Englund

Stock markets are not only ignoring the obvious threats, but seem imbued with extreme optimism. In the autumn of 1929, Irving Fisher, one of the greatest American economists, stated: “Stock prices have reached what looks like a permanently high plateau.”  This turned out to be one of the most incorrect forecasts ever made: in short order, US and global stock markets were hit by the Great Crash, which was followed by the Great Depression. Maybe markets were in some sense “right” before the crash and wrong after it. But who cared? For investors and the hundreds of millions of people across the world whose lives were upended by the disaster, the gods of the stock market had failed for a generation. Why might this story be relevant today? The answer is that the valuation of US stocks is even higher today than in September 1929.  The first global financial crisis after the disaster of the 1930s in 2007-09: the easy monetary — and relaxed regulatory — policies adopted after the stoc...

A Gallup survey last fall found that 66% of Democrats view socialism favorably and only 42% say the same of capitalism. American wealth is concentrated at the top. On this narrow point, the socialists are correct.  The top 1% now holds roughly 30% of the nation’s net worth, and the bottom half holds about 2.5%. But the greatest driver of inequality over the past five years was exactly what the socialists now demand more of: large-scale government spending. When Washington floods the economy with borrowed and freshly printed dollars, the money flows first into assets owned by the wealthiest Americans—stocks, bonds, real estate.  The Federal Reserve cut interest rates to zero and more than doubled its balance sheet, from about $4 trillion to nearly $9 trillion. As big government pumped money into the economy, assets boomed: The stock market has roughly tripled from its March 2020 low.  The wealthiest 10% of households own 89% of all stocks, according to 2021 Federal Reserve...

Regeringen för nu en finanspolitik som är kraftigt expansiv. Enligt Riksgäldens senaste prognos blir underskottet nära 200 miljarder kronor i år och drygt 200 miljarder kronor nästa år.  Detta är långt från det överskott på cirka 25 miljarder som ramverket föreskriver. Enligt LO-ekonomernas bedömning motiverar den höga arbetslösheten stora ekonomiska stimulanser för att få fart på tillväxten och sätta folk i arbete. Men då krävs också att resurserna används på ett sätt som effektivt bidrar till detta. Offentliga investeringar har en hög multiplikatoreffekt I stället har tiotals miljarder adderats till den svenska statsskulden genom sänkta konsumtionsskatter men också skattesänkningar som i hög utsträckning riktas till höginkomsttagare. Några tydliga exempel är förstärkningarna av jobbskatteavdraget på inkomster över 60 000 kr/mån, slopad flygskatt och sänkt skatt på (redan lågt beskattade) investeringssparkonton.  Inför nästa år lovar nu statsministern att staten ska låna ännu...

Whose Legacy Was Dimmed by the Financial Crisis.  The ‘maestro’ rivaled the U.S. president for global influence. But his faith in financial markets’ ability to police themselves became an Achilles’ heel. Former colleagues and Nobel Laureate Milton Friedman hailed Greenspan as the greatest central banker of all time when he finished 18½ years as Federal Reserve chairman in 2006.  Just two years later, the financial crisis triggered an austere reappraisal of his record. His view that markets could effectively police themselves became a driving force of regulatory policy in the 1990s and early 2000s. His perceived inclination to stem market panic earned a moniker, the “Greenspan put”—as if the Fed itself was a put option that insured investors against losses.  The Fed cushioned markets after the stock-market crash of 1987 and the 1998 failure of Long-Term Capital Management and played a key role arranging a bailout that followed the Mexican debt crisis of 1994. Greenspan del...

  https://www.ekonomifakta.se/sakomraden/makroekonomi/inflation-och-styrrantor/styrrantan_1208883.html

So much has changed, and there are so many uncertainties, from the financial (what’s going on with tech stocks?) to the cosmic (what will the new economic world order look like?). To make matters worse, there is no haven — not gold, not crypto, not even US Treasuries. https://englundmacro.blogspot.com/2025/04/us-bonds-have-never-been-risk-free.html There is a way to manage this environment: Embrace Finance 101.  Recall the basics you learned in financial literacy class in high school, or in that one finance course you took in college, or while getting your MBA, or just from reading the classics on investing. Everything you need to know to manage this market environment is contained in a few nuggets of wisdom. Markets are efficient after all. This does not mean that prices are always “correct,” just that they generally reflect the available information.  Diversify. The so-called Magnificent 7’s growth has been so spectacular they dominate the S&P, and their performance seem...

The Global Financial Crisis of 2008 and Its Aftermath Great Moderation. However, calm never lasts. In 2008 the United States and the world economy as a whole were wracked by the global financial crisis.  The Fed’s response to that crisis was deeply controversial, with harsh criticism coming especially from the political right. The turning of the political wheel has now put the people who were proved wrong about monetary policy in charge of Trump administration policy.  When that bubble deflated, starting in 2005, the economic consequences were severe. Real estate is a very big sector: The plunge in housing prices when the bubble burst wiped out wealth equal to 40 percent of GDP, the equivalent of $12 trillion today.  The plunge in home construction slashed total spending by more than 4 percent, the equivalent of a trillion-dollar plus hit today. The housing bubble was financed in large part by loans from “shadow banks”.  RE: Shadow Banks https://englundmacro.blo...

Fed chair pick Kevin Warsh spent over a decade working for Stanley Druckenmiller, who also mentored Scott Bessent, the Treasury Secretary. Wall Street Journal Feb. 2, 2026 https://www.wsj.com/economy/central-banking/what-kevin-warsh-learned-working-for-stanley-druckenmiller-7fc07efe Stanley Druckenmiller, the former hedge fund manager, issued a warning at the annual Ira Sohn conference on Wednesday that the Federal Reserve’s low-rate policy is creating vast long-run risks for the US economy. He said Fed policymakers are “raising the odds of the economic tail risk they are trying to avoid”, such as  spurring credit bubbles, by keeping interest rates near historic lows. Alarm bells ring over negative interest rates https://englundmacro.blogspot.com/2016/05/alarm-bells-ring-over-negative-interest.html

The argument for a casino economy is — well, just look around.  First there is AI, which like all new technologies creates boom-and-bust cycles that involve overinvestment in the wrong things, overvalued stocks, speculation and, eventually, a crash.  AI may yet transform the economy and enrich humanity, but along the way it will create new financial risks and more than a few bumps. The US is also emerging from a period of very low interest rates, which tend to invite excess speculation.  Low rates contributed to the opaque risks brewing in private credit, for example. And there is no denying that there are some odd things going on with assets with questionable value, such as crypto, meme stocks and gold, not to mention the widespread betting on sports and political events. The argument against is more subtle. Can the same generation that was raised by helicopter parents really be turning the US economy into a casino? One theory is that too many “good” risks — such as gett...

Se och lär av Kristdemokraterna https://www.svd.se/a/q6V3eE/se-och-lar-av-ebba-busch-och-kristdemokraterna RE: Men hon är totalt skamlös - Kristdemokraterna vill ge friheten tillbaka till de som byggt och bygger vårt land, till de som har betalat skatt hela sina liv. Att sälja sitt hem utan att staten tar sin beskärda del av livsverket är inte en lyxgåva, som reavinstskattens försvarare målar ut det som.  Det är inte den lyckliga vinnaren eller miljonärer på villagatan som drabbas hårdast av skatten på bostadsförsäljning. Det är din mamma, pappa och grannar: vanliga löntagare och pensionärer som gjort precis det samhället alltid uppmanat dem till: att arbeta hårt, spara, ta ansvar och bygga ett tryggt hem. Larry Söder (KD), bostadspolitisk talesperson Hans Eklind (KD), ekonomiskpolitisk talesperson DI 8 januari 2026 https://www.di.se/debatt/den-omoraliska-reavinstskatten/ KD räknar med att skattesänkningen skulle kosta 12-15 miljarder per år i förlorade intäkter för staten. – Det ä...

För tio år sedan inleddes en unik period i ekonomin. Minusräntor gjorde det billigare än någonsin tidigare att låna pengar.  Nu är den tiden förbi. Vad blir konsekvenserna av det? Här kan du läsa alla delar i DN:s artikelserie. https://www.dn.se/om/tio-ar-efter-minusrantan/ Som mest lånade svenskarna 30 miljarder kronor till sina bostadsköp – per månad. Annika Winsth är chefsekonom på Nordea. – Jag fick nästan ont i magen när de där siffrorna kom varje månad, säger hon. DN 9 november 2025 https://www.dn.se/ekonomi/baksmallan-efter-bostadsboomen-vi-ska-inte-tillbaka-till-dar-vi-var/ RE: Man får väl förmoda att Annika Winsth slog larm om detta och krävde högre räntor? It had been a mistake for the central bank to keep rates so low for so long following the 2008 financial crisis. Nobel-prize winning economist Joseph Stiglitz says. 6 September 2024 Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitike...

The Fed expanded its enormous portfolio—sometimes called a balance sheet—during the 2007-09 financial crisis  and again during the pandemic when it bought colossal quantities of government debt and mortgage-backed securities to stabilize markets and stimulate the economy. Officials have been gradually shrinking the balance sheet since 2022, when it reached nearly $9 trillion, by letting securities mature without replacing them.  Fed officials don’t want the balance sheet to be so big because supplying trillions of dollars of interest-bearing reserves to the banking system carries political costs,  such as paying large amounts of interest to banks. When the Fed purchases securities, it creates reserves—electronic cash that banks hold at the central bank.  When the securities mature, that electronic money drains out of the financial system. Nick Timiraos WSJ Oct. 28, 2025 https://www.wsj.com/economy/central-banking/the-feds-6-6-trillion-test-when-to-end-its-portfolio-r...

Trots handelskrig och införda tullar råder återigen börsyra. För ett knappt år sedan publicerade SVT dokumentären Skuldfeber, där experimentet med låga räntor pekades ut som förklaringen till klyftor i samhället på grund av ökade tillgångsvärden, spekulativa bubblor och ohämmad riskvilja. Frågan är om inte den parallellen varit överdriven.  Nuvarande ränteläge och riskvilja, samt även det som sågs under exempelvis it-bubblan kring millennieskiftet, antyder att det kan vara en alldeles för förenklad bild av verkligheten.  Det är uppenbart att människor kan vara vänligt inställda till att ta spekulativa risker nästan oavsett ränteläge. Och att tillgångar kan öka snabbt i värde.  Förklaringen till ökad riskvilja kan lika väl vara att människors omdöme försämras av att se sin omgivning tjäna pengar.  Det skulle i sådant fall kunna förklara varför nollräntepolitiken nu dött ut som diskussionsämne. Och varför centralbankskritiker inte är en lika populär hållning längre. Mi...

  Under 10 års tid var det nästan gratis att låna  Under 10 års tid var det nästan gratis att låna i Sverige; Stefan Ingves Prisnivån Price Level talas det inte mycket om.  De flesta kommenterar om KPI/CPI stigit med 0,2 eller 0,3 https://englundmacro.blogspot.com/2024/05/prisnivan-price-level-talas-det-inte.html Fram till ungefär år 2000 var det en etablerad sanning att den som sparar sina pengar har mer att handla för om 20 år. Ibland väldigt mycket mer. Två procents real ränta ger på 36 år en fördubbling av sparkapitalet i reala termer. Men mellan 2000 och 2025 blev den etablerade sanningen att den som lånar har mer att spendera om 25 år. Väldigt mycket mer, fastighetspriserna i Stockholm steg med 400 procent. Kostnaden för att låna var stundtals 1,3 procent. Nollräntan var en anomali. Mattias Lundbäck på Fb 3 juli 2025 https://www.ekonomism.us/ Anomali – Wikipedia What Is Zero Interest-Rate Policy (ZIRP)?  How It Works and Goals https://www.investopedia.com/artic...

SNB President Martin Schlegel has said that negative borrowing costs — which were in place from 2015 to 2022 — are an option, although “no one likes” them.  OBS 2007 GFC The Global Financial Crisis https://www.rba.gov.au/education/resources/explainers/the-global-financial-crisis.html When the global financial system suddenly collapsed in 2008... https://englundmacro.blogspot.com/2024/11/when-global-financial-system-suddenly.html It’s absolutely astonishing this NIRP — negative interest-rate policy  — in Europe, and Japan, and Switzerland.  And ZIRP [zero-interest rate policy] for, what, 10 years, in the U.S.? It’s crazy.” https://englundmacro.blogspot.com/2025/02/it-has-been-long-time.html The euro has gained more than 10% against the dollar this year, rising to around $1.14 putting its currency-sensitive export machine under further stress even before the tariffs wars have played out.  It’s not as rampant as the indomitable Swiss franc, but further gains are likely ...

Democrats need to accept limits on the welfare state.  The great thing about near-zero rates, for individuals as well as governments, is that they create the illusion you can spend as much as you like without facing any trade-offs — after all, borrowing seems free.  Some economists even argued as much, and politicians, who never need an excuse to spend, were happy to follow their advice. Allison Schrager Bloomberg 4 June 2025 https://www.bloomberg.com/opinion/articles/2025-06-04/america-s-debt-crisis-both-parties-need-to-face-fiscal-reality  

  Källa: Mattias Lundbäck Facebook Mattias Rubenson  Jag tycker det ser ut som att accelerationen av nedgångens hastighet är ungefär konstant?  Och den riktigt branta kurvan nedåt inleds väl snarare 2018 än 2020? Mattias Lundbäck  Allt talar för att systemet gick sönder redan 2010 eller så. Mattias Lundbäck  (Den hälsosamme ekonomisten) https://www.ekonomism.us/ America’s budget is already in an awful state;  must roll over debt worth nearly $9trn  (30% of GDP). https://englundmacro.blogspot.com/2025/04/americas-budget-is-already-in-awful.html Excess demand triggered by the fiscal and monetary response to the pandemic merely exacerbated imbalances created by the policy response to the global financial crisis (GFC) of 2008-10. Did they really think there would be no financial consequences to keeping interest rates at or near zero for more than a decade?  https://englundmacro.blogspot.com/2023/08/major-central-banks-balance-sheets-have.html Tillbaka...

 since investors had to deal with a full-blown disruption on par with what was seen during the 2008 financial crisis, or the bear market that walloped stocks in 1973 and 1974. Stagflation In Singer’s opinion, that is breeding a dangerous sense of complacency, inspired by the conviction that the government, or the Federal Reserve, will always come running to the rescue. “The state of stock markets today are just about as risky as I have ever seen.  Leverage is building and building, risk-taking is building and those statements apply also to governments.  It’s absolutely astonishing this NIRP — negative interest-rate policy — in Europe, and Japan, and Switzerland.  And ZIRP [zero-interest rate policy] for, what, 10 years, in the U.S.?  It’s crazy.” Paul Singer, 80, founder and co-CEO of hedge-fund giant Elliott Investment Management fund.  By Joseph Adinolfi MarketWatch 26 February 2025 https://www.marketwatch.com/story/elliotts-paul-singer-gives-rare-intervi...

  Men 2022 tog experimentet med de historiskt låga räntorna plötsligt slut. För miljontals svenskar blev det en påminnelse om Riksbankens makt över vår ekonomi. Vilken roll spelar egentligen Riksbanken i samhällsutvecklingen, och vilka konsekvenser har de låga räntorna fått? Stefan Ingves var Riksbankens chef i många år. Ett filmteam följde honom under hans sista, dramatiska tjänsteår. https://www.svtplay.se/video/KZm2m6v/skuldfeber Stefan Ingves; världen ändrar sig hela tiden och då får man försöka förstå världen så gott det går; The Great Moderation DI 4 maj 2021 https://englundmacro.blogspot.com/2021/05/stefan-ingves-varlden-andrar-sig-hela.html Stefan Ingves: "Enligt vår uppfattning stod det finansiella systemet i Sverige inför en kollaps den 24 september 1992." https://www.internetional.se/9803ingv.htm - Den stora risken var att Grekland skulle utlösa en kris i italienska, franska och tyska banker. Nu finns i praktiken en EU-garanti för de utestående grekiska statsobliga...

Sheila Bair (Chair) Joyce Chang, Charles Goodhart, Lawrence Goodman, Barbara G. Novick, and Richard L. Sandor October 16, 2023 https://www.centerforfinancialstability.org/research/CFSMonPaper101623.pdf