Englund

 

 One issue for workers in big cities is time spent in transit. New York, Washington, D.C., San Francisco and Chicago have some of the nation’s longest commute times—as well as some of the lowest return-to-office rates. Nearly two out of every three workers whose jobs can be done remotely prefer a mix of remote and in-person work “Why should I go into work when half the people I need are going to be at home on any given day?” WSJ 7 July 2022 https://www.wsj.com/articles/office-remote-work-new-york-11657130765

ECB Governing Council approved the Transmission Protection Instrument (TPI) ECB 21 July 2022 https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220721~973e6e7273.en.html The TPI — which could be nicknamed ‘To Protect Italy’ —  will be unlimited in size and depend in scale on severity of risks. But the euro markets remain unconvinced, seeing this as a shaky compromise.  Defining such issues as the sustainability of a country's debt is a highly contentious issue, something German Bundesbank chief Joachim Nagel highlighted rather pointedly earlier this month. Marcus Ashworth Bloomberg 21 juli 2022 https://www.bloomberg.com/opinion/articles/2022-07-21/ecb-s-crisis-plan-fails-to-convince-bond-traders ECB is belatedly making more use of its neglected secondary mandate.  That mandate is often forgotten or outright denied.  But subject to stabilising prices, the central bank is legally obliged by the EU treaties to support the bloc’s general economic policies.  Mar...

 Prime-age employment slumped in the aftermath of the crisis, which was understandable, but what’s really striking is how long it stayed depressed — almost to the end of the 2010s. There was no good reason that far more Americans couldn’t have been employed during that period. After all, inflation stayed low even when employment finally got back to pre-crisis levels.  So that long era of depressed employment was pure loss, representing vast waste: millions of workers who could have been employed but weren’t, hundreds of billions of dollars’ worth of goods and services America could have produced but didn’t. Paul Krugman NYT 19 July 2022 Opinion | Inflation: A Revolution of Falling Expectations - The New York Times (nytimes.com)

Vad härligt det vore om Liran och Drachman fanns kvar.  Vem skulle då behöva bry sig om dessa valutor steg eller sjönk? Det finns ett känt citat av President Nixon som jag minns som "I don´t give a damn about the Lira". Men det finns tydligen olika versioner om vad som sades i Det Ovala Rummet. H. R. Haldeman: [Federal Reserve Board Chairman Arthur F.] Burns is concerned about speculation about the lira. President Nixon:  Well, I don't give a (expletive deleted) about the lira. - President Richard M. Nixon on being asked by H. R. Haldeman if he wanted to hear a report on the decline of the Italian lira. - I don't give a shit about the Italian lira. https://englundmacro.blogspot.com/2011/06/usas-president-och-alla-vi-andra-borde.html

Enligt amorteringsreglerna är det belåningsgraden som styr hur många procent som ska amorteras av det totala lånet varje år.  Är belåningsgraden över 50 procent, och högst 70 procent, ska låntagaren amortera 1 procent per år på lånebeloppet.  Är belåningsgraden istället över 70 procent ska man amortera 2 procent per år på lånebeloppet. SvD 21 juli 2022 Prisfallet: Bostaden slut som bankomat | SvD Fin kattbild hos SvD Frida Bratt tror att prisfallet kan upphöra redan till hösten   ”Jag tror att fallet kommer stanna upp när det visar sig att räntorna inte kommer bli så väldigt höga. Jag tror att Riksbanken kommer fortsätta höja i år, vilket får både en direkt effekt och en stor psykologisk effekt när man blir orolig och det pratas mycket om det. Men jag tror att det kommer bli svårt för Riksbanken att höja styrräntan med mer än två procent”, säger hon   ”När det börjar sjunka in hos hushållen att räntorna kanske kommer bli omkring 3 procent snarare än 6-7 procent ...

Translation by Google Ju mer aggressivt ECB väljer att höja desto större blir oron över den italienska ekonomin, så italienska räntor stiger med ännu mer, vilket tar spreaden ännu högre. Italiensk politisk dramatik på tröskeln till ett räntebeslut är alltså en så ovälkommen utveckling som bankpresident Christine Lagarde och hennes kollegor kan tänka sig. ECB måste ta fram bra och övertygande detaljer om hur den kan förhindra att denna spridning ökar ytterligare. Europas banker har varit mycket svagare än de amerikanska ända sedan den globala finanskrisen. Utöver allt detta vill ECB börja dra tillbaka sitt stöd till banksystemet genom "TLTRO"-lånen (riktade långfristiga refinansieringstransaktioner) Original The more aggressively the ECB chooses to hike, the greater the concerns over the Italian economy, so Italian yields rise by even more, taking the spread even higher.  Italian political drama on the eve of a rate decision is thus as unwelcome a development as bank President...

 

 as members of his national unity government walked out of parliament ahead of a vote of confidence in his leadership. Matteo Salvini’s rightwing League, Silvio Berlusconi’s Forza Italia and the populist Five Star Movement said they would boycott the vote, saying Draghi had failed to give the Italian public adequate answers to pressing questions. Draghi is expected to submit his resignation again to President Sergio Mattarella FT Wednesday 20 July 2022 https://www.ft.com/content/955dbb5d-fa23-479c-85e4-9010b73a2cdf Den svaga offentliga makten utövas av en politisk elit som ogenerat skaffat sig väldiga materiella förmåner. Denna elit, som ofta kallas ”kasten” göder en generell misstro mot makthavarna.  Ur den föds populismen som både till vänster och till höger undergräver de traditionella politiska partiernas trovärdighet. Om Draghi skulle lämna nu finns det ingen självklar ersättare i sikte. Då blir den italienska samhällskrisen riktigt akut, både för Italien och för Europa. ...

 Även Romano Prodis två perioder som regeringschef slutade i obetydliga resultat. Han stupade i första hand på att de koalitioner han ledde mest bestod av en samling småpartier. Ett tag hade han elva partier i regeringen och det förlamade till och med de skarpaste teknokratiska reformförsöken. Den svaga offentliga makten utövas av en politisk elit som ogenerat skaffat sig väldiga materiella förmåner. Denna elit, som ofta kallas ”kasten” göder en generell misstro mot makthavarna.  Ur den föds populismen som både till vänster och till höger undergräver de traditionella politiska partiernas trovärdighet. Om Draghi skulle lämna nu finns det ingen självklar ersättare i sikte. Då blir den italienska samhällskrisen riktigt akut, både för Italien och för Europa. Rolf Gustavsson SvD 20 juli 2022 https://www.svd.se/a/nW8ARm/kaoset-gor-italien-omojligt-att-reformera Prodi: It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be cr...

 For European Central Bank officials devising a crisis tool that will be credible enough to keep the euro together, the biggest challenge may be to get it past the lawyers. The challenge is to ensure any plan conforms to the ECB’s mandate of delivering price stability and doesn’t directly finance governments.  That means a decision, on when and under what circumstances it can buy bonds, needs to be matched by safeguards and conditions countries must fulfill in exchange. Bloomberg 20 July 2022 https://www.bloomberg.com/news/articles/2022-07-20/ecb-aims-for-bulletproof-crisis-tool-anticipating-legal-showdown Member states should stop deferring deeply political issues around sovereign debt to the central bank  It is pushing the central bank into murky political territory, risking its credibility and may result in another lost decade marked by under-investment, stagnation and growing economic divergence between member states. Philippa Sigl-GlöcknerFT 20 July 2022 https://www....

 

 Kohn said, “Most of this distortion is deliberate and a desirable effect of the stance of policy. We have attempted to lower interest rates below long-​term equilibrium rates and to boost asset prices in order to stimulate demand.” Both Greenspan and Bernanke were in the room when Kohn said this. The record shows neither expressed any reservations. Kohn himself called the distortion “desirable.”  So, by 2004 the Fed had made a full transition. Its leaders knew their low interest rates were distorting the economy and they liked it.  Moreover, under Bernanke the Fed made a deliberate decision to ignore asset bubbles until they popped, seeing its job as simply repairing the damage. We continue exploring William Chancellor’s forthcoming book, The Price of Time: The Real Story of Interest. John Mauldin 15 July 2022 https://www.mauldineconomics.com/frontlinethoughts/forgotten-lessons By boosting asset prices, policy makers aimed to buttress elevated debt levels and, via the we...

Able people of sensible views don’t go into politics. The results are all around us. Western democracy has a personnel problem. It has been in the works all century. With a good brain and a plausible manner, it was absurdly easy for David Cameron to become Tory leader within five years of entering parliament in 2001. Janan Ganesh FT 19 July 2022 https://www.ft.com/content/7bf59f37-bcfd-4f0e-82af-06d7f3c17223

 Två kritiska mekanismer som behövs för att hålla euroområdet på vägen är i fara. Utsikten till en hård höger-euroskeptisk allians i Rom - det vill säga återgången till demokrati efter Draghi-illusionen - komplicerar avsevärt Europeiska centralbankens ansträngningar att utarbeta ett alternativt skuldskydd för södra Europa när köpen av QE-obligationer avslutas denna vecka . Det försvårar likaså ansträngningarna från Bryssel att förvandla fonden för pandemiåterhämtning på 800 miljarder euro till en permanent finansiell enhet som kan stödja den monetära unionen. Bedövade investerare har varit villiga att förbise EU:s misslyckande med att leverera den utlovade bankunionen, och dess misslyckande med att ta itu med vare sig "undergångsslingan" mellan suveräna banker eller eurosystemets finanspolitiska inkonsekvens. De har tolererat ett hopp i Italiens skuldkvot till 151 procent Siffrorna inkluderar inte Bank of Italys Target2-skulder inom ECB:s betalningssystem, som har nått rekord...

 In obsessing about how Moscow can be brought to its knees with repeated rounds of sanctions, European leaders have failed to wake up to the severe damage that the Kremlin can inflict on its enemies by weaponising its vast oil and gas reserves.  Uniper, Europe’s largest importer of Russian gas admitting at the end of last week that it could be bankrupt “within days” Ultimately, nationalisation beckons with a rescue package of around €10bn touted.  Uniper will be a fascinating test case of continental unity as a row breaks out about who should pick up the tab.  The company is 78pc-owned by Finland’s state-backed nuclear supplier Fortum, so predictably Germany believes that the Finnish state should shoulder some of the costs.  Ben Marlow The Telegraph's Chief City Commentator 19 juli 2022 https://www.telegraph.co.uk/business/2022/07/19/germanys-energy-bailout-little-late-putin-turns-taps/ Nord Stream 1 supplies 58 per cent of Germany’s annual gas needs.  The ...

The Market Reform Debate By Isabella M. Weber China has become deeply integrated into the world economy. Yet, gradual marketization has facilitated the country’s rise without leading to its wholesale assimilation to global neoliberalism.  This book uncovers the fierce contest about economic reforms that shaped China’s path. In the first post-Mao decade, China’s reformers were sharply divided. They agreed that China had to reform its economic system and move toward more marketization—but struggled over how to go about it.  Should China destroy the core of the socialist system through shock therapy, or should it use the institutions of the planned economy as market creators?  With hindsight, the historical record proves the high stakes behind the question: China embarked on an economic expansion commonly described as unprecedented in scope and pace, whereas Russia’s economy collapsed under shock therapy https://www.routledge.com/How-China-Escaped-Shock-Therapy-The-Market-Re...

 Gamla pandemibidrag ligger kvar i spargrisen och arbetslösheten är rekordlåg i de flesta länder. Kanske är den tongivande medelklassen vid ganska god vigör. Det finns ju olika anledningar bakom inflationen – en är att efterfrågan överstiger utbudet, vilket antyder att den där depressionen som hushållen ger uttryck för i olika mätningar kanske är något överdriven. Henrik Mitelman DI 18 juli 2022 https://www.di.se/analys/borsens-sorgebarn-kan-overraska-positivt/ Inflationen kan bli riktigt låg redan nästa år Henrik Mitelman DI 30 maj 2022 https://englundmacro.blogspot.com/2022/05/inflationen-kan-bli-riktigt-lag-redan.html

The war is driving up energy and food prices and fuelling political instability, while the risk of a fresh eurozone debt crisis is never far away due to the incomplete nature of its monetary union with different countries having separate budgets and bond markets. FT 19 July 2022 https://www.ft.com/content/2d2faef3-e101-49fa-9d48-e07bae0beab7

The spread between the prospective earnings multiples of the S&P 500 Information Technology Sector and the benchmark S&P 500 started this year at the highest it had been since 2004. A “healthy correction” was in order, and what looks like some seriously unhealthy speculative excess has now been wrung out of the market.  However, it’s worth noting that from the Great Financial Crisis through to about 2018, tech basically traded at the same multiple as the rest of the market.  Tech’s premium could easily fall further from here: John Authers Bloomberg 19 July 2022 https://www.bloomberg.com/opinion/articles/2022-07-19/apple-s-thud-suggests-big-tech-s-pandemic-era-premiums-could-fall-further