Englund

 

 falls to new low for the year, off nearly 35% from recent high More than $1.1 billion of fund flows have left Ark Innovation this month. Ark Invest — including its five core ETFs — has lost about nearly $2 billion in investor dollars in MayCNBC 10 May 2021 CNBC 10 May 2021 https://www.cnbc.com/2021/05/10/cathie-woods-ark-innovation-etf-falls-to-new-low-for-the-year.html  

‘I have no doubt, none whatsoever, that we are in a raging mania in all assets.  I also have no doubt that I don’t have a clue when that’s going to end.’ — Stanley Druckenmiller MarketWatch 11 May 2021 https://www.marketwatch.com/story/druckenmiller-still-long-the-stock-market-but-sees-raging-mania-in-all-assets-11620744622 The consumer price index soared 0.8% in April to match the biggest monthly increase since 2009, the government said Wednesday.  Economists polled by Dow Jones and The Wall Street Journal had forecast a milder 0.2% advance. MarketWatch 12 May 2021 https://www.marketwatch.com/story/u-s-inflation-climbs-in-april-to-the-highest-level-in-13-years-cpi-shows-11620823628

“Should risk appetite decline from elevated levels, a range of asset prices could be vulnerable to large and sudden declines, which can lead to broader stress to the financial system,”  the central bank said in its semiannual Financial Stability Report WSJ 6 May 2021 https://www.wsj.com/articles/covid-19-still-among-major-risks-to-financial-stability-fed-says-11620331219 Financial Stability Report https://www.federalreserve.gov/publications/files/financial-stability-report-20210506.pdf

Fed policy has enabled financial-market excesses.  Today’s high stock-market valuations, the crypto craze, and the frenzy over special-purpose acquisition companies, or SPACs, are just a few examples of the response to the Fed’s aggressive policies Christian Broda and Stanley Druckenmiller WSJ May 10, 2021 https://www.wsj.com/articles/the-fed-is-playing-with-fire-11620684980 SPACs, also known as blank-check companies, have issued roughly $100 billion of stock this year, a record, to buy private companies and take them public.  https://englundmacro.blogspot.com/2021/04/wesc-fortsatter-rusa-nu-vart-kring.html

US companies announced $484bn in share buybacks in the first four months of this year, the highest such total in at least two decades FT 12 May 2021 https://www.ft.com/content/d7adb226-e9a6-4cd8-9049-35d55c211ca4 The agency problem, originally identified by Adam Smith, whereby agents (executives) managed companies in their own interest rather than that of their principals (shareholders). https://englundmacro.blogspot.com/2020/04/wave-of-corporate-defaults-owes-much-to.html

Unfortunately they are expensive, with 10-year TIPS paying 0.9% below inflation.  Inflation needs to rise at least that much over the decade just to maintain purchasing power. If inflation fears pick up, TIPS prices are likely to rise as more people buy them.  WSJ 11 May 2021 https://www.wsj.com/articles/if-inflation-is-coming-here-is-what-to-do-about-it-11620694235 Inflation might be the way out of the debt crisis For this entire house of cards not to crumble, growth and inflation need to be restored.  https://englundmacro.blogspot.com/2021/04/inflation-might-be-way-out-of-debt_25.html

 It may soon be time to ask whether the US is in the foothills of an inflationary wage-price spiral, compounding the commodity price spiral that has been underway for several months.  One might equally ask whether it is tenable for the US Federal Reserve to keep purchasing $120bn of bonds each month after the output gap has already closed, and at a time when the federal government is running a post-pandemic “war economy” deficit of 13pc of GDP.  The current picture is nothing like the early phase of QE a decade ago when massive monetary expansion was required to offset the contraction of money caused by the banking crisis. Today US banks are again in rude good health and the transmission channels are working. Ambrose Evans-Pritchard Telegraph 11 May 2021 https://www.telegraph.co.uk/business/2021/05/11/fed-qe-really-will-cause-inflation-time/ Kursutvecklingen fram till sommaren avgörs om börsoron även når räntemarknaden.  Om så sker är risken stor att den rekyl vi n...

  Kom ihåg att förra IT-kraschen höll på i nästan tre år - och det tog 15 år för index att återhämta sig https://cornucopia.cornubot.se/2021/05/kom-ihag-att-forra-it-kraschen-holl-pa.html

  – Det har varit väldigt lätt att tjäna pengar på börsen och det senaste året har varit exceptionellt. Men jag är ändå fortsatt positiv till börsen och den kan mycket väl stiga mer, säger Maria Landeborn strateg och sparekonom på Danske Bank. Även Shoka Åhrman, sparekonom på SPP, tror på en stigande aktiekurser framöver. Börsen drivs på av låga räntor, ekonomier som öppnar upp efter coronakrisen och centralbanker som fortsätter med olika stödåtgärder. SvD 11 maj 2021 https://www.svd.se/radet-i-borshysterin-undvik-att-bli-girig

Vid utgången av april uppgick svenskarnas samlade fondförmögenhet till 6 047 miljarder SvD/TT 10 maj 2021 https://www.svd.se/svenskarnas-fondformogenhet-pa-ny-rekordniva

Scotland should agree to take on a share of the UK’s total outstanding national debt, including state and public sector pensions which are often conveniently hidden from the calculations, on a per capita basis.  The SNP would have to stop pretending it could simply use the pound as before. An independent Scotland could, of course, join the euro, or launch its own currency, or shadow sterling. But it couldn’t expect to have any form of quantitative easing in sterling to meet its budget deficits. Matthew Lynn Telegraph 10 May 2021 https://www.telegraph.co.uk/business/2021/05/10/snp-can-have-referendum-agrees-terms-divorce-first/?li_source=LI&li_medium=liftigniter-onward-journey

Motsvarande nästan 50 miljarder kronor på den så kallade eurobondmarknaden, där bolag ger ut obligationer i annan valuta än den inhemska, Nordiska bolag och primärt då svenska stod förra året och hittills i år för ungefär 30 procent av alla fastighetsobligationer på eurobondmarknaden”, säger Philip Asp. DI 10 maj 2021 https://www.di.se/nyheter/svenska-fastighetsbolag-storspelare-pa-obligationsmarknaden/ Erik Thedéen, Finansinspektionrn: Den kommersiella fastighetssektorn – nya sårbarheter kräver handling Fi 2021-05-07  https://www.fi.se/sv/publicerat/tal-och-debatt/2021/erik-thedeen-den-kommersiella-fastighetssektorn--nya-sarbarheter-kraver-handling/ Erik Thedéen: Den svenska marknaden för företagsobligationer måste bli bättre på att bära och omfördela risk. https://www.fi.se/sv/publicerat/tal-och-debatt/2021/erik-thedeen-sverige-behover-en-battre-marknad-for-foretagsobligationer/ Utlandslån https://englundmacro.blogspot.com/search?q=utlandslån Bankernas utlandslån https://www.inte...

Will the surge in consumer prices this year be a temporary blip or the start of a much more prolonged period of higher inflation? That is the debate raging on Wall Street — and among Washington policymakers  FT 10 May 2021 https://www.ft.com/content/18b0e560-01ab-42fc-ab3e-b0287065d840 Five-year "breakevens" measuring inflation expectations have jumped to 2.71pc, the highest since the pre-Lehman boom. Yet the Fed is continuing to buy $120bn of bonds each month https://englundmacro.blogspot.com/2021/05/five-year-breakevens-measuring.html

Dick Harrison skriver i dag den 9 maj i SvD En avgörande kursändring kom på våren 1981. Överenskommelsen nåddes på natten till den 24 april, som raskt döptes till ”Den underbara natten”. Moderaternas partiledare, tillika ekonomiminister, Gösta Bohman valde att hoppa av från regeringen  Men inget av detta förklarar hur de båda andra borgerliga partierna kunde förhandla fram ett avtal med den socialistiska huvudfienden över huvudet på sin ekonomiminister och därmed lägga grunden till den egna regeringens fall. https://www.svd.se/heliga-kor-sallsynta-i-svensk-politik Ola Ullsten blev regeringschef sen Thorbjörn Fälldin efter två år lämnade den borgerliga trepartiregeringen. De flesta (RE: Däribland Carl Bildt, som jag vill minnas hade ätit middag med Carl Tham). räknade nog med att de två återstående regeringspartierna – Moderaterna och Folkpartiet – skulle bilda regering tillsammans.  Men Ola Ullsten ville inte regera med moderatledaren. Och tack vare att Socialdemokraterna la n...

I dag, den 9 maj, inleds också den stora europeiska framtidskonferensen.  Framtidskonferenser kan man med fog vara rätt kritisk mot, för trots storstilade ord om medborgardeltagande och att nå ut till ”den tysta majoriteten” blir det lätt flummigt och ett forum för redan invigda. Lisa Irenius SvD 9 maj 2021 https://www.svd.se/skandalen-sager-nagot-viktigt-om-vilka-vi-ar College of Europe, en europeisk masterutbildning som jag / Lisa Irenius/  gick i början av 2000-talet. Det meddelades att den planerade återträffen skjuts upp ytterligare, som så mycket annat på grund av corona.  Det fick mig att tänka på den återträff jag var på 2015, en lite märklig men intressant tillställning, och som jag då skrev om i SvD. Då var många av mina tidigare kurskamrater, som numera jobbar i Bryssel, desillusionerade vad gäller EU:s framtid, efter flyktingkrisen och eurokrisen.  https://www.svd.se/pa-atertraffen-ar-illusionerna-forlorade EU-fadern Jean Monnet http://www.nejtillemu.com/...

 by escorting a single oil tanker and 13 fast cargo ships through Axis-controlled waters.  On 11 August, the first day of the convoy, when “freak ASDIC [sonar] conditions” enabled a German U-boat with an undistinguished commander to sink the carrier HMS Eagle with 16 Hurricane fighters and 136 men.  Syfret accelerated the westward retreat of the fleet, leaving the surviving merchant ships to continue their journey with a reduced escort of cruisers and destroyers and, crucially, no air cover.  Telegraph 9 May 2021 https://www.telegraph.co.uk/books/what-to-read/churchill-threw-thenavy-malta-1942-worth/ Pedestal on Youtube https://www.youtube.com/watch?v=0inR2jRW_P8 https://www.youtube.com/watch?v=2A6-oon8sGs

Tyskland lyckades således genomföra vad ekonomerna kallar en interndevalvering.  Jag har tidigare på denna blog, Greklands interndevalvering och Ådalshändelserna dömt ut interndevalvering som en möjlig väg ur krisen.  Hur kunde då Tyskland lyckas med det som i dag framstår som omöjligt för länderna i Sydeuropa?   https://englundmacro.blogspot.com/2011/12/wolodarski-och-tysklandss-framgang-med.html

Success of the ‘joke’ currency shows that we shouldn’t take cryptocurrencies too seriously Jemima Kelly 11 May 2021 https://www.ft.com/content/2c3dd96c-b1b1-42fd-ab46-8b4791bf1270 Oh no, now Deloitte with the crypto nonsense By the time we read the introduction, we trusting Alphavillains were feeling downright cynical Now we don’t want to suggest this report has been written by a bunch of crypto bros, but has this report been written by a bunch of crypto bros?  Jemima Kelly FT Alphaville 7 May 2021 https://www.ft.com/content/8d35a908-9d49-4992-9980-54f314bf5193   Jemima writes for FT Alphaville. She was previously a reporter at Reuters, where she mainly wrote about the foreign exchange market, cryptocurrencies and fintech. She has also written for The Economist. Dogecoin really is man’s best friend Remember when people used to analyse markets like they were a Really Serious Thing with serious fundamental factors driving them? Jemima Kelly FT Alphaville 5 May 2021 https://www.f...

Yet the Fed is continuing to buy $120bn of bonds each month. Agustin Carstens, the managing director of the BIS, said: “The households at the lowest end of the income spectrum are the least able to hedge against it: their income is usually fixed in nominal terms and their savings held in cash or bank accounts. The best contribution monetary policy can make to an equitable society is to try to keep the economy on an even keel by fulfilling its mandates of stable prices and sustainable economic activity." Rates may have to go to 3pc, 4pc, or 5pc, and that changes all the assumptions about fiscal sustainability,” said Tim Congdon from the Institute of International Monetary Research. Current equity multiples are a function of near-zero funding costs. As soon as rates rise in earnest - or even threaten to do so - Wall Street will look forbiddingly overvalued. Ambrose Evans-Pritchard Telegraph 7 May 2021 https://www.telegraph.co.uk/business/2021/05/07/us-inflation-fears-mount-fed-monet...