skuldsättning. Allt fler köper bostäder och aktier till stigande kurser. Allt sämre företag kan sälja sina skräpobligationer, junk bonds.
Alla är glada. Utom riksbankscheferna som vet att de inte har någon plan för återgång till något slags normalitet.
Hur skall detta sluta? Det är väl skriande uppenbart. Det kommer att sluta illa den dag räntorna stiger.
https://englundmacro.blogspot.com/2021/03/for-varje-dag-som-gar-med-nollranta.html
A Skeptic’s Guide to Modern Monetary Theory
N. Gregory Mankiw
Harvard University December 12, 2019
https://scholar.harvard.edu/files/mankiw/files/skeptics_guide_to_modern_monetary_theory.pdf
2021-08-27
40 Million People Rely on the Colorado River. It’s Drying Up Fast
Lake Mead, a reservoir formed by the construction of the Hoover Dam in the 1930s, is one of the most important pieces of infrastructure on the Colorado River, supplying fresh water to Nevada, California, Arizona and Mexico.
The reservoir hasn’t been full since 1983. In 2000, it began a steady decline caused by epochal drought.
https://www.nytimes.com/2021/08/27/sunday-review/colorado-river-drying-up.html
The Colorado River provides drinking water for 1 in 10 Americans
Bloomberg 2019-08-15
https://englundmacro.blogspot.com/2019/08/the-colorado-river-provides-drinking.html
Decline of one of California's most important water sources
BBC 17 August 2021
https://englundmacro.blogspot.com/2021/08/eecline-one-of-californias-most.html
Nu har världens nationalekonomer gjort helt om. I samband med coronakrisen skulle det plötsligt vräkas ut offentliga pengar
Att spara sig ur kriser har i decennier varit det enda påbudet från såväl ansvarstagande finansministrar som världens tyngsta organisationer och experter, däribland OECD och Internationella Valutafonden, IMF.
Nu har världens nationalekonomer gjort helt om. I samband med coronakrisen skulle det plötsligt vräkas ut offentliga pengar.
Man hänvisar till bakslagen efter finanskrisen 2008-2009 då stöden drogs tillbaka för fort. Men egentligen handlar det nog mest om att det den här gången pumpats ut så många tusentals miljarder i stödpengar att man helt enkelt är livrädd för megakrasch när de dras tillbaka.
Kristina Lagerström SvT 27 augusti 2021
https://www.svt.se/nyheter/inrikes/det-svaraste-problemet-i-ekonomin-kan-anda-forbli-olost
Chair Jerome H. Powell Jackson Hole
The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent test.
We have said that we will continue to hold the target range for the federal funds rate at its current level until the economy reaches conditions consistent with maximum employment, and inflation has reached 2 percent and is on track to moderately exceed 2 percent for some time.
August 27, 2021
https://www.federalreserve.gov/newsevents/speech/powell20210827a.htm
The big fear: The Fed will be slow to rein in inflation, paving the way for a sustained take-off in prices, along with a housing bubble that policy makers will eventually have to deal with by jacking up interest rates and derailing the recovery.
No longer will the Fed raise interest rates to head off higher inflation as the job market tightens. Instead, it will allow unemployment to fall as far as possible, and only seek to slow things down when it’s clear that faster inflation is becoming a problem.
In a nod to racial and other inequities plaguing the economy, the Fed also explicitly expanded its definition of what constitutes maximum employment, saying job gains should be broad-based and inclusive.
Summers Says Powell Arguments Misread Inflation Risk
With businesses rethinking their models and people rethinking their lives in light of the pandemic, there’s structural change under way, Summers said. It could mean that the U.S. can’t go back to the pre-Covid era of sub-4% unemployment and a tame rate of inflation
He also highlighted that Powell in his remarks didn’t mention housing costs, which have been rising rapidly.
Bloomberg 27 August 2021
The Fed chairman says everything the White House wants to hear
The message is that the Fed will remain super-accommodative, even as nominal GDP could grow 10% this year. Investors, who love the Fed’s support for asset prices, bid up stocks on the news. This won’t hurt Mr. Powell’s renomination chances at the White House.
Mr. Powell justified the Fed’s continued and historic policy ease on grounds that while the outlook for the job market is excellent, the labor market recovery has been uneven. But then it always is after a recession.
WSJ Editorial Aug. 29, 2021
The more worried we are about inflation—or worse, stagflation—the more we should expect...
stocks and bond yields to move in opposite directions.
The U.S. inflation rate reached a 13-year high recently, triggering a debate about whether the country is entering an inflationary period similar to the 1970s.
What the Inflation of the 1970s Can Teach Us Today
Investor sentiment right now doesn’t indicate a frothy market
Froth refers to market conditions preceding an actual market bubble, where asset prices become detached from their underlying intrinsic values as demand for those assets drives their prices to unsustainable levels.
2021-08-24
Eventuella nedgångar ska ses som långsiktiga köplägen...
eftersom tillväxten fortsätter och nollräntan består. Redan i oktober lär vi få nya toppenrapporter från börsbolagen.
Henrik Mitelman DI 23 augusti 2021
https://www.di.se/analys/tre-oroshardar-saboterar-festen-dags-for-borspaus/
”Kombinationen av den här enorma likviditeten och att långräntorna har fallit tillbaka har gett ett fantastiskt stöd för börsen. Det är upplagt för en stökigare börs, men blir det en korrektion blir den sannolikt hastig och innebär snarare ett köpläge”, säger Erik Lundkvist.
Även ett större börsras innebär köpläge, enligt kapitalförvaltningschefen.
”Skulle korrektionen bli djup leder det till att centralbankerna backar och så får börsen fart igen”, säger Coelis kapitalförvaltningschef Erik Lundkvist.
DI 24 augusti 2021
2021-08-23
The IPCC concludes that this is still possible, but only if we act decisively and immediately...
to reduce greenhouse-gas emissions (particularly carbon dioxide) substantially.
Unfortunately, there are few signs that this is happening.
The more obvious that the climate crisis becomes in people’s daily lives, the clearer it will be that we are running out of time.
The issue increasingly will drive international politics, forcing a realignment away from traditional geopolitics and toward a new dispensation of joint planetary responsibility. After all, no state – no matter how powerful – can solve this problem alone. The task requires the solidarity and cooperation of all humankind.
Unfortunately, the history of our species shows that genuinely inclusive global cooperation is not one of our strong suits.
Joschka Fischer Project Syndicate 20 August 2021
Joschka Fischer; “systemic” rivalries and great-power politics have no place in an age of climate change
https://englundmacro.blogspot.com/2021/06/joschka-fischer-systemic-rivalries-and.html
2021-08-17
2021-08-16
Larry Kudlow: Reagan's tax cuts launched a 3 decade-long prosperity cycle
Reagan dropped the income tax rate from 70% to 28%. He also was a minimal regulator—including the de-control of oil prices—which led to a huge drop—so did gold, silver and inflation.
Laffer Curve (AKA: Lower tax rates generated higher tax revenues through faster economic growth and less tax avoidance).
Working with Fed Chair Paul Volcker, their combined economic policy was basically low taxes and a steady, strong, reliable king dollar.
The stock market stood at roughly 1,000 and it rose 12-fold under Reagan
Larry Kudlow Fox 12 August 2021
Larry Kudlow, Krugman about
A remarkable feature of extended bull markets is that investors come to believe – even in the face of extreme valuations ...
– that the world has changed in ways that make steep market losses and extended periods of poor returns impossible.
Though market valuations in 1959 were nowhere close to current extremes, it’s notable that measured from the date of Graham’s remarks, periodic bear markets repeatedly brought the cumulative total return of the S&P 500 back to or below the cumulative return of risk-free Treasury bills, all the way out to August 1982
John P. Hussman, Ph.D. August 2021
https://www.hussmanfunds.com/comment/mc210808/
Börsuppgången startade i USA den 12 augusti 1982
https://englundmacro.blogspot.com/2011/09/borsuppgangen-startade-i-usa-den-12.html
Kabul, Saigon och Löntagarfonder
Den 30 april 1975 intog Nordvietnamesiska trupper med ryskbyggda stridsvagnar presidentpalatset i Saigon.
Den 27 augusti 1975 slog nyheten ned som en bomb i den svenska debatten"
"Revolution i Sverige" stod det på DN:s löpsedlar. Boken "Löntagarfonder" hade kommit ut.
Bild från BBC
Då kändes det lite motigt.
2021-08-09
IPCC-rapporten är skakande läsning. Men ännu mer skakande är regeringars brist...
på konkreta tidsplaner för att nolla utsläppen till 2050.
Ända sen 1988 har forskarnas varningar varit kristallklara. För varje år har prognoserna blivit mer säkra. Och politikerna har visserligen kommit med utsläppsmål långt fram i tiden samtidigt som utsläppen stadigt ökar.
Det är en sak att besluta att utsläppen ska nollas till 2050. Men hur ser tidsplanen ut på vägen dit? Hur ska utsläppen kunna komma ner med 5-6 procent v a r j e år när det inte ens är politiskt möjligt att höja bensinpriset?
Erika Bjerström SvT 9 augusti 2021
Without “immediate, rapid and large-scale reductions” in emissions, curbing global warming to either 1.5C or even 2C above pre-industrial levels by 2100 would be “beyond reach”
Financial Times 9 August 2021
https://www.ft.com/content/9a11b08c-4fb3-49ec-8939-9d853745bfce
Most people cannot comprehend the prospect of catastrophic changes in their situation
De 1700-talsidéer som attraherade människor till det demokratiska arbetet känns hopplöst daterade inför globala pandemier, internationell finansmarknad och miljöproblem långt bortom lagar mot plastsugrör.
Att den politiska klassen står handfallen och förvirrad är inte konstigt. Karriärism och intern prestige är två av få kvarvarande ideal.
Anna Björklund Fokus 19 juli 2021
When Jet and Gulf Streams Run Amok, We’re In For It
Rising temperatures are already causing floods, heat waves and forest fires. Just wait until global warming disrupts the currents that move air and water around the planet.
Andreas Kluth Bloomberg 10 August 2021
Rika demokratier med fria ekonomier förnyar produktionen och minskar utsläppen, och ger människor bäst förutsättningar att leva väl också i en varmare värld.
Mattias Svensson SvD 9 augusti 2021
It’s often said the 2008 Lehman collapse and its aftermath typified the drawbacks of capitalism. I don’t buy that for one moment.
The financial crisis happened because “independent” central banks, egged on by myopic politicians, pumped up equity and debt markets with cheap money.
That caused inevitable problems because bank regulations, built over generations and designed to keep financial markets relatively orderly and mass speculation in check, had been severely diluted.
And that dilution had itself happened due to a slew of campaign donations and other inducements channelled from the financial classes to ruling parties and politicians on both sides of the Atlantic.
Interest rates were set to juice up asset prices. Then when the bubble burst, those who caused the mess and become extremely rich in the process, were shielded from the economic wreckage bestowed on the rest of us, as banks’ vast losses were shoved on to taxpayers.
Too-big-to-fail banks that “lever up” taxpayer-backed deposits to place one-way bets are anathema to free markets. The extortion of government bail-outs by a financial elite that knowingly drives the Western banking system to the point of implosion, risking untold economic damage and serious civil unrest, is anathema to free markets.
Liam Halligan Telegraph 8 August 2021
https://www.telegraph.co.uk/business/2021/08/08/just-like-did-2008-crash-capitalism-needs-reboot/
Vem skall man tro på om Lehman Brothers?
Englund blogg 2009-11-19
https://englundmacro.blogspot.com/2009/11/vem-skall-man-tro-pa-om-lehman-brothers.html
Lehman Brothers at IntCom
https://internetional.se/lehman911.htm
Den troligaste förklaringen till sommarens extremväder är att jetströmmen...
som cirklar runt Arktis har rubbats av den snabba uppvärmningen.
Väderlägen riskerar att låsa fast och ge extrem nederbörd, eller värmeböljor.
Erika Bjerström SvT 9 augusti 2021
2021-08-08
Most people cannot comprehend the prospect of catastrophic changes in their situation
In his elegiac memoir The World of Yesterday, which he wrote while in exile from the Nazis, the Austrian writer Stefan Zweig observed that most people cannot comprehend the prospect of catastrophic changes in their situation.
Things can get incrementally worse for a long time without prompting a reaction. Once catastrophe strikes, it is too late to act.
Climate change-induced weather events are one obvious type of catastrophe. These could render uninhabitable large, densely populated parts of the planet, and it might already be impossible to avert large-scale population movements stemming from them.
Climate scientists need to integrate their work with that of political scientists, and epidemiologists should do the same with economists. Analyzing the risks of catastrophe creates the obligation to act now.
Diane Coyle Project Syndicate Aug 5, 2021
Diane Coyle, Professor of Public Policy at the University of Cambridge, is the author, most recently, of Markets, State, and People: Economics for Public Policy.
Doom: The Politics of Catastrophe Niall Ferguson
https://www.bokus.com/bok/9780593297377/doom/
Why do the frogs of Wall Street stay in the boiling pot? Stockman.
Och Englund om de borgerliga grodorna som inte är lustiga att se.
FT Series Global house prices
House prices are rising across many major economies around the world, in the broadest boom for over two decades - but is it sustainable?
https://www.ft.com/house-prices
Because house prices are not directly included in the headline inflation measures that shape central banks’ mandate in advanced economies, those institutions are not required to seek to quell prices when they rise.
https://www.ft.com/content/b5ad3c30-6b51-45f6-a87e-2a1a464d2945
2021-08-07
Inställningen till statliga skulder och underskott har ändrats markant det senaste decenniet...
med intellektuell ammunition från institutioner som IMF och OECD.
USA är det land som gått längst, men debatten pågår i hela västvärlden. Utom i Sverige.
Här handlar det i stället om vikten av att återgå till ”ordning och reda” i de offentliga finanserna, värna det finanspolitiska ramverket
Ladusparandets baksida Viktor Munkhammar DI 4 augusti 2021
I den internationella debatten behandlas MMT som ett seriöst förslag. Så icke i Sverige.
I Sverige tror många fortfarande att man sparar i ladorna när ekonomin går på lägre varv än nödvändigt eftersom det ger lägre statsskuld.
Sparat i ladorna? Hm. Var exakt står dessa lador? Och vad innehåller dom? Jo, jag förstår att det är bildlikt menat. Men det är ändå vilseledande och fel.
Produktionen kan användas för konsumtion eller investeringar. Vi sparar för framtiden genom att investera. Något annat sätt finns inte.
Guldet, euron och budgetunderskottet
Englund blogg 16 oktober 2020
Arctic Apocalypse
The Arctic is nearing the tipping point.
The world's leading polar scientist, Dr. Peter Wadhams, is headed to Greenland to study actual conditions there. He expects the blue ocean event, when the summer ice melts completely, to occur much sooner than anticipated, probably in the next year or two.
The blue water will absorb more of the sun's heat, further warming our planet, and the Jet Stream, which balances weather in the northern hemisphere, will be disrupted.
https://www.youtube.com/watch?v=1PJon1u3U5M
Väderkartan är konstig (inte som den var förr)
Rolf Englund blogg 12 maj 2010
https://englundmacro.blogspot.com/2010/05/vaderkartan-ar-konstig-inte-som-den-var.html
2021-08-06
Sub-Saharan Africa’s working-age population set to double
The working-age population of sub-Saharan Africa is set to increase more than twofold by 2050 to become the largest in the world, offering unprecedented opportunity for economic growth, according to S&P Global Ratings.
“If jobs are not created in tandem, the demographic dividend could become a source of instability, since the relative share of young unemployed people would increase ,” the report said.
2021-08-05
FT was among those calling for austerity in the aftermath of the financial crisis of 2008-2009
That austerity has contributed to the rise of right-wing populism in many European countries.
Khalaf: Yes, I think we went too far back then, that was a mistake. The editorial position of the FT was supportive of the austerity policies of the British government of David Cameron and George Osborne.
Der Spiegel Interview with Financial Times Editor Roula Khalaf
U.S. trade deficit jumps 6.7% to record high
The trade gap widened to $75.7 billion
Imports rose 2.1% to $283.4 billion
Exports edged up 0.6% to $207.7 billion
MarketWatch 5 August 2021
https://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf
----
We’d buy cheap goods made in other countries, and they’d buy our expensive services, and it would all balance out. That was the rationale.
Few economic rationales have failed more spectacularly.
Wolf Richter 4 May 2021
https://englundmacro.blogspot.com/2021/05/services-trade-surplus-american-dream.html
Something in all this does not add up
The yield on ten-year Treasury bonds is 1.24%, well below the ten-year breakeven inflation rate of 2.4%.
At the same time, stock markets are flirting with all-time highs.
Something in all this does not add up
Inflation should remain around the Fed’s target. The breakeven inflation rate also seems to be pointing to this scenario.
But that doesn’t explain why the ten-year Treasury rate is so low, suggesting negative real rates over the next decade. In this scenario, however, it would be hard to justify the stock-market buoyancy
Raghuram G. Rajan Project Syndicate 2 August 2021
Raghuram G. Rajan, former governor of the Reserve Bank of India, is Professor of Finance at the University of Chicago Booth School of Business and the author, most recently, of The Third Pillar: How Markets and the State Leave the Community Behind.
Rajan:The Third Pillar: How Markets and the State Leave the Community Behind
https://englundmacro.blogspot.com/2021/02/rajanthe-third-pillar-how-markets-and.html
Alla är nu börsexperter, särskilt i Sverige med femton positiva börsmånader av de sexton senaste
Vad kan gå fel liksom?
https://cornucopia.cornubot.se/2021/08/diskutera-spekulationsbubblan-i-sma.html
Warren Buffett once told me
The macro future may not be knowable, but it certainly is important.
https://www.ft.com/content/3e45991a-ce3a-4cda-b439-1c18f74ad0c5
- Economics may be dismal, but it is not a science, John Kay
Global stock of negative-yielding debt above $16tn
US Germany Japan
France’s debt trading at sub-zero yields up to maturities of 12 years
Negative yields mean investors are willing to pay for the opportunity to lend their funds.
Those who hold this debt to maturity are guaranteed to make a loss.
FT 5 August 2021
https://www.ft.com/content/43280fe3-b6cd-44e1-bb75-25b0962b5ba1
Marknadsräntorna har fallit.
Någon entydig förklaring har inte experterna
Jag skulle inte kalla det marknadsräntor. Centralbankerna, dagens Gosplan, stödköper och har därmed satt marknadens informationssignaler ur funktion.
Inte bra. Men att dom gör det beror inte på att de är idioter, vilket de inte är, utan på att de fruktar vad som skulle hända om de inte stödköpte. Det är det som är oroande.
Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
Detta kan inte vara klokt.
Rolf Englund blog 5 december 2009
2021-08-04
The truth is that we know very little about inflation, including its causes and cures.
For years, central bankers in the US, Europe and Japan have targeted a healthy 2 per cent rate of inflation, but none has been able to produce it.
This despite continuous economic growth, significant budget deficits, rapid expansion of the money supply through quantitative easing and low interest rates — all of which are supposed to be inflationary.
A memo I wrote in 2001: “You Can’t Predict. You Can Prepare.”
Howard Marks FT 4 August 2021
https://www.ft.com/content/3e45991a-ce3a-4cda-b439-1c18f74ad0c5
The Law of Supply and Demand
https://www.internetional.se/supplyanddemand.htm
Nonsens.
If the economy takes off above Stall Speed the Philips Curve will be back.
https://englundmacro.blogspot.com/2017/08/discussions-around-death-of-phillips.html
Marknadsräntorna har fallit. Någon entydig förklaring har inte experterna
– En tumregel brukar vara att realräntan normalt sett ska motsvara ungefär de reala tillväxtförväntningarna i ekonomin. Så vad nedgången i realräntan pekar på är att marknaden har en väldigt dyster bild av hur tillväxten kommer se ut under de kommande tio åren, säger Pär Magnusson.
– Det var många som låg i positioner för stigande räntor och så ligger man helt enkelt väldigt fel och måste stänga sina positioner, säger Robert Bergqvist.
– Räntenedgången är framförallt en effekt av att Federal Reserve fortsätter att köpa statsobligationer för massiva belopp, säger Claes Måhlén.
Pär Magnusson tror att det är i den amerikanska centralbankens intresse att försöka hålla räntorna låga länge.
Johan Carlström SvD 4 juli 2021
https://www.svd.se/mysteriet-pa-marknaden-darfor-faller-rantorna
Varför är tioårsräntan så låg?
Dynamiken är uppseendväckande men inte isolerad till USA. Den som vill låna ut pengar till Tyskland får nu räkna med negativ avkastning redan nominellt även för obligationer med lång löptid, exempelvis 30 år.
https://englundmacro.blogspot.com/2021/08/varfor-ar-tioarsrantan-sa-lag.html
Flying blind
Lorenzo Bini Smaghi, the former member of the ECB’s executive board:
“We don’t fully understand what is happening in advanced economies.”
2021-08-03
Americans increased their mortgage borrowings...
adding fuel to a housing boom that has seen US prices surge at a record pace.
That helped to push mortgage balances to more than $10tn — meaning about 44 per cent of the outstanding mortgage balance was originated in the past year.
FT 3 July 2021
https://www.ft.com/content/2d914791-b8c2-4083-913d-11764b9c5e18
‘It has never been like this’: US house price spiral worries policymakers
FT 4 August 2021
https://www.ft.com/content/36cdd5d2-18af-4745-88e8-b101fd4cab3f
Biden is continuing Trump’s break with the neoliberal, trickle-down economics of Clinton, Bush and Obama
United States has moved into a de facto, if not de jure, state of permanent debt monetization—a policy that began under Trump and Fed Chair Jerome Powell.
If policies to reduce inequality lead to unsustainable increases in private and public debts, the stage could be set for the kind of stagflationary debt crisis I warned about earlier this summer.
Nouriel Roubini MarketWatch 3 August 2021
After ‘the Minsky Moment’ crashes overheated speculative markets, ‘the Volcker Moment’ will arrive to crash the debt-burdened global economy
Nouriel Roubini MarketWatch 30 June 2021 2021
At some point, this boom will culminate in a Minsky moment (a sudden loss of confidence), and tighter monetary policies will trigger a bust and crash.
Roubini: The Looming Stagflationary Debt Crisis
https://englundmacro.blogspot.com/2021/07/roubini-looming-stagflationary-debt.html
Let me explain now in more detail why we are now back to the risk of a total systemic financial meltdown
This is not just a US financial crisis; it is a global financial crisis hitting institutions in the US, UK, Eurozone and other advanced economies (Iceland, Australia, New Zealand, Canada etc.).
Nouriel Roubini Sep 29, 2008
Varför är tioårsräntan så låg?
Att låna ut pengar till världens mest respekterade nationalstater ser nu ut som en ovanligt dålig affär – frågan är bara varför?
Så sent som i mars toppade den amerikanska tioåringen på 1,77 procent... den handlats ned till under 1,2 procent
Dynamiken är uppseendväckande men inte isolerad till USA. Den som vill låna ut pengar till Tyskland får nu räkna med negativ avkastning redan nominellt även för obligationer med lång löptid, exempelvis 30 år.
Centralbankernas köp av statspapper och tekniska faktorer.
Gabriel Mellqvist DI 3 augusti 2021
https://www.di.se/analys/marknadens-krissignaler-bor-tas-med-en-nypa-salt/
Interest rates haven’t been this low in 5,000 years
https://englundmacro.blogspot.com/2021/07/interest-rates-havent-been-this-low-in.html
I would like to go back to a time when we didn’t wake up in the morning wondering what the Federal Reserve would do.
Its actions have distorted the economy, repressed savers, and made the wealth and income divide far greater than it should be.
John Mauldin 23 July 2021
https://englundmacro.blogspot.com/2021/07/it-is-my-opinion-john-mauldin-that-this.html
Artikelns fråga: Varför är mycket berättigad.
Och frågan kan förändras till Varför köper marknaden dessa papper?
Avkastningen är dålig och dessutom kommer obligationerna att sjunka när, inte om, räntorna vänder uppåt.
Varför köper de inte aktier i stället? Det har ju gått så bra.
Eller varför inte sätter dom inte pengarna på banken, bankerna är ju säkra. Visserligen är räntan noll, men pengarna är inte låsta i tio år.
Something must be terribly wrong.
The Economist has noticed that the ravages of climate change are coming to this generation, not the next one
But the real story of this excellent and informative piece isn’t about the climate and what it will do to us. It’s about what the reaction to the climate will do to us.
August 3, 2021 by Yves Smith
https://www.nakedcapitalism.com/2021/08/the-economist-notices-the-climate.html
By Thomas Neuburger. Originally published at God’s Spies
https://neuburger.substack.com/p/the-economist-notices-the-climate
The Economist - What’s the worst that could happen
Three degrees of global warming is quite plausible and truly disastrous
Rapid emission cuts can reduce the risks but not eliminate them
2021-08-02
Virtual History: Alternatives And Counterfactuals
What if there had been no American War of Independence? What if Hitler had invaded Britain? What if Kennedy had lived? What if Russia had won the Cold War?
Niall Ferguson, author of the highly acclaimed The Pity of War, leads the charge in this historically rigorous series of separate voyages into “imaginary time” and provides far-reaching answers to these intriguing questions.
Ferguson's brilliant 90-page introduction doubles as a manifesto on the methodology of counter-factual history. His equally masterful afterword traces the likely historical ripples that would have proceeded from the maintenance of Stuart rule in England.
This breathtaking narrative gives us a convincing, detailed “alternative history” of the West—from the accession of “James III” in 1701, to a Nazi-occupied England, to a U.S. Prime Minister Kennedy who lives to complete his term.
Virtual History: Alternatives And Counterfactuals by Niall Ferguson
https://englundmacro.blogspot.com/2020/09/virtual-history-alternatives-and.html
[Fed Chair Jerome] Powell is no idiot and he knows what a complete mess things are ...
so if I /reader “Sagelike”/ am Powell I'd have to ask myself how I need to play this?
I wouldn't want to be the guy who presides over an economic implosion so I'd just keep the game going to avoid being tarred with that label for all time and, I'd retire in January with reputation more or less intact and leave the mess to someone else…
Debt monetization is the last and only option left on the table at this point. Interest rates can't go low enough to spur growth as they are near zero anyways nor can they rise high enough to rebalance the system without leading to debt default and depression.
QE forever doesn't work so what's left?
John Mauldin 30 July 2021
https://www.mauldineconomics.com/frontlinethoughts/policy-errors-have-consequences
House prices are booming in almost every major economy...
the broadest rally for more than two decades and reviving economists’ concerns over potential threats to financial stability.
Claudio Borio, head of the monetary and economic department at the Bank for International Settlements
Is it a bubble?
FT 1 August 2021
https://www.ft.com/content/491a245d-4af7-4cad-b860-6ba51b86b45f
2021-08-01
We are approaching the 50th anniversary of the so-called Nixon Shock, one the most decisive ruptures in monetary history
On August 15, 1971, US President Richard Nixon announced in a televised address that he was “closing the gold window.”
By ending the dollar’s convertibility into gold (at an official rate of $35 per ounce), Nixon severed the millennia-long link between money and precious metals.
To some optimists in Washington, DC, the persistence of America’s centrality to global economic governance may seem inevitable: The US would still provide two goods that everyone needs: the English language as a common medium of expression, and the dollar as a common medium of exchange.
Enormous advances in automatic translation in recent years mean that people around the world can now rely on artificial intelligence, rather than English.
As the digital revolution accelerates, the national era in money is drawing to a close.
Harold James Projet Syndicate 30 July 2021
Harold James is Professor of History and International Affairs at Princeton University. A specialist on German economic history and on globalization, he is a co-author of The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, Making the European Monetary Union, and the forthcoming The War of Words.
The Euro and the Battle of Ideas
https://muse.jhu.edu/book/64555
Over a single weekend in August 1971, US President Richard Nixon and a crack team of advisers set in motion developments that would inaugurate a new world order.
Haldeman, had organized the meeting just one day before
Aside from the president, the most powerful man at Camp David was Secretary of the Treasury John Connally
In response to a simultaneous escalation of inflation and unemployment in the United States – America’s first experience with “stagflation” – Nixon announced that his administration would freeze all wages and prices.
Jeffrey E. Garten Project Syndicate Aug 13, 2021
Jeffrey E. Garten is the author of Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy, published last month by HarperCollins. He is Dean Emeritus of the Yale School of Management where he teaches courses on the global economy. He previously served in the Nixon, Ford, Carter, and Clinton administrations, and was a managing director of Lehman Brothers in the 1980s and the Blackstone Group in the 1990s.
För 50 år sedan, 1971, avskaffade president Nixon dollarns knytning till guldet (at a rate of $35 an ounce)
https://englundmacro.blogspot.com/2021/07/for-50-ar-sedan-1971-avskaffade.html
After a 13-year bull market, the clock is ticking for U.S. stocks
After hibernating for months, the stock-market bears came out of their caves on July 19.
Before the bears could say, “I told you so,” the next day, July 20, the 700-plus point Dow selloff was erased by a 550-point Dow rally.
While the bulls scored another victory this time, one day the market won’t reverse direction and will begin a steep correction, or worse yet, a bear market.
MarketWatch 31 July 2021
”The world in a selfie” massturismens drivkrafter och verkningar.
Mark Twain grundade inte sin förmögenhet på Tom Sawyer, utan på att skriva resehandböcker.
Marco D’Eramos ”The world in a selfie” (Verso)
https://www.svd.se/unescos-lista-over-kulturarv-skadar-miljon
Prenumerera på:
Inlägg (Atom)