What have I done? Caveat Emptor

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_emptor

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 privata källor kommer att bli lättare. Men u-länder med enorma skulder och stora fasta återbetalningsskyldigheter kommer efter konventionella mått att vara föga kreditvärdiga. Om den offentliga hjälpen någon gång i framtiden kommer att upphöra är det svårt att tro annat än att nästa fas skulle bestå i moratorium på förfallande skulder...Detta gör att länder som nu eller inom kort tvingas göra stora återbetalningar... bland dessa länder ingår Argentina, Brasilien, Chile, Turkiet och Indien."

Jag hade således tänkt på detta länge innan jag 1983 skrev inte alls den bästa men kanske den första boken om den dåvarande skuldkrisen i Latinamerika.

Ett oräkneligt antal artiklar. Många kan läsas via länkar nedan.

Dessa artiklar tyckte jag själv var de bästa.

Min första löntagarfondsartikel, 1974, i Svensk Linje m anl av Bo Södersten och Villy Bergström 

Det var svårt för många, uppvuxna med Harpsundsandan, att inse faran. 

Vi var några stycken som fick väcka dem. Nu skriver historikerna om det.

Se t ex "Socialists at the Gate / Swedish Business and the Defense of Free Enterprise, 1940–1985":

Just as Eskilsson had been absolutely essential for creating a new infrastructure for the opinion formation of the business community in the late 1970s, he was also the principal administrator of the campaigns against the wage-earner funds. 

He was, moreover, surrounded both at the higher and lower lever in the SAF hierarchy by like-minded individuals with a strong ideological commitment to free market ideas, such as Curt Nicolin, Olof Ljunggren, Carl-Johan Westholm, Danne Nordling and Rolf Englund. 

Källa: Rikard Westerberg Dissertation for the Degree of Doctor of Philosophy, Ph.D., in Business Administration. Stockholm School of Economics, 2020 

https://englundmacro.blogspot.com/2020/11/socialists-at-gate-timbro-och-dess.html

Jag kände mig till och med tvungen att utmana familjen Wallenberg och styrelsen för SE-banken, där lustigt nog Rudolf Meidner var ledamot som statlig representant.

https://www.internetional.se/resevd977.htm

 - En ledande direktör var Grängeschefen Erland Waldenström som hade en styrande position inom Industriförbundet. Det ledde till att organisationen tillsatte den s k Vinstandelsgruppen som skulle utarbeta ett system för vinstdelning som man trodde skulle kunna avtala med LO om.

Danne Nordling

Lars Tobissons bok Så nära men ändå inte    

Om Löntagarfonderna på min website

Nya Wermlands-Tidningen NWT

Ett stort tack till familjen Ander som 1977-1979 lät mig skriva ett oräkneligt antal ledare i NWT om löntagarfonderna och som lät mig skriva många förgripliga artiklar om EU och EMU i början av 2000-talet.

Euron

Om Maastrichts föregångare, den s k Werner-planen ur boken "Vår framtid i Europa"

(MUF, 1971) av Jan Brännström, Rolf Englund och Claes-Henric Siven

 https://www.internetional.se/siven.html

Ur Förordet av Anders Björck, maj 1971

Debatten om Sveriges förhållande till den gemensamma marknaden är ingalunda slut i och med att regeringen, därtill pressad av vänsteroppositionen inom det egna partiet och av centerpartiet, har deklarerat att ett fullvärdigt svenskt medlemskap i EEC är uteslutet. Mycket tyder på att EEC-debatten kommer att vara aktuell under ett bra tag framöver.

Flygturen var ordnad av Anders Björck, då ordförande i MUF, sedermera bl a försvarsminister 1991–1994 och förste vice talman, för mer se Wikipedia, Vi samlades vid Barkarby flygfält och möttes av Chefen för Flygvapnet, flögs med DC3 till  F 7 i Såtenäs och fick efter middag och övernattning sitta i baksätet på en flygtur med raketskjutning. Även SSU fick motsvarande behandling.

Jag var förbundssekreterare i MUF några år och senare väskbärare åt Gösta Bohman, en post på vilken jag ersattes av Carl Bildt.

 

När Nigel Farage och jag år 2002 talade i Westminster Abbeys kyrksal

Jag och några andra skulle vara som ett förband innan rockstjärnan skulle göra sin entré. Nigel Farage var rockstjärnan. Jag hade då mycket dimmiga begrepp om honom och lyssnade med skräckblandad förtjusning på hans budskap.

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

https://englundmacro.blogspot.com/2021/01/i-dag-31-december-2020-lamnar.html

Under folkomröstningskampanjen om EMU, på torget i Flen, debatterade jag EMU med Walburga Douglas (m), född von Habsburg.

From 1916 to 1918, my father was crown prince of Austria-Hungary, so he was an important man.

Habsburgs picknick och slutet på järnridån och kommunismen

https://englundmacro.blogspot.com/2009/08/habsburgs-pcknick-och-slutet-pa.html

https://englundmacro.blogspot.com/2019/08/a-picnic-in-meadow-on-hungarian.html

Jag var med om att bilda kampanjorganisationen Medborgare mot EMU. Vi var med i det vinnande laget i folkomröstningen år 2003. 

Euron är dåligt tänkt rent ekonomiskt och leder till federalism, "ever closer union" och i slutändan till ett The United States of Europe, som jag fruktar kommer att sluta på samma sätt som Jugoslavien som också var en politisk, ekonomisk och monetär union. 

Om det finns länkar här och här.  

Federalisterna drömmer om att skapa ett nytt Romerskt rike.

Rome, Habsburg and the European Union

Jag hade rätt om Kronkursförsvaret 

 

https://www.internetional.se/dn92.html

https://www.internetional.se/iccab92.htm

 

Vänliga ord om Rolf Englund i SOU 1999:150, sidan 35

Civilekonomen Rolf Englund (m) är en annan kritisk röst som ofta pekat på likriktningen inom ekonomkåren. Englund var på 70-talet talskrivare åt dåvarande moderatledaren Gösta Bohman, och i många år arbetade han som ekonom och utredare på Timbro, främst med löntagarfondsmotståndet.
Efter turerna kring det så kallade kronförsvaret hösten -92 uppmanade han riksbanksfullmäktiges ordförande Staffan Burenstam Linder att avgå. En tid efter detta tvingades Englund lämna sin tjänst på Timbro.

Englund har konsekvent genom åren låtit faktabaserad analys gå före ideologiska och personliga hänsynstaganden. Sålunda har han varit en hård kritiker också av de egna, exempelvis kritiserade Englund regeringen Bildt för att hellre ha släppt lös arbetslösheten än kronkursen.

Nuförtiden bedriver han sin opinionsbildning från den egna hemsidan www.internetional.se på internet, där han samlar fakta och artiklar om svensk och internationell ekonomi.

Torsten Sverenius om Rolf Englund i SOU 1999:150, sidan 35

https://www.regeringen.se/rattsliga-dokument/statens-offentliga-utredningar/1999/01/sou-1999150/

Torsten Sverenius 

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

Jag har haft fel de senaste typ 15 åren om aktiemarknaden.

 

Update 9 maj 2022

Update 16 juni 2022

https://www.internetional.se/shares2016.htm 

https://englundmacro.blogspot.com/search/label/Wall%20Street

En orsak kan vara att jag är gammal nog att inte bara har upplevt the Great Recession

utan även the Age Of Stagflation.

Zero Interest Rate Policy - ZIRP

December 5, 2009 varnade jag Bismarck för att fortsätta med ZIRP 

- I think it is blatantly obvious that interest rates worldwide are too low and that a larger part of the stimulus should take place through fiscal policy. 

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

But in vain... They persisted with Zero Interest Rate Policy - ZIRP

https://englundmacro.blogspot.com/search/label/ZIRP

I was proud being an economist.

Now I have a page about Economic theory discredited

- Economics may be dismal, but it is not a science

Jag inbillar mig inte att jag är en så oerhört duktig ekonom. Däremot inbillar jag mig att jag är nyfiken på hur det faktiskt förhåller sig och har en viss förmåga att känna igen sanningen om någon annan förklarar den. 

Det är inte svårt att förstå vad som händer i världsekonomin. Det är bara att läsa vad Martin Wolf skriver i Financial Times.

- Om man har en sedelpress går man inte i konkurs.

Det skrev jag i november 2011.

Members of a monetary union issue debt in a currency over which they have no control. It follows that financial markets acquire the power to force default on these countries.

This is not the case in countries that are no part of a monetary union, and have kept control over the currency in which they issue debt. 

Martin Wolf FT May 2012

 

Om lönepengar och lånepengar

Den som fått ett arv av sina avlidna föräldrar bestående av pengar erhållna vid en försäljning av deras hus med stor rea-vinst anser sig ha rätt att med gott samvete köpa en segelbåt för pengarna. 

Detta utan att tänka på att segelbåten är köpt med lånepengar; lånade av den som köpte huset.

https://englundmacro.blogspot.com/2009/08/om-lonepengar-och-lanepengar.html

Betyg för Rolf Englund Timbro 1980 - 1995 av Sture Eskilsson

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

Senare har jag arbetat för min vän finansmannen Tomas Fischer

"Det var jag som betalade Ebbe Carlssons privatspaningar efter Olof Palmes mördare"

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

Englunds lag 1

Har man sagt A, måste man säga B, och har man sagt B är det svårt att säga att A var fel.

 https://www.internetional.se/eso99.htm#lagen

Englunds lag 2 Inflation och handelsbalans. 

U.S. Trade and Current Account Deficit 

här  och här

Cataclysm

cataclysm, n. -- Syn. upheaval, disturbance, disaster, ...

Doom 

Mene, Tekel Daniel 5: The writing on the wall

Doom and more doom

Climate Change, euphemism for Climate Disaster

A basically agree with Greta and having lived in interesting times I fear that my daughter and my grandchildren will live in even more interesting times.

Min första artikel i en stor tidning. Vad gör vi åt befolkningsexplosionen?

Rolf Englund Svenska Dagbladet, Fritt Forum (dåtidens Brännpunkt) 4/8 1967

-  början av 1960-talet uppgick jordens befolkning till ungefär 3 miljarder. Enligt föreliggande beräkningar kommer antalet att år 2000 att uppgå till något mellan 6 och 7 miljarder.

https://www.internetional.se/egosvd19670804.pdf

----------------------

Första gången på bild i Svenska Dagbladet, 11 maj 1943

https://www.internetional.se/43.htm

Läste i Lund. Those were the days...

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

Min barndoms somrar

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

Min barndoms hjältar

Biggles  https://internetional.se/Biggles.html  

och

Prins Valiant  

Tillbaka till startsidan på denna blog.

 

The Bic Picture

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

Dow futures tumble over 800 points on fears over new COVID variant detected in South Africa

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

Geopolitics will bring this long bull market to a close

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/

COP26 in Glasgow disaster

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

Mats Qviberg - aktuell som alltid

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

Det gick inte längre att veta om svenska banker skulle kunna sköta sin finansiering på den globala marknaden", berättar Stefan Ingves

"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

Gunnar Wetterbergs vilseledande historieskrivning om kronkursförsvaret och 90-talskrisen

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

 

The world is in a debt trap

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/credit-markets-are-full-of-alarms-and-no-one-cares

Fed should raise interest rates now

The Fed thought it would have plenty of time to reverse its easy-money policies, but the surge in inflation makes that idea obsolete.

Stephen S. Roach MarketWatch Nov. 22, 2021  

https://www.marketwatch.com/story/the-fed-should-raise-interest-rates-now-to-stop-inflation-instead-of-relying-on-tapering-the-balance-sheet-to-do-the-job-11637590740

The key problem haunting the Fed: can adjustment occur without another 2020-style freeze?

Gillian Tett FT 18 November 2021

https://englundmacro.blogspot.com/2021/11/the-key-problem-haunting-fed-can.html

För varje dag som går med nollränta växer problemen. Hushåll, företag och stater ökar sin skuldsättning.

Alla är glada. Utom riksbankscheferna som vet att de inte har någon plan för återgång till något slags normalitet.

Hur skall detta sluta? Det kommer att sluta illa den dag räntorna stiger. Ju längre det dröjer, desto mer illa kommer det att sluta.

https://englundmacro.blogspot.com/2021/03/for-varje-dag-som-gar-med-nollranta.html

Low GDP growth + high prices is different than the 1970s stagflation, but is stagflation nonetheless and MP3

 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’s bizarre methodology.

Unrealistic housing price assumptions gave Alan Greenspan, Janet Yellen, and now Jerome Powell room to keep rates low. As I said last week, OER is broken. Properly accounted for, shelter costs would have inflation at 10% in a very public manner no one could dismiss as “transitory.”

Higher energy prices lead to higher fertilizer prices, since fertilizer manufacturing uses large amounts of natural gas. Either expensive fertilizer or lack of fertilizer will mean higher food prices.

Neil Howe is my guru for all things demographic, Neil says the overriding #1 issue is labor force participation, not unemployment. 

That last $1.9 trillion stimulus bill was simply an inflation bridge too far. The intentions were good, but there are unintended consequences as it was coupled with QE and zero interest rates.

Low GDP growth + high prices is different than the 1970s stagflation, but is stagflation nonetheless.

John Mauldin November 19, 2021

https://www.mauldineconomics.com/frontlinethoughts/shortages-are-relative

A story quite different from what Summers, Blanchard et al. were predicting

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

 

It took courage to lift rates in 1979 to kill inflation. The gutsy move for today may be to stand fast until we have more jobs

 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/2014/04/volcker-startade-sedelpressarna-inte.html

Here’s Why the Fed Could Stay Easy for a LOOONG Time

https://www.knowledgeleaderscapital.com/2021/11/05/heres-why-the-fed-could-stay-easy-for-a-looong-time/

Moderna ekonomiska teorier berikar staten och kapitalet på andras bekostnad

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-bytt-asikt.html

The high-yield bond market, often also called junk bonds

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 key problem haunting the Fed: can adjustment occur without another 2020-style freeze?

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

Europe is at the mercy of Russia's gas supply, showdown with Brussels looks certain

 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/

For a generation of investing pros, stable prices were a fact of life

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 stocks will be blamed by clients if China booms, since its funds will lag behind their competitors. 

Being wrong and alone is what gets asset managers fired.

https://englundmacro.blogspot.com/2021/09/nobody-knows-anything.html

America’s booming demand for goods shattered the supply chain

 

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

Evergrande default is highly likely, S&P says

 “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

Record selling by insiders is setting up stocks for a big fall, says contrarian investor

“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 

https://www.marketwatch.com/story/record-selling-by-insiders-is-setting-up-stocks-for-a-big-fall-says-contrarian-investor-11637238152

Casablanca for Conservatives - Niall Ferguson plays the victim

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/

Some people were apparently shocked to learn that gambling was occurring at Rick's Cabaret

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

The truth behind the new climate change denial

 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

 

Shouldn't sea levels have risen by now?

 Simon Clark Youtube

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

”Efter en viss ålder börjar folk betrakta dig på ett lite förlåtande sätt, ett lite medlidsamt sätt”, sa Horace Engdahl

 ”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

If the specter of gradually raising interest rates from near zero is enough to cause a market panic...

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

Goldman Sachs Chief Executive Officer David Solomon

 “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 

Diagram energi och befolkning

 

Tack till Anders Fischer och Vlade Naumovski

One of Winston Churchill's famous quotes is that democracy is the worst form of government except for all others

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 over many decades, you find a consistent theme in support of democracy as an ideal that he cherished. 

Gerard Magliocca on January 31, 2019

https://prawfsblawg.blogs.com/prawfsblawg/2019/01/misquoting-churchill-on-democracy.html

 

Fed policy must adjust. Even if the price rises could be transitory, they risk becoming permanent

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

Professor Lars Calmfors har bytt åsikt om det finanspolitiska ramverket

 – 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 gratislunch. Med låga räntor kan vi öka upplåningen utan att vi behöver höja skatten, säger han.

Harry Flam varnar för att Sverige kan hamna i en rävsax i framtiden om vi låter statsskulden stiga nu.

SvD 16 november 2021

https://www.svd.se/calmfors-far-mothugg-inte-lage-att-ata-gratislunchen

Hur blev det så att I Sverige är hård budgetdisciplin, ända sedan 1990-talskrisen, närmast en statsreligion?

Kommentar RE: Budgetdisciplinen blev statsreligion sedan den tidigare statsreligionen, den fasta växelkursen, hade havererat. De ansvariga ville inte erkänna att krisen berott på den fasta växelkursen utan odlade myten om att krisen berott på underskottet i statsfinanserna, därav enigheten om sparpaketen. 

Lars Jonung, även han tidigare ordförande för Finanspolitiska rådet, en annan av statsreligionens överstepräster, gjorde nyligen denna historieskrivning

https://englundmacro.blogspot.com/2021/09/hur-blev-det-sa-att-i-sverige-ar-hard.html

Englunds lag lyder så här: 

”Har man sagt A, måste man säga B, och har man sagt B är det svårt att säga att A var fel.”

Free markets and technology may yet deliver a 1.5C world

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/2021/11/16/free-markets-technology-may-yet-deliver-15c-world/

CWP Global 

https://www.cwp.global/

A perfect inflation hedge should satisfy two distinct criteria, and no one yet has figured out how

 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

U.S. power grid will be able to handle the influx of electric vehicles in the coming years

 “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

Wall Street bankers biggest bonuses since Great Recession

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 and Financial Markets

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/

THIS BLOG DOES NOT PROVIDE INVESTMENT ADVICE!

 I say the same thing as is elegantly written on below

https://demonetizedblog.com/important-disclosure/

2005 Alan Greenspan complained of a conundrum

 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 was likely to stay well above the Fed’s 2 per cent target for the foreseeable future.

“One of these days, one of these years, or one of these decades, the system will collapse, because capitalism depends on savers saving and investing.”

Robin Wiggleswort FT 16 November 2021

https://www.ft.com/content/9f7f32af-a71a-4892-b331-324aa14ff5b7

Bill Gross at IntCom

https://internetional.se/billgross.htm

To have a good chance of limiting global warming to 1.5C,

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

 

Cumulative CO2 emissions since 1750

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

The most optimistic pledges made by countries to limit global warming may not be enough

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-ba11d42538d0

How Far Have We Really Gotten With Alternative Energy?

Here’s a look at five of them: how much they produce, what they cost, and what obstacles they face.

WSJ 10 November 2021

https://www.wsj.com/articles/how-far-have-we-really-gotten-with-alternative-energy-11636571966

Bond sell off continues as 10-year break-even rate reaches 2.76%

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

Michael O’Rourke “In case there are bubble doubts.”

“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 stocks appears to be upon us, strategist says

 Mike O’Rourke MarketWatch 15 March 2020

https://englundmacro.blogspot.com/2020/03/bearmageddon-for-stocks-appears-to-be.html

There are two types of extraordinary economists

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

La Niña have a pronounced effect on weather in the U.S. and around the world

 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

“None died from radiation [at Fukushima],”

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, inflation now “more than transitory.”

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. Rajan Project Syndicate 23 November 2021

https://www.project-syndicate.org/commentary/fed-inflation-policy-framework-has-become-a-trap-by-raghuram-rajan-2021-11

Something in all this does not add up

Raghuram G. Rajan Project Syndicate 2 August 2021

https://englundmacro.blogspot.com/2021/08/something-in-all-this-does-not-add-up.html

Raghuram Rajan, one of the few economists to see the financial crisis coming, wins the Financial Times and Goldman Sachs Business Book of the Year award

FT 28/10/2010

https://englundmacro.blogspot.com/2021/02/rajanthe-third-pillar-how-markets-and.html

What if long-term U.S. interest rates are on a slow march to zero percent?

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 Inflation Numbers. The debate over whether this is transitory is over. The trimmed mean is 5.3 standard deviations above

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

Beijing is working on a controlled implosion of Evergrande

Some investors feared that China Evergrande Group would collapse spectacularly, triggering losses far and wide. 

Instead, the Chinese state is dismantling the giant developer slowly and behind the scenes, in what amounts to one of the biggest financial challenges Beijing has faced in years.

WSJ 10 November 2021

https://www.wsj.com/articles/evergrande-china-crisis-real-estate-developers-11636552507

Å ena sidan och å andra sidan

 – Det mest sannolika är att den högre inflationen är övergående. Men det går inte att utesluta att inflationen permanent kommer upp på en högre nivå, säger Lars Calmfors.

Till skillnad från på 1970-talet så behöver inte inflationen i stora länder sprida sig till resten av världen eftersom vi i dag har rörliga växelkurser, enligt Lars Calmfors.

Jens Magnusson, chefsekonom på SEB, tror att centralbankerna har effektiva vapen mot stigande inflation, och att de också kommer att använda dem om det behövs, även om det blir med en rätt stor försiktighet.

DI/TT 10 november 2021

https://www.svd.se/ekonom-liten-risk-for-galopperande-inflation/i/senaste/om/naringsliv

The rise in prices in the US government bond market is counter-intuitive

The trading climate in the $22tn US government bond market has become less hospitable, adding to choppy moves in securities that act as a foundation of the global financial system.

Liquidityhas deteriorated in recent weeks. That has added to the pressure on regulators to improve a market long viewed as a haven during times of trouble.

FT 10 November 2021

https://www.ft.com/content/ede12db9-0261-4c7e-8f6f-b61de57b2383

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