Economische aanraders 19-11-2017
Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 10 belangrijke of informatieve artikelen en interviews die de voorafgaande 7 dagen op economisch terrein verschenen op onafhankelijke sites.
De kop is de link naar het oorspronkelijke artikel, waarvan de samenvatting of de eerste (twee) alinea’s hier gegeven worden.
Sinds december 2015 nemen we ook een paar extra links op naar artikelen die minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.
Banking on capital – Yener Altunbaş, Simone Manganelli, David Marques-Ibanez
Prudential supervision of banks has increasingly relied on capital requirements. But bank capital played a relatively minor role in predicting bank solvency during the Global Crisis, except for scarcely capitalised banks. This column argues that while capital is a helpful tool to support bank financial stability, it is complex for supervisors to calibrate it precisely. Macroprudential authorities should be able to complement capital-based tools with additional, borrower-based prudential instruments.
***Wall Street Discovers the Brick-and-Mortar Meltdown – Wolf Richter
Finally time to make some easy money by betting on the collapse of brick-and-mortar retail, years after it began? Here’s a grisly thought: As of today, there’s an ETF for that.
The brick-and-mortar retail pain splits two ways: Retailers that have failed to build a vibrant online sales channel and are dependent on their physical stores; and the landlords that lease stores to them.
This ETF focuses on the first, the retailers. The ticker is evocatively named EMTY. As an inverse ETF, it’s supposed to rise in price when the Solactive-ProShares Bricks and Mortar Retail Store Index, which is composed of 56 “traditional” brick-and-mortar retail stocks, declines.
The Fed’s Bubblenomics – Murray Sabrin
[The Following is adapted from a preface to a new report by Murray Sabrin, featured in his November 15 presentation, “Bubblenomics” at Ramapo College.]
If you Google “dot com bubble,” you will get nearly 1.2 million hits, and 3.3 million hits if you Google “tech bubble.” A Google search of “housing bubble” will return nearly 11 million hits. (The searches were conducted on March 29, 2017). And if you search Amazon books for financial crisis 2008 you will get more than 1200 hits.
Given all the books, monographs, essays, articles, and editorials that have been written about back-to-back bubbles that occurred within two decades, one would think there would be nothing else to write about.
Scientists: Population Growth “Primary Driver Behind Ecological and Societal Threats” – Leith van Onselen
15,364 scientists from 180 countries have put their names to a BioScience journal article calling for population growth to be limited, and governments to stop only focusing on economic growth. According to the ABC article attached to the report, “the number is believed to be the largest group of scientists to have ever put their names to a research paper focused on climate change”. Below are some key extracts from the journal article:
Twenty-five years ago, the Union of Concerned Scientists and more than 1700 independent scientists, including the majority of living Nobel laureates in the sciences, penned the 1992 “World Scientists’ Warning to Humanity” (see supplemental file S1). These concerned professionals called on humankind to curtail environmental destruction and cautioned that “a great change in our stewardship of the Earth and the life on it is required, if vast human misery is to be avoided.” In their manifesto, they showed that humans were on a collision course with the natural world…
The authors of the 1992 declaration feared that humanity was pushing Earth’s ecosystems beyond their capacities to support the web of life. They described how we are fast approaching many of the limits of what the biosphere can tolerate without substantial and irreversible harm. The scientists pleaded that we stabilize the human population, describing how our large numbers—swelled by another 2 billion people since 1992, a 35 percent increase—exert stresses on Earth that can overwhelm other efforts to realize a sustainable future…
Since 1992, with the exception of stabilizing the stratospheric ozone layer, humanity has failed to make sufficient progress in generally solving these foreseen environmental challenges, and alarmingly, most of them are getting far worse…
Why Core Inflation is Rising & What it Means for Fed Rate Hikes – Wolf Richter
Yellen was right to brush off “transitory” factors of “low” inflation.
Consumer prices, as measured by CPI for October, rose 2.0% year-over-year. A month ago, CPI increased 2.2%. The Fed’s inflation target is 2%, but it doesn’t use CPI, or even “Core CPI” – which excludes the volatile food and energy items. It uses “Core PCE,” which usually runs lower than CPI, and if there were an accepted measure that shows even less inflation, it would use that. But it does look at CPI, and there was nothing in today’s data to stop the Fed from raising its target rate in December.
The Core CPI rose 1.8%, up a tad from September’s 1.7% increase. Core CPI has been above 2% for all of 2016 and through March 2017. In the history of the data going back to the 1960s, Core CPI had never experienced “deflation.” But when Core CPI rates retreated in the spring through August, along with other inflation measures, a sort of panic broke out in the media:
Golden Catalysts – Jim Rickards
The physical fundamentals are stronger than ever for gold. Russia and China continue to be huge buyers. China bans export of its 450 tons per year of physical production.
Gold refiners are working around the clock and cannot meet demand. Gold refiners are also having difficulty finding gold to refine as mining output, official bullion sales and scrap inflows all remain weak.
Private bullion continues to migrate from bank vaults at UBS and Credit Suisse into nonbank vaults at Brinks and Loomis, thus reducing the floating supply available for bank unallocated gold sales.
In other words, the physical supply situation has been tight as a drum.
***Drivers of pension reform measures in the OECD – Roel Beetsma, Ward Romp, Ron van Maurik
Population ageing means that many current pension regimes are unsustainable, but the timing of pension reform measures is a political as well as an economic decision. This column uses new data on OECD pension reforms since 1970 to show that their timing has not been driven by projected demographic developments or political change, but by the state of the economy at the time when reforms were legislated. Pension systems have expanded more frequently during booms, and have contracted during economic downturns.
Capitalism and Competition – Richard M. Ebeling
Market competition is at the heart of the capitalist system. It serves as the driving force for creative innovation, the mechanism by which market supplies and demands are brought into coordinated balance for multitudes of goods, and an institutional setting for individuals to freely find their own place to best earn a living in society.
US to Import Inflation from Japan, China, South Korea – Wolf Richter
Even from Japan – whose export producer prices are soaring.
The oil price collapse that started in 2014 pushed down input costs that companies – the “producers” – faced. And producer price indices, which measure inflation further up the pipeline, plunged. But this is over. And the biggest export powerhouses in Asia that have ballooning trade surpluses with the US, show how.
***The Superhero Complex: Are We Incapable of Saving Ourselves? – Charles Hugh Smith
If we felt empowered in daily life, would we be so enamored of superheroes constantly saving our world from destruction?
It’s been widely noted that the U.S. film industry ably functions as a pro-global hegemony propaganda machine: even when the plot features evil rogue elements at work in a global-hegemony agency (Pentagon, CIA, NSA, etc.), the competence of the agency is never in doubt, nor is the agency’s ability to rid itself of the evil rogue element.
Evil conspiracies are revealed and the Good Guys/Gals win.
***Assessing the incidence of value-added taxes – Youssef Benzarti, Dorian Carloni
In the wake of the Global Crisis, some governments sought to stimulate demand through VAT cuts. This column assesses the success of these measures by investigating who benefited from a VAT cut on sit-down restaurant meals in France. The results show that restaurant owners captured the lions’ share of the tax cut, while employees and consumers benefited substantially less. Further, following subsequent tax increases, restaurant owners increased their prices by four to five times more than they had decreased their prices following the original cut.
***We’re Living in the Age of Capital Consumption – Ronald-Peter Stöferle
When capital is mentioned in the present-day political debate, the term is usually subject to a rather one-dimensional interpretation: Whether capital saved by citizens, the question of capital reserves held by pension funds, the start-up capital of young entrepreneurs or capital gains taxes on investments are discussed – in all these cases capital is equivalent to “money.” Yet capital is distinct from money, it is a largely irreversible, definite structure, composed of heterogeneous elements which can be (loosely) described as goods, knowledge, context, human beings, talents and experience. Money is “only” the simplifying aid that enables us to record the incredibly complex heterogeneous capital structure in a uniform manner. It serves as a basis for assessing the value of these diverse forms of capital.
Venture capital networks: An analysis using the exponential random graph model – Sadamori Koujaku, Daisuke Miyakawa
Venture capital firms use a variety of accumulated resources to inform their investment activities, but do the rely solely on their own resources or do they employ other firms’ resources to complement their own? This column examines the pattern of co-investments among venture capital firms and discusses the economic implications. Past experience of co-investments increases the likelihood of future co-investments among firms when the returns from these past co-investments were high, and also when the jointly invested venture business companies experienced greater growth after an IPO.
The Junkie Market, i.e., Lots Of Highs & Lows, Is Back – Dana Lyons
The past few days have seen a reversal from substantial net New lows to substantial net New highs – a condition that has preceded poor performance in the past.
We’ve posted several pieces in the past regarding what we’ve termed “Junkie Markets” – junctures characterized by a substantial number of both New 52-Week Highs and New 52-Week Lows. Such conditions represent a key component of various and notorious market warning signals, such as the Hindenburg Omen and others. As the ominous sounding names would imply, the historical stock market performance following such signals has been poor. We have found the same to be true with respect to our “Junkie Markets”. Today’s Chart Of The Day deals with a new variation of the Junkie Market.
Disclaimer: De VoL-redactie selecteert deze artikelen op interessante inzichten, of naar wij denken nuttige informatie. Wij kunnen echter geen enkele aansprakelijkheid aanvaarden voor de gevolgen van beslissingen die op grond hiervan door lezers zijn genomen, zakelijk zomin als privé.
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