Englund

 which eventually led to recession and high unemployment, according to hedge fund giant Brevan Howard Asset Management.   “This combination of high inflation, tight labour markets, and uncertain inflation expectations introduces the prospect of a 1970’s style wage-price spiral which proved very costly to reverse during the Volcker Era,”   Bloomberg 31 mars 2022 https://www.bloomberg.com/news/articles/2022-03-31/brevan-howard-sees-rising-risk-of-a-1970s-style-inflation-shock

 1988 sa den franske presidenten François Mitterrand: ”Jag tror och jag hoppas på ett självständigt Europa. Jag hoppas att EG [numera EU] kan enas och utvecklas till en politisk union och om nödvändigt också till en försvarsallians.” ”EU för ett totalt ekonomiskt och finansiellt krig mot Ryssland” deklarerar den franske finansministern Bruno Le Maire i en stund av uppriktighet. Kriget har redan i grunden förändrat EU:s konstruktion och ideologi. Det tidigare försiktiga samarbetet för att hålla tillbaka Rysslands expansionism har brutit samman. Olle Svenning Aftonbladet 25 mars 2022 https://www.aftonbladet.se/kultur/a/dn2jmX/olle-svenning-om-eu-och-kriget-i-ukraina Göran Persson misstog sig om EMU.  Helt fel idé, sa Ulvskog. Fel tidpunkt, sa Nuder. Olle Svenning, Aftonbladet 2008-03-01 http://www.nejtillemu.com/ulvskognuder.htm Prodi: It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created." https://englundmacro.blog

 – Nu får vi räkna om och det innebär rimligtvis att räntehöjningarna kommer tidigare, sade Stefan Ingves Louise Andrén Meiton SvD 30 mars 2022 https://www.svd.se/a/z71KQK/rusning-efter-bundna-bolan-erbjudandet-galler-bara-i-timmar Riksbanken förlänger perioden med nollränta åtminstone fram till tredje kvartalet 2024 RE: Är dom alldeles från vettet? Englund blogg 27 april 2021 https://englundmacro.blogspot.com/2021/07/riksbanken-forlanger-perioden-med.html

  If the way you have dollar hegemony is to have other countries deposit your money in your banks and handle their oil trade with each other by financing it in dollars, but all of a sudden you grab all their dollars and you don’t let them use US banks to pay for their oil and their trade with each other, then they’re going to shift to a different system. Michael Hudson Interviewed   Posted on March 30, 2022 by Yves Smith https://www.nakedcapitalism.com/2022/03/dollar-hegemony-ended-last-wednesday-michael-hudson-interviewed-by-margaret-flowers-on-clearing-the-fog.html Originally published at Popular Resistance https://popularresistance.org/michael-hudson-us-dollar-hegemony-ended-abruptly-last-wednesday/ Every country in the world now realizes its reserves and assets in foreign banks are subject to seizure  I’m not arguing that’s bad; I am suggesting it’s new.  John Mauldin 4 March 2022 https://englundmacro.blogspot.com/2022/03/every-country-in-world-now-realizes-its.html

2008 the West moved to attract Ukraine into its orbit, with the launch of the European Union’s Eastern Partnership and US encouragement for a NATO membership bid. From this point on, tensions over Ukraine were always likely to mount. But over the next 14 years, the EU and its member states pursued a dangerously confused set of initiatives.  But while the US was providing a dollar swap line for Mexico, the eurozone was unwilling to extend similar assistance to EU members Poland and Hungary, let alone to Ukraine. Desperate for dollars and euros, Ukraine had no choice but to turn to the International Monetary Fund and austerity.  Russia made Ukraine a strategic offer: $12 billion per year of subsidies and economic benefits if the country abandoned the Association Agreement – or an escalation of sanctions, should Yanukovych sign the pact. Project Syndicate 28 March 2022 https://www.project-syndicate.org/commentary/european-ambivalence-enabled-war-in-ukraine-by-max-krahe-2022-03   Alliansen

 from minus 0.5% currently.  European government debt has been at the center of a historic selloff across global bond markets.  Inflation that was already surging has been fanned further by the war in Ukraine, accelerating investors’ preparation for the end of ultra-accommodative monetary policy in the region.  Bloomberg 30 mars 2022 https://www.bloomberg.com/news/articles/2022-03-30/europe-bond-traders-eye-end-of-negative-rates-as-inflation-jumps Christine Lagarde “The longer the war lasts, the greater the costs are likely to be,”  “The best way that monetary policy can navigate this uncertainty is to emphasize the principles of optionality, gradualism and flexibility,” Lagarde said. Bloomberg 30 mars 2022  https://www.bloomberg.com/news/articles/2022-03-30/ecb-s-lagarde-says-costs-of-war-increase-the-longer-it-lasts

 DI 30 mars 2022 https://www.di.se/nyheter/chefsekonomen-da-kan-bostadspriserna-falla/ Anders Borg och Irving Fisher om att priserna har planat ut och nått en platå. https://englundmacro.blogspot.com/2014/01/anders-borg-och-irving-fisher-om-att.html

https://mishtalk.com/economics/2021-set-new-annual-records-for-home-prices-2022-continues-the-trend Case-Shiller national home price index showed 19.2% growth between January 2021 and January 2022. https://www.marketwatch.com/story/home-prices-increase-at-one-of-the-fastest-rates-on-record-but-higher-mortgage-rates-should-slow-future-growth-11648559497 Home-Price Growth Accelerated in January Home prices rose at a record pace in 2021 and have continued to climb this year as home-buying demand strongly outpaces the supply of homes for sale. Competition among buyers is leading to bidding wars, and many homes are selling above their list price.  WSJ 29 March 2022 https://www.wsj.com/articles/home-price-growth-accelerated-in-january-11648558827

 Over the years, some in the community had lost access to safe drinking water as new summer homes with pristine lawns and swimming pools guzzled up the supply.  But this was nothing compared to the exploitation that occurred when the avocado and cherry producers moved in, said locals. Thirsty, extractive industries such as lithium and copper mining drive Chile's economy. Nearly 80% of the country's freshwater goes to agriculture, most infamously to the avocado.  Each fruit takes around 70 liters (about 18 gallons) of water to produce. Deutsche Welle 8 March 2022 https://beta.dw.com/en/the-struggle-over-water-rights-in-chile-millenial-president-gabriel-boric/a-60895657 Climate change has arrived with a vengeance in the American West.  The region’s 22-year drought is the second-worst since the year 800 Englund: Climate change has arrived with a vengeance in the American West. (englundmacro.blogspot.com)

 “Clearly such a channel can’t go on forever unless you’re of the opinion that we will consistently see negative nominal US yields in the latter part of this decade,” Jim Reid, head of thematic research at Deutsche Bank, said   If the post-Global Financial Crisis cycle “could be erased from people’s memory banks,” then markets might be pricing 300 to 400 basis points of hikes this year rather than around 240 basis points now priced in, Reid wrote in his note highlighting the chart. That’s “given just how far the Fed is behind the curve.” MarketWatch 28 March 2022 https://www.marketwatch.com/story/the-dam-finally-broke-10-year-treasury-yields-spike-to-breach-top-of-downward-trend-channel-seen-since-mid-1980s-says-deutsche-bank-11648492268 Government bonds on track for worst year since the Marshall Plan was enacted Market Watch 25 March 2022 https://www.marketwatch.com/story/government-bonds-on-track-for-worst-year-since-the-marshall-plan-was-enacted-11648207437

 In his remarks to the troops on Friday, the president sought to portray their deployments as part of a wider "fight between democracies and oligarchs". https://www.bbc.com/news/world-us-canada-60837949 Lavrov says West  tries to 'destroy, break, exterminate, strangle Russian economy and Russia as whole'  25.03.2022 https://www.aa.com.tr/en/russia-ukraine-war/lavrov-says-west-declared-russia-hybrid-total-war/2545758

 Signs of trouble continue to show up in the world’s largest, most liquid government-securities market as the U.S. central bank’s rate-hike cycle gets under way. MarketWatch nice pic 25 March 2022 https://www.marketwatch.com/story/u-s-treasurys-market-continues-to-be-plagued-with-illiquidity-as-feds-rate-hike-cycle-begins-11648226371

... that followed the housing bubble — a bubble that burst 15 years ago Paul Krugman NYT 25 March 2022 https://www.nytimes.com/2022/03/25/opinion/shale-oil-gas-ukraine-putin.html

  As NATO countries had no desire to provoke a nuclear conflict, opting for heavy economic sanctions was the only viable option The biggest problem, though, is when to stop.  It’s not obvious what the purpose of these sanctions is, and it’s unclear how any lifting of them could be justified while Putin stays in power. Even if some ceasefire is agreed, lifting sanctions could be seen as rewarding his aggression. If Russia is made to pay for cleaning up the mess it’s made, that will limit its economy and cause humiliation. So, how much? The wealth stolen from the country by the oligarchs could in the end be used to pay for rebuilding Ukraine (and possibly compensating victims of Russian aggression in Syria.)  The expansion of NATO after the Cold War has often been likened to the errors made by the victors in the Treaty of Versailles after World War I; there is ample chance to make such a mistake again. John Authers Bloomberg 25 March 2022 https://www.bloomberg.com/opinion/articles/2022-0

When the guns finally fell silent in 1918 and peace was forced on Germany at Versailles (in the Carthaginian terms that Keynes decried so eloquently), the Bidens, Johnsons and Macrons of the time tried to restore the old world order of free trade and liberal harmony — and comprehensively failed.  The situation for liberal economics was so dismal that, by the mid-1930s, Keynes himself had abandoned free-market liberalism as a lost cause and was campaigning for national self-sufficiency.   Ukrainian immigrants are being welcomed by nations that only a few months ago were shunning foreigners, and, after a decade of slumber in Brussels, the momentum for integration is increasing.  And look at the West’s leaders! Joe Biden hardly conveys an image of world-changing dynamism; after his initial heroics, Olaf Scholz greeted Volodymyr Zelenskiy’s speech to the German parliament with pudding-like inertia; Emmanuel Macron is bent on winning an election while trying to look like Zelenskiy, in hoodi

One of the keys to the success of the Vienna system was that the victors chose to define their enemy as Napoleon himself, not his country.  In short, in the midst of Vladimir Putin’s war, Europe is once again confronted with the necessity for peacemaking. Mark Mazower FT 25 March 2022 https://www.ft.com/content/567107fa-2760-452b-8452-e656ca5ca478 Mark Mazower is director of the Columbia Institute for Ideas and Imagination in Paris. His latest book, ‘The Greek Revolution: 1821 and the Making of Modern Europe’

Inflation is higher, the labor market tighter and real rates more negative than in past periods when the Fed raised rates without causing a recession Greg Ip WSJ 23 March 2022 https://www.wsj.com/articles/the-odds-dont-favor-the-feds-soft-landing-11648045029

Långt ner i en artikel om Hunter Biden framkommer att man tagit del av filerna och fått dem validerade. Tjugo dagar före valdagen 2020 publicerade New York Post en uppseendeväckande artikel. ”Smoking-gun email reveals how Hunter Biden introduced Ukrainian businessman to VP dad” Biden var vid tidpunkten ansvarig för USA:s relationer med Ukraina. Malin Ekman SvD 23 mars 2022 https://www.svd.se/a/g6GXgA/plotsligt-publiceras-storyn-om-hunter-bidens-laptop By the way: Did you read The Times’s account of the government’s investigation into Hunter Biden’s tax and foreign-business affairs? The news here has less to do with Hunter himself and more with the fact that those emails recovered from the discarded laptop were his, despite the best efforts by Twitter and other social media and news media companies to bury or not look closely enough at that fact on the eve of the 2020 election. https://www.nytimes.com/2022/03/21/opinion/ukraine-hunter-biden-time.html It is not clear whether the criminal

På sina resor han förnam, hur väl försynens nåd reglerat,  som floder överallt placerat där stora städer stryka fram. - ,med flera citat Falstaff Fakir ordspråk och citat - Sveriges största samling ordspråk och citat! (livet.se)

Vice riksbankschef Anna Breman stod i februari bakom bedömningen om styrränta på noll fram till hösten 2024. Men på onsdagen sa hon att det är ”viktigt att inte vänta för länge med att agera”, när inflationsutfallen smular sönder alltför lågt satta prognoser. DI 23 mars 2022 https://www.di.se/nyheter/ingves-gar-mot-u-svang-av-historiska-matt/ Anna Breman har en gedigen meritlista https://www.riksbank.se/sv/om-riksbanken/organisation/direktionen/anna-breman/ Placerarna sliter sitt hår. Hur kan Stefan Ingves vara så lugn? Riksbankschefen räknar med att nollräntan består till hösten 2024. Nils Åkesson DI 14 februari 2022 https://englundmacro.blogspot.com/2022/02/rimligt-att-halla-fast-vid-nollranta.html

  – det menar författaren och ekonomen Carl Hamilton i en ny bok. Bitvis alltför tvärsäkert, men rakt igenom intressant, skriver Fredrik Sjöberg. Hamilton inleder sin spaning med att återberätta historien om Bildt-regeringens misslyckade försvar av kronans fasta växelkurs i början av 1990-talet.  Nationalekonomen Assar Lindbeck får här spela rollen som konsensustyrann, vars idéer om inflationsbekämpning fick ett brett genomslag. Devalveringarnas tid var förbi, punkt. Att kronförsvaret inte fungerade, och att Riksbanken i ett skede tvingades höja marginalräntan till 500 procent, spelade ingen roll.  Massarbetslösheten som följde hade fler orsaker, det är sant; poängen är att politiken i efterhand framstår som galenskap. SvD 23 mars 2022 https://www.svd.se/a/0G7rLE/carl-hamiton-har-sverige-blivit-en-lekstuga-for-mattlosa-politiker Assar Lindbeck vilseleder (kanske till och med ljuger) om sin insats under kronkursförsvaret https://englundmacro.blogspot.com/2012/09/assar-lindbeck-vilselede

I would reduce equities at this point. “The market is giving you a wonderful opportunity to come out.”  “I don’t think the market has factored in yet what’s going to happen to the economy,”  The relative value of stocks may prove vulnerable. “My baseline, for what it’s worth, is we’re going to see a global stagflation, lower growth, higher inflation,” El-Erian said.  “The equity market hasn’t quite priced that in yet because it’s still thinking in a relative space.” https://www.bloomberg.com/news/articles/2022-03-22/el-erian-says-cut-stock-holdings-as-stagflation-concern-grows Fed is increasingly being forced to consider what is the least bad policy mistake it wishes to be remembered for: meeting its inflation target by causing a recession, or allowing high and potentially destabilizing inflation to persist well into 2023. Mohamed A. El-Erian Bloomberg 22 mars 2022 https://www.bloomberg.com/opinion/articles/2022-03-22/markets-are-pushing-fed-into-developing-economy-territory

Every day, millions of sailors, truck drivers, longshoremen, warehouse workers and delivery drivers keep mountains of goods moving into stores and homes to meet consumers’ increasing expectations of convenience.  But this complex movement of goods is far more vulnerable than many imagined. WSJ Video March 2022 https://www.wsj.com/video/series/chain-reaction/why-global-supply-chains-may-never-be-the-same-a-wsj-documentary/4EFE56B6-8A1D-4478-9F88-8F055AFBF675 From Shenzhen to Los Angeles, storms, Covid and labour shortages are causing disruption https://englundmacro.blogspot.com/2021/10/gravitas-plus-supply-chain-crisis.html

 SBB, Balder och Castellum faller alla tungt på onsdagsförmiddagen.  ”Jag tror att det kommer dröja länge innan vi ser en reporänta på över 1 procent i Sverige. Med den grundsynen, och att fastighetsbolagen generellt har väldigt långa räntebindningar, är det inte läge att måla svart färg på väggen”, sa  Aktiespararnas analytiker Robert Andersson till Di nyligen. Victor Hultgren DI 23 mars 2022 https://www.di.se/live/ranterusning-sanker-borsens-fastighetsaktier-sbb-samst-i-sektorn/ SBB grundades så sent som 2016 och värderas nu till cirka 70 miljarder kronor Englund: SBB grundades så sent som 2016 och värderas nu till cirka 70 miljarder kronor (englundmacro.blogspot.com) ”Centralbankerna måste reagera nu”, säger Wallenberg Men den överhängande risken för stagflation – det vill säga en ekonomisk inbromsning samtidigt som inflationen lyfter – skapar ett dilemma, enligt SEB-ordföranden. ”Ska man begränsa inflationen eller se till att ekonomierna rullar. Just nu befinner vi oss i en situati

Vägen dit går via hantering av olika typer av kriser. Blickar man tillräckligt långt fram är det inte orimligt att Sverige kommer att ställas inför valet att antingen dela både penning- och finanspolitik med övriga EU – eller lämna unionen. Viktor Munkhammar DI 22 mars 2022 https://www.di.se/analys/kriget-kan-stalla-sverige-infor-odesval/   - Logiken i det hela rör sig i federativ riktning... Sch! säger Kohl åt mig när jag tar upp det Göran Persson https://englundmacro.blogspot.com/2020/05/prodi-goran-persson-och-federalismen.html

I’ve been writing regular markets commentary for a long time. If I haven’t seen it all, I’ve seen a lot. But the last few weeks provide a great antidote to ennui. I’ve never seen anything quite like this —  and as I lack experience, no, I’m not sure I can explain it or predict what happens next. Inflation, as we all know now, has a lot to do with this. It’s bad for many things in the economy, but particularly for long-dated stocks. As a general rule, the more of an investment’s value that lies in the future (its duration, in financial parlance), the more it will be hurt by rising inflation expectations.  For the ultimate exemplar, this is how the price of Austria’s “century bond,” which won’t be repaying its principal until the year 2117, has performed since it was issued in 2017 Ten-year Treasury yields have been trending downwards steadily ever since Paul Volcker raised rates enough to cause a recession in the early 1980s. How is this going to resolve itself? I wish I knew.  I’ve spe

 Government and corporate debt total returns, has fallen 11% from a high in January 2021.  That’s the biggest decline from a peak in data stretching back to 1990, surpassing a 10.8% drawdown during the financial crisis in 2008.  It equates to a drop in the index market value of about $2.6 trillion, worse than about $2 trillion in 2008. Stocks have bounced back in recent days as more investors bet they will help hedge against inflation, but equities globally are still nursing losses of about 6% this year.  Bloomberg 23 March 2022 https://www.bloomberg.com/news/articles/2022-03-23/global-bond-losses-deepen-to-11-from-2021-high-most-on-record

 I conclude that the U.S. intends to keep this war going. The administration will continue to supply the Ukrainians with anti-aircraft Stingers, antitank Javelins and explosive Switchblade drones. It will keep trying to persuade other North Atlantic Treaty Organization governments to supply heavier defensive weaponry.   I would very much like to share Francis Fukuyama’s optimism that “Russia is heading for an outright defeat in Ukraine.”  The fascinating thing about this strategy is the way it combines cynicism and optimism. It is, when you come to think of it, archetypal Realpolitik to allow the carnage in Ukraine to continue; to sit back and watch the heroic Ukrainians “bleed Russia dry”; to think of the conflict as a mere sub-plot in Cold War II, a struggle in which China is our real opponent. Niall Ferguson Bloomberg 22 March 2022 https://www.bloomberg.com/opinion/articles/2022-03-22/niall-ferguson-putin-and-biden-misunderstand-history-in-ukraine-war Likt Axel Oxenstierna utbrister

There are reasons to be tempted, but buyers can’t count on the Fed to help them out There are two reasons you might be tempted to buy the dip.  The second is that stocks had already fallen a long way (a very, very long way in the case of the stocks ARK likes), which means investors were already prepared for bad news. James Mackintosh WSJ 20 March 2022  https://www.wsj.com/articles/sorry-investors-you-cant-buy-the-dip-anymore-11647738573 Plenty of interesting investments no longer require you to swallow an obviously excessive valuation.  But all of these sectors remain expensive compared to the norm for the post-crisis decade. It’s now a commonplace that the risks of stagflation (economic stagnation plus inflation) have risen since the invasion. It would be absurd to deny this.  But there is a difference between “stagnation” as in slow growth, which allows corporate profits to grow and means that stocks offer some kind of a hedge against inflation, and stagnation as in outright recessio

Former Pimco ‘bond king’ predicts central bank will be unable to go above 2.5% to 3% “We’ve just gotten used to lower and lower rates and anything much higher will break the housing market.”  Dubbed “the bond king” for his decades of successful investing, Gross has been railing against low policy rates for years. “It destroys the savings function,” he said. “Meme stocks and NFTs [non fungible tokens], all of this nonsense in my mind has developed from the inability to earn a decent return in your 401k” retirement plan. Gross, 77, still wakes up early and spends five hours a day at his Bloomberg terminal. But he has given up all thought of another comeback after his acrimonious forced departure from Pimco in 2014, a nasty 2018 divorce and a disastrous attempt to run a new fund for Janus Henderson. FT 19 March 2022 https://www.ft.com/content/5ab01f85-bcc3-4dd7-b2ff-31195425be43 Bill Gross  says stimulus and low interest rates have created ‘dangerous’ situation    One of these days, one o

Europe must deal with an even larger influx of refugees than in 2015.  Federal Reserve chair Jay Powell initiated a series of interest rate increases, saying he was “acutely aware of the need to return the economy to price stability and determined to use our tools to do exactly that”.  Speaking privately to the Financial Times, one senior European economic official added that the conflict would also require huge pan-European solidarity with Poland and other eastern European countries facing the largest burden of finding accommodation and support for the 3mn refugees that have already crossed the Ukrainian border, with many more millions expected. The objective, in the Fed’s eyes, is to make monetary policy restrictive for the first time since the global financial crisis, with interest rates of almost 3 per cent. The Big Read FT 18 March 2022 https://www.ft.com/content/0f7945f5-b269-4d13-9151-c1ac9ec6fddc

Strong week for equities as investors look past Ukraine war, China’s Covid outbreak and Fed rate rise  Almost unbelievably, European stocks have now fully recovered from the shock of Russia’s invasion of Ukraine. The Stoxx 600 index dropped more than 10 per cent from immediately before the invasion in late February to the low point on March 7. It is now right back where it started Katie Martin FT 18 March  https://www.ft.com/content/3c6d1d2c-f186-4718-99a8-7e2f178f7b80 Stockholmsbörsen fortsatte stiga på fredagen – rallyt de två senaste veckorna är det kraftigaste sedan 2009. ”Det som kanske är mest galet är att börsen står högre nu än innan invasionen”, säger Maria Landeborn, aktiestrateg på Danske Bank DI 18 mars 2022 https://www.di.se/nyheter/experterna-om-borsrallyt-risknivan-fortsatt-hog-i-marknaden/ Stocks Finish Week With Strongest Gains Since 2020 Nasdaq gains more than 8% over past five days  The gains returned the S&P 500, the Dow Jones Industrial Average and the tech-hea

Jag hade äran att under flera år vara webmaster för Jacob Sundbergs Institutet IOIR. Han var en hedersman som hamnade i onåd efter 1968 då studenterna, den militanta delen, tyckte att det var de och inte professorerna som skulle bestämma vilka böcker som skulle läsas vid juristubildningen. Särskilt i dessa dagar är hans insats för Ukraina värda att ihågkommas. The Commission had its first meeting in May 1988 in Brussels and was chaired by Professor emeritus Jacob Sundberg.  His findings were delivered to the UN Under-Secretary for Human Rights in Geneva on May 9, and to the President of the Parliamentary Assembly of the Council of Europe on May 10, 1990. https://thereaderwiki.com/en/International_Commission_of_Inquiry_Into_the_1932%E2%80%931933_Famine_in_Ukraine http://www.ukrainianworldcongress.org/Holodomor/Holodomor-Commission.pdf INTERNATIONAL HONORARY MEMBER  the American Academy of Arts and Sciences  https://www.amacad.org/person/jacob-wilhelm-fredrik-sundberg https://www.amacad.

Torbjörn Nilsson SvD 2022-03-16 https://www.svd.se/sverige-ar-fullt-sa-sd--sen-borjade-bomber-falla Enligt vad EU bestämt skall de som flyr kriget i Ukraina få tre års uppehållstillstånd. Det skall bli intressant att se hur vi i Sverige hanterar detta. Tidigare har de som sökt asyl som flyktingar fått permanent uppehållstillstånd och har satts på Svenska för invandrare med målsättningen att integreras med jobb och bostad och med barnen i svenska skolor. Hur skall vi göra nu? Rolf Englund på Facebook 17 mars 2022

 Testifying before Congress earlier this month, Jay Powell was asked if the Federal Reserve was prepared to “do what it takes” to get inflation back under control — and if necessary, follow in the footsteps of his venerated predecessor, Paul Volcker, who regained price stability “at all costs”. Calling the late Volcker “the greatest economic public servant of the era”, Powell responded: “I hope history will record that the answer to your question is yes.”  FT 17 March 2022 https://www.ft.com/content/7eb5e233-a5a9-4eb7-beec-07a75425bd9e Volcker was less austere and more pragmatic than his reputation Greg Ip WSJ 9 December 2019 https://englundmacro.blogspot.com/2022/01/volcker-was-less-austere-and-more.html

    Who’s afraid of a hawkish Federal Reserve? Apparently not stock-market investors, who sent the Dow Jones Industrial Average up more than 500 points MarketWatch 16 March 2022 https://www.marketwatch.com/story/a-wild-ride-how-markets-reacted-to-the-first-federal-reserve-rate-hike-since-2018-11647470196

 Monetary policy will be proactive to respond to the need to boost the economy in the first quarter and new loans will grow appropriately The Financial Stability and Development Committee meeting was chaired by Vice Premier Liu He, who’s in charge of overall economic policy and dealing with financial risks.  Stocks surged. The Hang Seng China Enterprises Index jumped 8.8% in Hong Kong, the most since 2008.  The gauge plunged 26% this year through Tuesday to its lowest level since 2008.  Bloomberg 16 March 2022 https://www.bloomberg.com/news/articles/2022-03-16/china-vows-to-keep-markets-stable-and-handle-developers-risks Hongkongbörsens Hang Seng-index rusar omkring 7 procent på onsdagsmorgonen efter att Kinas regering uppgett att man kommer hålla aktiemarknaden stabil. DI 165 mars 2022 https://www.di.se/live/hongkongborsen-rusar-omkring-7-procent-efter-uttalanden-fran-kinas-regering/

FT Video 10 March 2022 Evergrande: the end of China's property boom | Financial Times (ft.com)

 Den svenska KPIF-inflationen väntas vara 3,4 procent om ett år, 2,6 procent om två år och 2,2 procent om fem år. DI 15 mars 2022 https://www.di.se/live/proffsen-skruvar-upp-inflationsforvantningarna/

The world faces big inflation in costs reminiscent of the oil shock of the 1970s.  Like the 1980s, mounting payments arrears will be a feature of emerging markets. This will start with Russia and Ukraine, albeit for different reasons. Increasingly, Russia will be both unwilling and unable to pay western bond creditors, banks and suppliers.  Like the 1990s, when a surge in market yields caught many by surprise, we should also expect more financial market volatility. Investors are slowly recognising that the “buy-the-dip” strategy for investing has been undermined. That approach had proved very profitable when supported by massive and predictable injections of liquidity by central banks.  Mohamed A. El-Erian FT 15 March 2022 https://www.ft.com/content/db9e3706-84dd-47bc-a943-90d7dfef6abe

What happens with bond payments due Wednesday could kickstart Russia's first foreign-currency default since the 1917 revolution https://www.bloomberg.com/news/features/2022-03-15/what-if-russia-defaults-on-its-debt-ukraine-war-sanctions-risk-150-billion IMF Managing Director  said that while foreign exposure to Russia’s banking sector at $120 billion wasn’t negligible, it was “definitely not systemically relevant.” “Even if the government halts payments to foreign investors on all their holdings of sovereign debt (local and foreign), the total of around $70 [billion] is no larger than the debt Argentina defaulted on in 2020 without causing tremors in global markets (although in Argentina’s case, bond prices didn’t fall quite as far),”  First, there’s the possibility that underneath the aggregate numbers, a systemically important institution is heavily exposed to Russian sovereign debt and is potentially capable of sending tremors through the financial system. Second, a sovereign de

  Vad kostar skjortan? - SVT Nyheter

Mikael Vilenius DI 12 mars 2022 https://www.di.se/analys/70-talet-i-repris-ger-fa-vinnare-har-ar-de-sakra-tillgangarna/ Highly recommended.

 Men vi måste också klara av att ha en nyanserad diskussion om vad västvärlden just nu gör mot Ryssland. Var går egentligen gränsen? 1919, efter första världskriget, gick den brittiske ekonomen John Maynard Keynes runt i Paris och var rasande. Segrarmakterna hade bestämt sig för att trycka ner den tyska ekonomin i skorna. Keynes såg det som ett katastrofalt misstag. Politikerna och diplomaterna begrep inte de ekonomiska konsekvenserna av sitt eget agerande.  Visst kanske det kändes som ”rättvisa” att straffa tyskarna. Men som Keynes skrev ”rättvisa är inte så enkelt”. Det finns också något väldigt deprimerande över hur mycket enklare det verkar vara att mobilisera västvärldens enorma ekonomiska makt för att ”straffa” än för att göra annat Katrine Marçal DN 13 mars 2022 https://www.dn.se/ekonomi/katrine-marcal-att-strypa-den-ryska-ekonomin-ar-en-farlig-strategi/  

 “We warned the United States that pumping Ukraine with weapons from a number of countries orchestrated by them is not just a dangerous move, but an action that turns the corresponding convoys into legitimate targets,” the deputy minister said, according to comments reported by Russia’s state news agency TASS. CNBC 11 March 2022 https://www.cnbc.com/2022/03/11/ukraine-needs-more-weapons-the-west-fears-provoking-war-with-russia.html Relying on sanctions to stop Russia could go ‘terribly wrong,’ says Niall Ferguson The strategy of sitting back and waiting for Russia’s war machine to grind to a halt because of sanctions could go “terribly wrong,” according to Niall Ferguson, a senior fellow at the Hoover Institution at Stanford University. CNBC 11 March 2022 https://www.cnbc.com/2022/03/11/waiting-for-sanctions-to-stop-russia-could-go-terribly-wrong-niall-ferguson.html “We warned the United States that pumping Ukraine with weapons from a number of countries orchestrated by them is not jus

From the safety of New York, the most likely option still appears that Russia gains “victory” in the sense of taking Kyiv and deposing President Volodymyr Zelinskiy, but only at massive cost, and then must deal with a persistent insurgency.  Disturbingly, if that is the outcome, it’s hard to see how any of the western countries and companies that have imposed sanctions could justify lifting them. It’s a situation that directly implies a drawn-out economic cold war. John Authers 14 March 2022 https://www.bloomberg.com/opinion/articles/2022-03-14/the-west-needs-an-off-ramp-from-sanctions-against-russia-too Russian sanctions. The world should remember the Shakespearean revenge on Lehman Brothers https://englundmacro.blogspot.com/2022/03/russian-sanctions-world-should-remember.html  

Lehman infamously was allowed to fail — in part at least as retribution for past perceived misdeeds. To be clear, Lehman’s collapse did not cause the financial crisis, but ... Hank Paulson to push the group into bankruptcy rather than find a rescue solution, was significant — world-changing even. Showed how hard it is to predict the consequences of financial interventions with systemic implications. Patrick Jenkins, Deputy Editor Financial Times, 14 March 2022 https://www.ft.com/content/38f41ebc-f64d-467b-b5ef-22eaefaebb7e Vem skall man tro på om Lehman Brothers? https://englundmacro.blogspot.com/2009/11/vem-skall-man-tro-pa-om-lehman-brothers.html Lehman Brothers at IntCom https://internetional.se/lehman911.htm

 Biden called for an end of normal trade relations for Russia over its invasion of Ukraine and acknowledged the economic hardship the world will endure as it aims to isolate Russia by revoking its most-favored nation trade status, which the president says will make it even harder for Moscow to do business.  Biden said that Western nations were showing restraint in an attempt to avoid starting World War III. MarketWatch  March 11, 2022 U.S. stocks trade mostly lower as Biden says allies trying to avoid World War III - MarketWatch

Fondens strategi är att köpa aktier i lågt värderade företag som gynnas av den starka ryska inhemska tillväxten.  Vår investeringsfilosofi är baserad på ett långsiktigt perspektiv, fundamental analys och en aktiv portföljuppbyggnad, som kombinerar tillväxt med värde. East Capital Ryssland är registrerad i Sverige som en så kallad matarfond och investerar i East Capitals motsvarande mottagarfond i Luxemburg. https://www.eastcapital.com/sv-SE/Corporate/Funds/Equity-funds/Rysslandsfonden/ East Capital Östeuropa https://www.eastcapital.com/sv-SE/Corporate/Funds/Equity-funds/Osteuropafonden/ 54 miljarder kronor under förvaltning East Capital är en del av East Capital Group, uppgifterna avser koncernen, 2021-12-31. https://www.eastcapital.com/sv-SE/Corporate/group/ East Capital, Anders Borg och radarparet Carl Bildt och Bengt Dennis Fonderna East Capital Ryssland och East Capital Östeuropa är stängda för handel den 1 mars 2022 och tills vidare. https://englundmacro.blogspot.com/2022/03/east-

”Det finns länder som oavsett vilken kris man befinner sig i alltid kommer driva att det ska lånas upp pengar och att saker ska betalas av någon annan, antingen av framtida generationer eller skattebetalare i andra länder”, sade hon. ”Den diskussionen, är jag rädd, kommer aldrig sluta”, fortsatte hon.  DI 1 mars 2022 https://www.di.se/live/macron-driver-pa-om-euroobligationer-sverige-motsatter-sig/ EU Debates Joint Bonds to Cover 2 Trillion Euros in Spending EU leaders met for a two-day summit in Versailles, France Ania Nussbaum, John Follain, and Natalia Drozdiak Bloomberg 11 mars 2022 EU Debates Joint Bonds to Cover 2 Trillion Euros in Spending - Bloomberg New York Times om eurobonds och Europas Existentiella Fråga The euro bonds debate reflects what is perhaps the central existential question facing Europeans: how much more central government and integration are they willing to accept to save the euro? https://englundmacro.blogspot.com/2011/08/new-york-times-om-eurobonds-och-europas

The red-hot housing market, which has made the $1 million home the norm in many parts of the country and has shown no sign of slowing.  Housing inventories are at record lows; supply chain bottlenecks are preventing new homes from coming to market quickly; and the coming of age of millennials have all fueled a boom that won’t abate soon. Home prices aren’t a direct part of CPI, the government does measure “shelter” costs through rents and something called owners’ equivalent rent — essentially a survey-informed assessment of how much homeowners think they could rent their home for.  OER is about a quarter of the consumer price index by weight, and perhaps unsurprisingly, it is a lagging indicator.  I look forward to all the great Ph.D. theses that will inevitably be written about what started the worst inflation in 40 years. But for the moment, most analyses lead to the same conclusion: Inflation isn’t leaving soon Jonathan Levin Bloomberg 10 mars 2022 https://www.bloomberg.com/opinion/

I internationella medier läser jag alltid det mesta av ekonomhistorikern Adam Tooze, men just nu är han oundgänglig. Hans text i New Statesman om diskussionen kring den amerikanske professorn John Mearsheimers syn på kriget i Ukraina är obligatorisk läsning. Karin Pettersson kulturchef Aftonbladet 9 mars 2022 Rage aimed at the eminent international relations scholar reflects liberal frustration over the West's limited power to prevent Russia's war in Ukraine. Mearsheimer is disarmingly even-handed. The push for Nato expansion in 2008 to include Georgia and Ukraine was a disastrous mistake.  The overthrow of the Moscow-backed Viktor Yanukovych regime in 2014, a revolution supported by the West, antagonised Russia further.  The West should accept responsibility for having created a dangerous situation by extending an anti-Soviet alliance into what is left of Russia’s sphere of influence.  And then comes the inflammatory conclusion: Putin’s violent pushback should not come as a su

 This was a “dead-cat bounce” — an adjustment after an extreme move There is no particular reason to think that the Wednesday bounce signaled the end or beginning of anything.  Rather that it affirmed markets’ eternal tendency to overshoot in both directions, and for shocks to cause more volatility.  I would like to remind everybody that 60% of the market’s moves last year were after market hours... you’re going to get more moves at the openings than you will during market hours. The adverse move in the eurozone’s terms of trade proves to be a 20-standard deviation event. In other words, it’s so statistically improbable that it boils down to a high-falutin’ technical way of saying that it can’t happen. Europe has an additional problem, in that banks, rather than capital markets, remain its main financing conduit The latest selloff has brought European banks down to barely half their book value.  Food price inflation can create serious problems for governments of developing countries. A

after it stops buying U.S. Treasury and mortgage-backed securities this month.  Those assets have risen $4.8 trillion since the pandemic commenced in early 2020. Powell said the reduction will be conducted “in a predictable manner,” largely through letting obligations it owns mature rather than outright sales.  Nevertheless, this is a big reversal from the $140 billion in asset purchases it had been making each month to support the economy through the pandemic.  Gary Shilling Bloomberg 9 mars 2022   https://www.bloomberg.com/opinion/articles/2022-03-09/federal-reserve-expects-a-soft-landing-don-t-count-on-it From QE to QT John Authers 20 December 2018 https://englundmacro.blogspot.com/2018/12/we-have-known-for-years-that-qe-had.html Secretary Steve Mnuchin convened calls with the CEOs of six leading banks to confirm they had ample liquidity, in hopes of averting another Wall Street selloff Monday 2018-12-24 https://englundmacro.blogspot.com/2018/12/the-us-treasury-department-raised.htm

Charles Goodhart sees an era of inexpensive labor giving way to years of worker shortages—and higher prices. Central bankers around the world are listening. When the global economy tanked in March 2020, the rate of inflation looked like it was heading to zero. That made it a surprising moment for former U.K. central banker Charles Goodhart to predict that inflation would hit between 5% and 10% in 2021—and stay high. Mr. Goodhart reasoned that a seismic shift was under way in the world economy, one that fiscal stimulus and the post-pandemic recovery would only hasten. WSJ 9 March 2022 https://www.wsj.com/articles/inflation-high-forecast-economist-goodhart-cpi-11646837755 https://englundmacro.blogspot.com/2020/08/perhaps-deflationary-forces-that-have.html https://englundmacro.blogspot.com/2022/02/central-banks-are-not-going-to-be-able.html

För ett par veckor sedan avslöjade ”Uppdrag granskning” att Skatteverkets näst högsta chef, överdirektör Helena Dyrssen, ringt för att varna sin gamla kompis Frank Belfrage när SVT började granska att han placerat sina pengar i skatteparadis. Även generaldirektör Ingemar ­Hansson kände till Dyrssens samtal. Hansson är också tidigare kollega till Frank Belfrage. Tillsammans jobbade de som topptjänstemän för regeringen Reinfeldt. Hansson och Dyrssen som statssekreterare, Belfrage som UD:s högste ämbetsman och Carl Bildts ­närmaste medarbetare. Det pikanta i den här historien är att ­finansminister Magdalena Andersson, som är ansvarig för Skatteverket Statsvetarprofessorn Bo Rothstein har forskat mycket om korruption och tillit. Enligt honom har Skatteverkets ledning brutit mot centrala principer i den svenska grundlagen, nämligen att myndigheter ska beakta allas likhet ­inför lagen samt iaktta saklighet och opartiskhet. Rothstein anser inte att ledningen kan sitta kvar. – De har enligt m

Institutional investors are offloading equities to retail buyers in a traumatized market. Retail traders just plowed money into the equity market for a ninth straight week. That’s a stark contrast to the firm’s hedge fund clients, which last week sold $4 billion of stocks, the most on record. Who exactly constitutes the smart money on post-pandemic Wall Street is a point of debate after mom and pop day traders dove into stocks as they were bottoming two years ago.  While a single example of prescience doesn’t imply the retail crowd is right this time, the fortunes minted at the bottom of that crash have constituted powerful psychological conditioning during two years of buy-the-dip euphoria.  A question related to the debate around who has it right at present is whether stocks have fallen enough to become bargains. Based on forecast earnings, the S&P 500 looked much cheaper than it was in January. At 18.3 times profits, the index’s valuation is at the lowest level since the month r

Raising interest rates high enough to put a dent in the housing market would throw the rest of the U.S. economy into recession first. Sixty-five percent of American households own their homes. Stocks and bonds are held primarily by the rich, but it's home equity where the middle class has its wealth.  And right now that wealth is booming, having risen by more than one trillion dollars each of the past three quarters. At the peak of the mid-2000's housing boom that number was more like $450 billion a quarter. Taking out a home-equity loan at a rate of 4% or 5% to support higher spending when your income is being squeezed by inflation might not be the wisest decision, but it's still a much lower borrowing cost than a credit card.  And for a middle-class household that's gained $100,000 in home equity over the past couple years — not an uncommon scenario in much of the country — it's easy to see the appeal. Our dysfunctional, stagflationary housing market is turning in

The potentially extraordinary move comes just a year after the EU launched a 1.8 trillion-euro ($2 trillion) emergency package backed by joint debt to finance member states’ efforts to deal with the pandemic. Any move to allow the EU’s executive to issue joint debt on behalf of the member states would require their unanimous approval.   https://www.bloomberg.com/news/articles/2022-03-08/eu-to-consider-massive-joint-bond-sales-to-fund-energy-defense Göran Persson: - Jag vill inte ha en federativ utveckling. Svenska folket har inte gått med i en federation.  - Logiken i det hela rör sig i federativ riktning... Sch! säger Kohl åt mig när jag tar upp det http://www.nejtillemu.com/goranp.htm

missade EU och USA en historisk chans att hjälpa Ryssland bli en fredlig del av världssamfundet efter Sovjetunionens fall? Eller är det en legend? Tomas Lundin SvD 2022-03-07 https://www.svd.se/hjalpte-vi-till-att-skapa-en-aggressor

 The selling intensified on Monday following reports that a western embargo on oil imports was being considered, sending European gas prices to record levels. “Europe is probably already in recession,” said Luca Paolini, chief strategist at Pictet Asset Management. “Consumers aren’t going to go out and spend the savings they’ve built up when there’s a war happening on their doorstep, and that’s before you consider a big increase in inflation.” The setback for European stocks — saw Germany’s flagship Dax index enter a bear market this week FT 8 March 2022 https://www.ft.com/content/73b3f45e-b096-436c-b6d0-3402a1e2b053

Goods-trade gap is unprecedented, services surplus narrows The value of imports rose 1.2% in January to a record $314.1 billion,  exports decreased 1.7% to $224.4 billion. Bloomberg 8 Maarch 2022 https://www.bloomberg.com/news/articles/2022-03-08/u-s-trade-gap-swells-to-record-as-goods-oil-imports-surge

 Ten-year inflation breakevens just increased to the highest level since 2005, while the yield curve -- the spread of 10- over two-year Treasury yields -- narrowed to levels not seen since the pandemic recession.  History shows an outright inversion, as happened in 2019, would signal an imminent contraction.  Bloomberg 7 March 2022 https://www.bloomberg.com/news/articles/2022-03-07/jolted-traders-surrender-to-recession-paranoia-in-stock-rout

 that almost any portfolio manager whose holdings were rocking through the end of the last year has almost certainly seen a rough turnaround. The fund isn’t quite at the Feb. 24 intraday low, but if it were to end the day around here, it would be a new closing low.  As it stands right now, the exchange-traded fund has fallen roughly 20% since its high in November.  Joe Weisenthal Bloomberg 7 mars 2022 https://www.bloomberg.com/news/articles/2022-03-07/an-etf-that-tracks-popular-hedge-fund-stocks-is-getting-crushed

  The U.S. bond market’s 10-year inflation forecast jumped to a record 2.785%,  while the yield on the benchmark Treasury bond rose 5 basis points at 1.77%.  https://www.bloomberg.com/news/articles/2022-03-06/stocks-face-oil-risks-amid-talk-of-russia-embargo-markets-wrap Dow skids nearly 800 points to end in correction territory as oil spikes and Russia's war in Ukraine deepens - MarketWatch A bear market occurs when broad market prices fall at least 20% from the most recent high over a few months. A stock market correction is when the market falls 10% from its 52-week high.

 scientists found in a study that highlights the illness’s alarming impact on mental function. Researchers identified Covid-associated brain damage months after infection, including in the region linked to smell, and shrinkage in size equivalent to as much as a decade of normal aging. The changes were linked to cognitive decline in the study, which was published Monday in the journal Nature.  https://www.bloomberg.com/news/articles/2022-03-07/brain-shrinkage-cognitive-decline-found-months-after-mild-covid

 Finansinspektionen har i uppdrag att ta emot uppgifter om frysta tillgångar från fysiska och juridiska personer, vidarebefordra dessa uppgifter till EU-kommissionen  och bevilja undantag från frysning i vissa situationer. Utrikesdepartementet samordnar sanktionspolitiken i Sverige. På deras webbplats finns mer information om ansvarsfördelningen mellan myndigheterna och om EU:s sanktionsförordningar. https://fi.se/sv/publicerat/nyheter/2022/utokade-finansiella-sanktioner-med-anledning-av-situationen-i-ukraina/ FI underrättade den 20 september 2021, inom ramen för artikel 458 i tillsynsförordningen EU-kommissionen och Europeiska systemrisknämnden (ESRB) att FI avsåg att förlänga det nuvarande riskviktsgolvet på 25 procent för svenska bolån. FI bedömer att de risker som höga fastighetspriser och hög belåning bland hushållen medför − och som var skälet till att åtgärden ursprungligen infördes − i allt väsentligt kvarstår och att åtgärden fortsatt behövs. FI förlänger riskviktsgolv för sve

  FT 7 March 2022

Five-year inflation breakevens have touched the highest in the 20 years they’ve existed, while the yield curve (the spread of 10- over two-year Treasury yields) is flattening as swiftly as it has ever done. Those inflation expectations have been propelled by the remarkable rise in commodity prices. John Authers Bloomberg 7 March 2022 https://www.bloomberg.com/opinion/articles/2022-03-07/ukraine-confronts-investors-with-risks-of-stagflation-and-nuclear-armageddon

 seeking a fast-track entry procedure that does not exist.  France — a founding member of the EU and notoriously reluctant about enlargement — now agrees that a way must be found This means Moldova, Georgia and also the western Balkans  Asked about Kyiv’s request for EU membership a week ago, Ursula von der Leyen spontaneously answered that Ukrainians “belong to us”. German and French officials may think the European Commission president got carried away, but she was reflecting a new sense of responsibility Sylvie Kauffmann FT 6 March 2022 https://www.ft.com/content/82323347-ebf6-49ae-9099-4e8d5c1c0930 The writer is editorial director and columnist at Le Monde Efter Thessalonikikonferensen 2003 lovade EUs regeringschefer medlemskap i EU till de sex övriga länderna i västra Balkan (Albanien, Bosnien och Herzegovina, Kosovo, Montenegro, Norra Makedonien och Serbien).  https://englundmacro.blogspot.com/2021/12/2004-gick-slovenien-med-i-eu-darefter.html

Hon släpper sitt EU-motstånd. Hon accepterar privatiseringar. Hon kindpussar Carl-Henrik Svanberg. För att hon vill vara statsråd och få något gjort, för att hon vill bli statsminister och ha den yttersta makten. Så beskriver Eva Franchell det. Aftonbladet 6 mars 2022 https://www.aftonbladet.se/kultur/bokrecensioner/a/XqBpnB/recension-av-eva-franchells-bok-om-anna-lindh Anna Lindh http://www.nejtillemu.com/annalindh.htm Nato carried out its threat to bomb Serbia on 24 March, attacking a sovereign European country for the first time in the alliance's history. https://www.internetional.se/kosovo.htm

 almost always necessary to achieve healthy economic outcomes.  That doesn’t mean budget surpluses are impossible—we saw them under the Clinton administration 1998-2001—but it does make them unsustainable, as Wynne Godley and Randall Wray warned.  This thing we call a government “deficit” is just the difference (G-T) between two numbers.  One number tells us how many dollars the government disperses into our hands each year (G) and the other tells us how many dollars it subtracts away from us, mostly through taxation (T). A fiscal “deficit” happens when the government puts in more dollars than it removes (G>T). We can refer to it as a “government deficit,” or we can call it a “non-government surplus.”  Stephanie Kelton 5 March 2022 https://stephaniekelton.substack.com/p/bidens-sotu-mentioned-the-deficit As long as the US runs a giant trade deficit, we are going to have lower interest rates than we would otherwise John Mauldin 11 February 2022 https://englundmacro.blogspot.com/2022/0