Emerging Markets
Fed have caused the short-term dollar funding to rise dramatically . Back to levels not seen since 2008. https://www.zerohedge.com/news/2018-10-30/emerging-markets-face-new-problem-trillions-bonds-mature-and-soon
Inlägg
IBM’s move for Red Hat: Open-source
The true lesson of IBM’s move for Red Hat: Open-source has truly arrived International Business Machines Corp.’s hefty $34 billion deal to buy Red Hat Inc . is the biggest proof yet that the 20-year-old movement of free and open software can lead to a real revenue-generating business, thanks to new advances in technology. https://www.marketwatch.com/story/the-true-lesson-of-ibms-move-for-red-hat-open-source-has-truly-arrived-2018-10-29
Cash is king again
Interest rates on two-year certificates of deposit have just cracked 3% U.S. stocks are at historically elevated levels when compared to, say, the size of the national economy , or the corporate earnings of the past decade . https://www.marketwatch.com/story/cash-is-king-again-but-is-that-also-a-sign-of-an-impending-recession-2018-10-29
Europe Is Too Exposed to Italy to Let It Go
French and German banks have more than $400 billion at stake and would lose big if the country left the currency union. When Greece’s fiscal mismanagement triggered a crisis in 2010, French and German banks were holding about $115 billion in various Greek investments Bloomberg 29 October 2018
NASDAQ 100 was recently up nearly 220%
NASDAQ 100 was recently up nearly 220% in inflation-adjusted terms since the pre-crisis peak in 2007 compared to a mere 2.2% gain in industrial production over the same 11 year period. We are talking apples-to-apples here: Constant dollar stock prices versus real physical output; and also from the prior peak, not the March 2009 stock market bottom. David Stockman 22 October 2018
Paul Volcker is the greatest man I have known.
He is endowed to the highest degree with what the Romans called virtus (virtue): moral courage, integrity, sagacity, prudence and devotion to the service of country. Review by Martin Wolf FT 29 October 2018
At the end of the day, those with the power to set and enforce EU fiscal and monetary rules know full well that the eurozone could not survive a Greek-style crisis in Italy.
It is their responsibility in the months ahead to make sure it doesn’t come to that. Jim O'Neill Project Syndicate 17 October 2018
Quantitative easing is winding down fast. Net QE peaked an annual rate of $2 trillion in 2016. It will be negative by the end of this year.
Ambrose Evans-Pritchard Telegraph 25 October 2018
Last week, I received a poignant invitation: Paul Volcker, the legendary former chairman of the US Federal Reserve, asked me to visit his apartment to discuss his legacy.
Mr Volcker is publishing his memoir. The release of Keeping At It was initially scheduled for late November but the publisher has rushed the date forward to October because the former Fed chair is ill. So the towering figure of finance wanted to share some thoughts — and warnings — to current and future policymakers, politicians, voters and investors. Gillian Tett FT 25 October 2018
Italy The short history of the eurozone has taught us that resistance is futile.
The main instrument of coercion in the eurozone is not its fiscal rules, but the power of the European Central Bank to withdraw funding from national banks. This is not a discretionary power, but one that is automatically triggered once a country‘s sovereign debt loses investment grade status. Wolfgang Münchau FT 28 October 2018
Nils-Eric Sandberg om Åke Ortmark
Hans bästa bok hette Ja-sägarna - Medlöpare och nickedockor kring Gyllenhammar, Karl XII, Kreuger och andra furstar. Jag föreslog honom att komplettera med en bok om nej-sägarna - den skulle ha blivit betydligt tunnare. Nils-Eric Sandberg SvD 28 oktober 2018 Läs om boken här
Turn off the liquidity taps and the ability to believe the impossible evaporates
When money is constantly cheap and available everything seems straightforward. Markets go up whatever happens, leaving investors free to tell any story they like about why. It is easy to believe that tech companies with profits in the low millions are worth many billions. Or, as one fund manager told me last month, that traditional equity valuation methods are no longer the point Merryn Somerset Webb FT 26 October 2018
“Alternative economists are doom and gloomers that have been wrong for 10 years, but a broken clock is still right twice a day…”
I find this disinfo argument somewhat hilarious because of the extraordinary level of dishonesty inherent in it, but I also find it revealing in a way. Brandon Smith via Alt-Market.com 26 October 2018
Martin Wolf: Inaction over climate change is shameful
That is no longer because it is technically impossible. It is because it is politically painful. We are instead set on running an irreversible bet on our ability to manage the consequences of a far bigger rise even than 2C. The scale of the uncertainty is an argument for action, not inaction. Nobody really knows what risks humanity will ultimately find it has run by continuing on its present course. But we do know that our descendants are quite likely to end up on a different planet, with no way back to our own. The bet that our descendants will then cope might be correct. But it might also be disastrously wrong. The sane choice must surely be to preserve the planet we have. Martin Wolf FT 23 October 2018
Soon the casino gamblers will be shocked
With new borrowings of $1.2 trillion by the US Treasury and $600 billion of existing bond sales by the Fed during FY 2019, you have $1.8 trillion of homeless debt slamming hard upon the scales of supply and demand. That this fiscal eruption is not even in today's Wall Street narrative and the QT is completely ignored tells you all you need to know. Soon the casino gamblers will be shocked, blathering that another purported comet from outer space caused interest rates to soar, notwithstanding disappointing "growth". Moreover, once the bond market Armageddon gets cranking, it will way overshoot to the high side (above 4% or even 5% on the 10-year). Thereupon, carry trade speculators will be forced to dump their bonds, triggering massive mutual fund redemptions and the violent unwinding of Wall Street hatched bespoke trades. David Stockman 17 October 2018
FDR’s attempts to revive the economy are viewed as a failure in light of the devastating second depression that occurred in 1937-38.
Instead, the Great Depression finally ended with the explosive growth of military expenditures starting in mid-1940. Capitalism in America: A History, by Alan Greenspan and Adrian Wooldridge FT 16 October 2018
Inflationsmålet. Inflation targeting.
Nackdelarna överväger dock. Bubblor riskerar att uppstå på tillgångsmarknaderna genom den rikliga tillgången på billiga pengar. Obalanser skapas i ekonomin. Den privata skulduppbyggnaden drivs på. Handlingsutrymmet vid en framtida kris krymper. Historien har lärt oss att finansiella kriser kan få förödande effekter på ett lands ekonomi. Anders Palmér, tidigare prognoschef på finansdepartementet och chefstrateg på Första AP-fonden, SvD 14 oktober 2018 There is no time like the present to adopt a monetary target better suited to a world of low interest rates. The Economist 11 October 2018 Ambrose, Wolf och Johan Schück om inflationsmålet
Is i magen
https://www.cnbc.com/2018/10/11/ubschief-economist-this-is-not-the-end-of-the-bull-market.html Wall Street