Englund

Jag hade planer på att skriva en bok till. Jag visste vad den skulle heta och hur omslaget skulle se ut.   Past performance is not a guide to future performance.  The value of investments, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all. https://en.wikipedia.org/wiki/Caveat_empto r Det blev en artikel -  Guldet, euron och budgetunderskottet. Vad har jag uträttat? När jag läste i Lund var jag ordförande i det som då hette Konservativa Studentföreningen i Lund, numera Studentföreningen Ateneum  En website Rolf Englund Internetional Communications IntCom - on the web since 1995  Några böcker. Under sommaren 1966 hade jag ett tillfälligt uppdrag att för Timbros föregångare, Utredningsbyrån för Samhällsfrågor, göra en utredning om svenskt U-landsbistånd. Där skrev jag bl a att:  "U-ländernas växande skuldbörda inger allvarliga farhågor. Det antas ibland att finansiering på vanliga villkor och från pr

Index Dow Före Pandemin nästan 30.000 Botten 23.000 Nyligen 36.000 Nasdac  Före Pandemin 9.700 Botten 7.000 Nyligen 15.800 Stockholm  Före Pandemin 700   Botten 500 Nyligen 1.000 + One reason the first Covid crash was so brutal back in March 2020 was all the froth that built up in markets before the virus landed. While there are differences for traders navigating the latest scare, a lot is the same, too.  https://www.bloomberg.com/news/articles/2021-11-27/melt-up-markets-have-a-lot-to-unwind-should-covid-scare-stick

MarketWatch Nov. 26, 2021  https://www.marketwatch.com/story/dow-futures-tumble-400-points-on-fears-over-new-covid-variant-detected-in-south-africa-11637908694 A heavily-mutated Covid variant emerges in southern Africa:  Here’s what we know so far https://www.cnbc.com/2021/11/26/covid-variant-emerges-in-south-africa-heres-what-we-know-so-far.html

Enjoy it while it lasts, for one thing that can be said for sure is that something will eventually come along that will rock the complacency of investors to the core, even if it’s impossible to say what it might be until it actually happens. Jeremy Warner Telegraph 24 November 2021 https://www.telegraph.co.uk/business/2021/11/24/geopolitics-will-bring-long-bull-market-close-not-interest-rates/ Politicians and central bankers are colluding to turn a blind eye to the surge in inflation, opting to pump-prime the economy with cheap money to eke out growth, keep tax and spending flowing and grow asset values to dupe the majority into thinking they are becoming wealthier.  Easy money has already convinced politicians that they no longer have a budget constraint and it is safe to turn on the spending taps. https://www.telegraph.co.uk/news/2021/11/17/catastrophic-elite-failure-destroying-economic-foundations-west/

It remains very doubtful whether our divided world can muster the will to tackle this challenge in the time left before the damage becomes unmanageable. Climate Action Tracker has provided a helpful summary of where we are https://climateactiontracker.org/publications/glasgows-2030-credibility-gap-net-zeros-lip-service-to-climate-action/ Full implementation of all submitted and binding targets would deliver 2.1C GFANZ consists of the world’s leading asset managers and banks, with total assets under management of $130tn. https://www.gfanzero.com/progress-report/ It is too soon to abandon hope. But to be complacent would be absurd. We need to act powerfully, credibly and quickly Martin Wolf 23 November 2021 https://www.ft.com/content/6e2b366f-e139-4d69-bd4f-9254333bf316

På partistämman deklarerade Maud Olofsson från talarstolen att partiet bytt sin sedan 30 år drivna uppfattning.  Hon klämde fram en tår i ögonvrån och sade att det hade hon gjort för barnens skull, varpå stämmodeltagarna reste sig applåderade. Mats Qviberg har väl haft mycket att tänka på under finanskrisen och kan ha missat att vad som meddelades i Ekot måndagen den 5 februari 2007: Centern öppnar för dialog om EMU. https://englundmacro.blogspot.com/2009/05/mats-qviberg-tar-miste-om-centerpartiet.html Finansmannen Mats Qviberg har bytt fot i EMU-frågan och säger nu att han ska rösta nej  "Jag bestämde mig i onsdags när jag lyssnade på Jens Spendrup." Dagens Industri 6/9 2003 Annie Johansson numera Lööf (C) ångrar ett politiskt beslut: att hon röstade nej till att byta krona mot euro 2003. https://englundmacro.blogspot.com/2011/08/annie-johansson-c-ar-en-kappvandare-om.html

"Vi såg att alla varningslampor lyste rött. Alla signaler från bankvärlden sa samma sak. Det gick inte längre att veta om svenska banker skulle kunna sköta sin finansiering på den globala marknaden", berättar Stefan Ingves. "Riksbankens valutareserv var netto lika med noll. Allt hade sålts på termin. Det innebar att i viss mening var Sverige vid vägs ände när det gällde den tidigare regimen", berättar Stefan Ingves. Gunnar Örn DI 28 oktober 2015 https://www.di.se/weekend/den-skuldmedvetne/ Highly Recommended Krisen i banksystemet utlöstes ... av ett internationellt misstroende och inansieringssvårigheter på den internationella marknaden. Urban Bäckström i Ekonomisk Debatt nr 1/98 https://www.internetional.se/emuallan.html#sandlista

Omvärlden litade inte på Sveriges ekonomi och statens försök att rädda den svenska kronan genom att chockhöja räntan resulterade i ekonomisk kollaps.   SvT 22 november 2021 https://www.svt.se/nyheter/ekonomi/folk-sparade-da-blev-det-annu-varre När kronkursförsvaret hade misslyckats, och konkurrenskraften därmed förbättrats, var det korkat att fortsätta med åtstramningarna. Detta så mycket mera som dollarkursen på 5.30 typ, hade börjat stiga igen av egen kraft. Göran Persson om 90-talet: Vi gjorde mycket fel, naturligtvis. Kanske borde vi ha sparat lite mindre. SvD 7 maj 2017 https://englundmacro.blogspot.com/2017/05/goran-persson-om-90-talet-vi-gjorde_7.html   På hemmaplan var det betydligt färre som öppet vågade kritisera valutapolitiken En av dissidenterna på den borgerliga kanten var Timbroekonomen Rolf Englund Gunnar Örn, Dagens Industri 15 september 2012  Tack Gunnar för dessa ord som har varit till stor tröst för mig. https://www.internetional.se/dn92.html  

Over the past four decades, total debt more than tripled to 350 per cent of global gross domestic product. No matter what happens to near-term inflation and growth, the world is too indebted for rates to rise much higher. Ruchir Sharma FT 22 November 2021 https://www.ft.com/content/c9e0c2c1-55af-4258-9c92-92faa111f41e The writer, Morgan Stanley Investment Management’s chief global strategist, is author of ‘The Ten Rules of Successful Nations’ Credit Markets Are Full of Alarms and No One Cares The Federal Reserve’s corporate-bond bailout in March 2020 has helped encourage a debt binge unlike any other. Investors see little choice but to whistle past the graveyard. Risks may be piling up, but haven’t you heard Junk-rated companies have the least debt relative to earnings since 2015. “Covenants do continue to get worse,” said Pisano. “Every day something comes up that makes them worse.” Brian Chappatta Bloomberg 22 november 2021  https://www.bloomberg.com/opinion/articles/2021-11-22/credi

 MP3 the third-generation monetary policy that now prevails worldwide. MP3’s key feature is closely coordinated monetary and fiscal policy. MP3 creates demand without creating any supply. Under MP3, governments and central banks responded to COVID by sustaining incomes without sustaining supply. The result was rising demand relative to supply, and here we are. So consumers, unable to spend on services, demanded more goods—roughly 15% more than our logistical infrastructure had ever produced and delivered. Et voila, supply shortages. Throw in supply chain problems and you get inflation in goods. My friends at Denmark’s Nordea Bank keep a sharper eye on US inflation than some Americans do. Their latest outlook is more than a little concerning https://corporate.nordea.com/article/69282/us-inflation-five-charts-on-why-us-inflation-hasnt-peaked-yet?mc_cid=0b36a12788&mc_eid=2d023d1f41 But the real threat is housing prices. Shelter inflation has looked subdued in this cycle because of CPI

And given the actual inflation story, calls for the Federal Reserve to raise interest rates to cool off the economy look premature at best. Paul Krugman NYT 19 November 2021 https://www.nytimes.com/2021/11/19/opinion/inflation-economy-supply-chain.html Inflation: is now the time to get worried? Policymakers are divided over whether rising prices are temporary or permanent. A wrong response could derail the recovery   “team transitory” is in an increasingly fierce battle with “team permanent”. Chris Giles  FT The Big Read  19 November 2021 https://www.ft.com/content/570e9180-45fb-4157-9727-553c2471c309  

 For many of today’s leading policymakers and economists, the 1970s inflation and the discontent it caused are hard to forget Among this group, former Fed Chairman Paul Volcker is regarded as a brave public servant—the one person who had the will to break that inflation through a series of politically unpopular rate hikes that induced a recession.  Total nonfarm payrolls stand at 148 million, 5 million below the 153 million before the pandemic. Fed that for years missed its employment goals or underestimated how strong the labor market could get without triggering sustained inflation. Pulling a Volcker now might entail ignoring politicians, Ph.D. economists, and various editorial boards who all want a fast turn to inflation-fighting mode.  Joe Weisenthal https://www.bloomberg.com/news/articles/2021-11-19/fed-s-powell-fights-high-inflation-in-his-1970-s-paul-volcker-moment Volcker startade sedelpressarna, inte Greenspan. Gavyn Davies 6 april 2014  https://englundmacro.blogspot.com/2014/

Sverige /han menar den svenska staten/ borde skuldsätta sig mer, är ett budskap som allt oftare hörs i den politiska debatten.   I de flesta länder har såväl offentlig som privat skuldsättning skenat – i Sverige mest privat, svenska hushåll är näst mest skuldsatta av jämförbara europeiska länder.  Men så länge räntorna på lånen förblir låga är det inget att oroa sig för, och så kommer det att förbli, menar entusiasterna. Teorin är fundamentalt feltänkt av flera anledningar. I modern tid har ingen av Sveriges tillväxtperioder drivits av offentlig skuldsättning.  Den enkla poängen är att i stort sett alla resurser i ekonomin har en alternativ användning. Att använda dem som staten önskar har alltså en alternativkostnad, vad nykeynesianerna än säger. Mattias Svensson SvD 2021-11-18 https://www.svd.se/spenderglada-politiker-tjanar-pa-att-du-forlorar Professor Lars Calmfors har bytt åsikt om det finanspolitiska ramverket https://englundmacro.blogspot.com/2021/11/professor-lars-calmfors-har-

Fuss was sceptical that the Federal Reserve would be able to lift interest rates significantly in the coming years  - said he was mostly worried about the high-yield bond market, often also called junk bonds. Fuss started his career in finance in 1958, when he left the US Navy for a job at Wisconsin bank. After a subsequent stint managing Yale University’s endowment he joined Loomis Sayles in 1976 and managed one of its flagship bond funds until he finally stepped back from day-to-day portfolio management earlier this year, aged 87. The average yield of US high-yield bonds spiked to a peak of over 11 per cent in March 2020, but fell to a record low of under 4 per cent earlier this autumn. FT 19 November 2021 https://www.ft.com/content/50e1c3c1-8922-40d2-9c95-737fb5bb8ad0 U.S. corporate financial debt to $11.2 trillion from $2.5 trn over the past three decades https://englundmacro.blogspot.com/2021/08/us-corporate-financial-debt-to-112.html

The US government bond market used to be considered to be the world’s most liquid and deep asset class, in March 2020 that cosy assumption was smashed apart. Fed intervention prevented a complete crash. But it forced the Fed to step in with what John Williams, NY Fed president, has called “staggering” amounts of liquidity support, reaching almost $1tn each day. Gillian Tett FT 18 November 2021 https://www.ft.com/content/d2639eee-0b36-40b4-87c5-41087d8b7893 Bill Gross  says stimulus and low interest rates have created ‘dangerous’ situation https://englundmacro.blogspot.com/2021/11/2005-alan-greenspan-complained-of.html US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941. Niall Ferguson FT February 10 2010 https://englundmacro.blogspot.com/2018/03/us-treasury-safe-haven.html

 Whatever Mr Putin’s plans for Ukraine, possibly seizure of the Donbass and the Black Sea coast as far as Odessa, a parallel showdown with Brussels over the Baltic Nord Stream 2 pipeline looks certain to escalate. German regulators have suspended the certification process because Gazprom was trying to get around EU monopoly laws Ambrose Evans-Pritchard 18 November 2021 https://www.telegraph.co.uk/business/2021/11/18/energy-crisis-looms-know-would-rather-winter/

What do you do when the old assumptions stop making sense? For people working in finance, it’s a moment of extreme career risk—or a chance to be a hero to their bosses and their clients if they get it right. Many have never been here before. Already, the real annual yield on a safe 10-year Treasury—accounting for the market’s expected inflation—is a percentage point below zero. For the moment, investors seem to care as much about having a haven as they do about staying ahead of inflation. Katherine Greifeld Bloomberg 18 November 2021 https://www.bloomberg.com/news/articles/2021-11-18/wall-street-bets-on-surging-inflation-could-kill-career-of-top-traders They don’t want to be what investor Mark Kritzman calls “wrong and alone.”  A manager with one-third of assets in Chinese stocks won’t get fired if that market falls, since almost every other firm has similar exposure. Being wrong together gives every manager plausible deniability. But a firm that holds little or nothing in Chinese stoc

  Tthrough September, the total container volume coming into and leaving the nation has increased by nearly 22% from one year ago, and over 16% from 2019.  This amount of container traffic, as measured by twenty-foot equivalent units, or TEUs, is unprecedented. It is being propelled by the volume of imported containers coming into the United States, which have increased by 25% from 2020 and nearly 20% from two years ago.  Many of the containers are being sent back empty.   MarketWatch Nov. 18, 2021 https://www.marketwatch.com/story/this-is-how-americas-booming-demand-for-goods-shattered-the-supply-chain-11637242353 Empty shipping containers worsen stress on the US supply chain FT 18 November 2021 https://www.ft.com/content/40f667ce-b979-4171-9cd1-b935d06728c4                                                                                   Supply Chain Crisis https://englundmacro.blogspot.com/search/label/supply

 “The firm has lost the capacity to sell new homes, which means its main business model is effectively defunct. This makes full repayment of its debts unlikely,” the analysts said. CNBC NOV 18 2021 https://www.cnbc.com/2021/11/18/china-evergrande-default-is-highly-likely-sp-says.html Evergrande shares slip ell 5.7% after deal to raise $273 million https://www.cnbc.com/2021/11/18/evergrande-shares-slip-after-striking-a-deal-to-raise-273-million.html

“People are really underappreciating the degree of risk that they’re taking because now that we have — especially for the really big megacap names — even greater overvaluation than we’ve had before, the downside risk is extremely high,”   “We’ve had all-time record levels of insider selling meaning that the top executives, the people that are the most experienced investors in the world, have been pretty much spending all year getting rid of their stakes in some cases and unloading huge amounts of shares they have accumulated for decades,” said Kaplan. A year ago Steven Jon Kaplan predicted a big selloff that didn’t really materialize For 2022, he sees  highflying stocks falling hard and possibly panicking inexperienced investors. That is because “anybody who’s 30 years old or younger, the last time we had a bear market, they were in high school or even earlier grades so they don’t even have the experience of knowing what it’s like to invest in a bear market,” MarketWatch Nov. 18, 2021 

Having enjoyed tenure at Harvard University, the London School of Economics, and New York University, and now a steady gig at Stanford’s Hoover Institution, the historian Niall Ferguson now plays the victim. He will soon decamp, he lets us imagine, to “a new kind of university – the University of Austin.”  If Friedrich Engels were still around, could he endow a chair for Karl Marx? Still, after reading Ferguson’s announcement, I cannot help but hear Humphrey Bogart’s famous words echoing in my ear: “Of all the gin joints in all the towns in all the world, [he] walks into mine...” James K. Galbraith, a trustee of Economists for Peace and Security, holds the Lloyd M. Bentsen, Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs at the University of Texas at Austin.   Project Syndicate 12 November 2021 https://www.project-syndicate.org/commentary/university-of-austin-by-james-k-galbraith-2021-11 Humphrey Bogart’s famous words  https://www.imdb.com/title/tt0034583

 The claim: A 'Grand Solar Minimum' will halt global warming The claim: Global warming is good The claim: Climate change action will make people poorer The claim: Renewable energy is dangerously unreliable  BBC Reality Check 17 November 2021 https://www.bbc.com/news/science-environment-59251912  

 Simon Clark Youtube https://www.youtube.com/watch?v=CNkVGiSgOM4

 ”Låt säga att jag är kontroversiell. Hur länge till tar man det på allvar och när betraktar man det bara som gammelmansgnäll?” Jag tror att det är en riktig iakttagelse att gamla människor ofta inte tas på samma allvar i samhällsdebatten, och särskilt för en person som Engdahl måste det vara en smärtsam del av åldrandet. Lisa Irenius SvD  https://www.svd.se/horace-engdahl-har-ratt-om-aldrandet Horace Engdahl i en intervju med SvD:s Elisabet Andersson  https://www.svd.se/jag-angrar-att-jag-betedde-mig-obeharskat

perhaps the Fed should take that as a sign that the financialization of the American economy has gone too far. One particular scene from “Yes, Prime Minister,” on a four-stage strategy to crisis management, does seem to capture the messaging on inflation The “neutral” fed funds rate that’s neither accommodative nor restrictive is 2.5%. That’s a long way from zero. Brian Chappatta Bloomberg 17 november 2021  Highly Recommended https://www.bloomberg.com/opinion/articles/2021-11-17/the-fed-has-more-options-than-0-rates-or-recession

 “When I step back and think about my 40-year career, there have been periods of time when greed has far outpaced fear -- we are in one of those periods,” Solomon said in an interview at the Bloomberg New Economy Forum in Singapore.  “My experience says those periods aren’t long lived. Something will rebalance it and bring a little bit more perspective.” “Chances are interest rates will move up, and if interest rates move up that in of itself will take some of the exuberance out of certain markets,” Solomon said.  Bloomberg 17 November 2021 https://www.bloomberg.com/news/articles/2021-11-17/goldman-s-solomon-warns-pandemic-exit-could-get-bumpy  

  Tack till Anders Fischer och Vlade Naumovski

I've used this quote in past blog posts to express a world-weary, second-best opinion of elected officials, political campaigns, or voter ignorance. It's hardly inspirational. In research an article that I'm writing about Churchill, though, I've come to see that his quote was very different.  Here is what he actually said (in a speech to the House of Commons in 1947): [I]t has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time; but there is the broad feeling in our country that the people should rule, and that public opinion expressed by all constitutional means, should shape, guide, and control the actions of Ministers who are their servants and not their masters. This conveys a completely different. Churchill was not saying that he thought democracy is the worst form of government except all others. Indeed, he was rejecting that notion in favor of popular rule. And if you look at his speeches ov

This is how the world is beginning to feel to someone whose life as an economist began in the 1970s: over-optimism on potential supply, until it was too late.  Current policy would make sense in a depression. But we no longer risk a depression. All the big central banks are still largely locked into policy settings introduced in March 2020, at the peak of the Covid-induced panic. In the US, this seems wildly inappropriate. Martin Wolf FT 16 November 2021 https://www.ft.com/content/dc3bedc7-5694-4868-8b86-f9a215966f52

 – Jag har brottats med frågan. Jag tycker nu att argumenten för en omprövning har blivit starkare än argumenten emot. Det handlar om det finanspolitiska ramverket som Sverige har haft sedan 1990-talet.  Utgiftstak, överskottsmål, skuldankare. Tekniska termer. Men i grund och botten regler som går ut på att Sverige över tid ska spara, att staten ska ta in mer pengar än den gör av med. SvD 14 November 2021 https://www.svd.se/hogre-skuldsattning-ar-inte-ett-problem  Det är olyckligt att frågan tas upp nu. Det är inte bra, det gör att hela konstruktionen förlorar i trovärdighet, säger Harry Flam, som var ordförande i rådet från 2016 till 2020. Lars Jonung, ordförande 2011 till 2013, håller inte med. Ramverket har tjänat oss väl och det finns inga övertygande skäl att ändra på det innan nästa översyn, säger han. John Hassler, ordförande mellan 2013 och 2016, håller i mångt och mycket med. Det är ingen fara om Sveriges statsskuld skulle växa. – Det är verkligen en statsfinansiell gratislunc

The technologists on the front line solving the problem, and the corporations racing ahead with net zero faster than the political class can keep up, or the environmental old guard seems able to believe. It was a festival of optimism. In one room Rolls-Royce engineers explained how they can already run the world’s existing fleet of passenger jets on 50pc clean fuel, with 100pc clean energy engines being tested successfully, and with the prospect that this fuel will be generated by small modular reactors. In another room, CWP Global explained how it is developing super-sized renewable hubs in Patagonia, or the Sahara, or the Australian outback, able to produce breathtakingly cheap electricity from wind and solar.  Few understand how quickly Big Money has gone from being the careless enabler of fossil pollution and land abuse to becoming instead the arch-enforcer of the green order, pulling forward change Ambrose Evans-Pritchard 16 November 2021 https://www.telegraph.co.uk/business/2021/

 to construct an investment vehicle that does more than satisfy just one of these two goals.  These two criteria consist of a short-term goal of being correlated with inflation, and a long-term goal of outperforming inflation. TIPS — Treasury Inflation-Protected Securities? They are an extreme example, since they do an unparalleled job of satisfying the short-term goal while failing to satisfy the long-term goal.  That’s because, by design, the TIPS yield is pegged to changes in the CPI. Yet TIPS do a very poor job of fulfilling the long-term goal. In fact, their real yield currently is negative. Mark Hulbert MarketWatch 16 November 2021 https://www.marketwatch.com/story/heres-how-stocks-gold-tips-and-specialized-etfs-stack-up-as-inflation-fighters-11637050914

 “We could handle it right now,” Akins said in an interview on “Mad Money.” AEP plans to invest $38 billion in capital from 2022 to 2026, including an operation to construct a more efficient grid.  “There are some utilities that are very good at keeping up and there are others that aren’t,” Cramer reflected while speaking with Akins. “Not all grid is created equally.” https://www.cnbc.com/2021/11/12/we-could-handle-it-right-now-aep-chief-says-us-power-grid-can-sustain-influx-of-evs.html

Booming deal activity, a hot IPO market and climbing equities mean bankers and traders are in line for outsized performance-based compensation  CNBC NOV 16 2021 https://www.cnbc.com/2021/11/16/wall-street-is-set-for-biggest-bonuses-since-great-recession-report.html  

The Seventh Seal is a film about the silence of God. It’s set in medieval Europe, during the Plague and the Crusades. The Seventh Seal is about medieval European society’s response to the apocalyptic destruction wrought by the plague. As investors, we too wrestle with God’s silence. It’s not war or plague that shakes our faith but changes in the structure and behavior of financial markets. How do we respond? Inquisitors burn witches. Charlatan theologians prey on the weak and the naive. Flagellants put on bizarre religious displays. https://demonetizedblog.com/2019/01/09/mortification-of-the-flesh/

 I say the same thing as is elegantly written on below https://demonetizedblog.com/important-disclosure/

 He had hiked the Fed’s target rate six times, by a total of 150 basis points, and yet he had barely budged the 10-year Treasury yield.  It remained steady, and continued its gently declining trend.  A quiescent 10-year rate enabled the disastrously over-ambitious structured credit monstrosities that would bring down the economy.  Now we have a new version of the conundrum. Not even this inflation spike can dislodge the most reliable and most important trend in modern finance John Authers Bloomberg 16 november 2021 https://www.bloomberg.com/opinion/articles/2021-11-16/greenspan-s-bond-yield-conundrum-has-returned-to-haunt-markets Conundrum at IntCom - 2005 and all that https://www.internetional.se/conundrum.html Bill Gross  says stimulus and low interest rates have created ‘dangerous’ situation   ... financial euphoria in everything from stocks to digital assets like “non-fungible tokens” Gross sceptical inflation would stay this high or accelerate further predicted, however, that it w

global production of coal, oil and gas must start declining immediately and steeply. Nothing that came out of Glasgow suggests this will happen.  UN climate process does not work. This is not because the science discussed at the COP meetings is faulty. The problem is political.  Domestically, politicians have good reason to fear that the cost of decarbonisation will be electoral defeat or social unrest.  The repeated failures of the UN process have led many to denounce the current generation of world leaders as deficient or immoral. But different leaders, placed under the same pressures, would probably come up with similar results. Gideon Rachman FT 15 November 2021 https://www.ft.com/content/ae6a8e8f-94db-4f06-a377-343a84e9be4d  

Unlike the EU’s green deal, China is likely to deliver on what it pledges,  https://www.telegraph.co.uk/business/2021/11/12/china-final-giant-piece-surprisingly-successful-cop26/ The industrial West that account for the vast majority of the 2,500 gigatonnes of atmospheric carbon accumulated since the mid-19th Century https://englundmacro.blogspot.com/2021/11/the-industrial-west-that-account-for.html

Global warming has already seen temperatures rise by 1.1C since pre-industrial times, as a result of the release of about 2,400 gigatonnes of carbon dioxide since 1850 from human activity. FT 12 November 2021 https://www.ft.com/content/3e287ff2-0f74-43f4-85ee-bf48ee01c934 COP-presidenten i tårar – här klubbas historiska avtalet igenom https://www.svt.se/nyheter/utrikes/klimatavtalet-klart-forandringar-i-sista-minuten  Men oavsett allt kommer isarna fortsätta att smälta och haven kommer fortsätta att stiga. Erika Bjerström SvT  13  November 2021 https://www.svt.se/nyheter/utrikes/analys-en-historisk-enighet-om-att-fasa-ut-fossila-branslen   6 takeaways from the U.N. climate conference https://www.nytimes.com/2021/11/13/climate/cop26-climate-summit-takeaways.html COP26 has achieved more than expected but less than hoped More ambitious climate plans are vital at the next conference a year from now THE EDITORIAL BOARD FT 14 November 2021 https://www.ft.com/content/fdbf574a-1294-4595-ab8a-b

Break-evens are the difference between the yield on Treasury inflation protected securities — or the so-called real yield — and the yield on a similarly maturing Treasury note. Because interest payments on Tips are adjusted for inflation, the break-even rate signals how traders and investors predict inflation will move in the future.  FT 12 November 2021 https://www.ft.com/content/59d0b03a-f716-4c7a-9bf5-b5c87082cbdd U.S. consumer sentiment hits pandemic low as inflation expectations hit 13-year high https://www.marketwatch.com/story/u-s-consumer-sentiment-hits-pandemic-low-as-inflation-expectations-hit-13-year-high-11636730249 Yields on inflation-protected bonds maturing over the next couple of years are strongly negative, implying that investors expect rapid price rises in the near term.  But longer-term market expectations of inflation have remained stable. Krugman NYT 11 November 2021 https://www.nytimes.com/2021/11/11/opinion/inflation-history.html

“Since the U.S. financial markets have achieved new levels of insanity, we want to make sure we document this moment in time for posterity’s sake. Apparently, we have not learned anything from the Equity, Housing and Credit bubbles that occurred between 1999 and 2008. “It can’t be any clearer than the fact that the S&P 500’s market capitalization is 177% of U.S. GDP,” adds O’Rourke MarketWatch 12 November 2021 https://www.marketwatch.com/story/doubting-that-we-could-be-in-a-stock-market-bubble-heres-the-chart-you-need-to-see-11636719571 A “fear of missing out” has gripped global markets, lifting everything from stocks to cryptocurrencies to record highs and forcing even staunch bears to throw in the towel. US equities are at the epicentre of the worldwide rush into stocks that has almost doubled the MSCI All-World share index since the coronavirus crisis nadir in March 2020  FT 13 November 2021 https://www.ft.com/content/637b2a59-f64d-46b6-a8a8-0072e3a936d2 ‘Bearmageddon’ for stock

The first type includes pioneers of the field such as David Ricardo, William Stanley Jevons, and, in our own time, Robert Lucas. They all aimed to economize knowledge in order to explain the largest possible amount of behavior with the smallest possible number of variables. The second category, which includes Thorstein Veblen, John Maynard Keynes, and Albert O. Hirschman, sought to broaden economic knowledge in order to understand motives and norms of behavior excluded by mainstream analysis but important in real life. Robert Skidelsky Project Syndicate 12 November 2021 https://www.project-syndicate.org/onpoint/veblen-keynes-hirschman-biographies-economics-outsiders-by-robert-skidelsky-2021-11 Why do economists continue to get it so wrong? Lucas https://englundmacro.blogspot.com/2019/10/why-do-economists-continue-to-get-it-so.html

 The North American jet stream forms where warm and cold air meet. In North America, the winds swoop down from Alaska toward the continental U.S. As the jet stream changes shape and location, it can have significant effects on weather, acting like a wall that keeps the region warm to the south and cold to the north. WSJ 11 November 2021 https://www.wsj.com/articles/la-nina-is-coming-to-shape-winter-forecasts-what-to-know-11636666122?mod=hp_lead_pos12 The Omega-Shaped Jet Stream Responsible for Europe’s Heatwave https://englundmacro.blogspot.com/2019/06/the-omega-shaped-jet-stream-responsible.html

I asked Grossi if the public could ever view nuclear power as “safe” after incidents such as the 2011 Fukushima accident in Japan, when a tsunami overwhelmed a nuclear plant, causing a meltdown and radiation leaks. Grossi was having none of it. “None died from radiation [at Fukushima],” the thousands of deaths that occurred were due to the tsunami and the stress of evacuation. Gillan Tett FT 10 November 2021 https://www.ft.com/content/0823c7a9-ca75-4a75-96cb-e0c006ca791c Don’t Ignore the Nuclear Option Bloomberg 1 June 2020 https://englundmacro.blogspot.com/2020/06/dont-ignore-nuclear-option.html

Raghuram Rajan, who led India’s Reserve Bank of India between 2013 and 2016, said this accommodative policy from many central banks had caused bubble-like conditions. He added that he believed that inflation had now become “more than transitory.” “Worst of all, is that the markets believe that central banks have their back. If things collapse they will come back again with really accommodative policy, and if that’s the case then the central banks are, in a sense, trapped by the markets.” https://www.cnbc.com/2021/11/11/indias-raghuram-rajan-warns-rapid-rate-moves-could-fuel-wealth-shock.html Central bankers nowadays are reticent to see inflation as a problem. In the past, the current levels of inflation would have prompted them to square their shoulders, look determinedly into the TV cameras, and say, “We hate inflation, and we will kill it” – or words to that effect. But now they are more likely to make excuses for inflation, assuring the public that it will simply go away. Raghuram G

People often ask me: “What’s the point of owning bonds with interest rates so low?” Cullen Roche MarketWatch 10 November 2021 https://www.marketwatch.com/story/you-think-the-u-s-will-get-hyperinflation-theres-a-better-chance-that-interest-rates-will-go-to-zero-11636556375 Cullen Roche author of the Pragmatic Capitalism blog, where this column first appeared. https://www.pragcap.com/

The narrow issue of whether this inflation is in any meaningful sense “transitory” has now been settled. It isn’t. Now for the much tougher questions of how long it will last, how bad it will be, and what to do about it. The trimmed mean is 5.3 standard deviations above its norm for the last 10 years, considerably more than the headline rate.  “CPI excluding everything you’d like to exclude” rose last month to exceed 4% for the first time since 1991. For the next few months, with the “transitory” debate over, one topic will dominate the debate — rents. Shelter accounts for 32.5% of the headline CPI, and to date inflation in rents has been unremarkable. John Authers Bloomberg 11 november 2021 https://www.bloomberg.com/opinion/articles/2021-11-11/it-s-official-the-inflation-numbers-are-a-hot-sticky-mess   Inflation Shock Tears Up Trader Playbooks From Stocks to Bitcoin https://www.bloomberg.com/news/articles/2021-11-11/inflation-shock-tears-up-trader-playbooks-from-stocks-to-bitcoin