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 zijn.

Sinds begin 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.

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*** Increasing Price Inflation is Not a Sign of Healthy Recovery, but the Last Stage Before Recession – Eugen von Böhm-Bawerkon
29 februari
In a recent article by Kessler Companies (hat tip Zerohedge) they correctly point out that inflation, as measured by the consumer price index, have a tendency to accelerate as the US economy moves into a recession. Contrary to popular belief, the beginning of a recession is not deflationary but the exact opposite. As can be seen from the chart, consumer prices do indeed move higher into recessions as represented by the shaded areas.
Why? The most obvious explanation is simply that the Federal Reserve is forced to act, as the CPI signal (or more accurately the PCE) trigger rate hikes. This increases borrowing costs and disrupts the established money flow forcing the economic system to reallocate resources accordingly. As households home equity lines dries up, there will be less spending on, say, restaurants which concomitantly changes relative prices – wages for waiters fall relative to other wages – and resources then start to flow into other parts of the economy seeking profits where they are easier to achieve. Needless to say this process takes time and is commonly known as a recession.
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A proposal for ending the privileges for sovereign exposures in banking regulation – Jochen Andritzky, Niklas Gadatsch, Tobias Körner, Alexander Schäfer, Isabel Schnabel
4 maart
The excessive exposure of banks to sovereign debt continues to threaten the stability of the Eurozone. Based on a recent proposal by the German Council of Economic Experts, this column suggests steps towards severing the sovereign-bank nexus. The loss-absorption capacity of banks could be increased through risk-adjusted large exposure limits and risk-adequate capital requirements.
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Regulatory treatment of sovereign debt: Risk weights vs large exposure limits – Peter Goves, Michael Spies, Alessandro Tentori
2 maart
Sovereign risk and its treatment by European banks is a frequently debated topic. In particular, regulators are focusing on zero risk weighting and large exposure limits. This column argues that redesigning the macroprudential framework for sovereign risk management will be a key theme in the years to come. Depending on the exact outcome, the structure of the EZ bond market might look very different from its current shape. This could have far-reaching consequences for both the ECB’s monetary policy strategy and investors alike.
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Corporate Default Rate Jumps Past Lehman Moment – Wolf Richter
2 maart
The US corporate default rate, according to Standard & Poor’s Global Fixed Income Research, soared from 2.8% in January to 3.3% in February, a big jump for just one month, and the highest rate since December 2010, when it was recovering from the Financial Crisis, with QE and ZIRP running at full bore, and with banks and big corporations getting bailed out by the Fed and the Treasury.
And it’s higher than it had been during the early phase of the Financial Crisis in September 2008, when Lehman Brothers filed for bankruptcy, when all heck was breaking lose, when stocks and bonds were plunging, and when the default rate was “only” 2.96%.
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The implications of Brexit for the rest of the EU – Willem Buiter, Ebrahim Rahbari, Christian Schulz
2 maart
Britain will hold a referendum on whether to stay or leave the EU. Current polls point a very close vote. This column argues that Brexit could have serious economic and political consequences for the rest of the EU. The economic and financial frictions could be limited if both parties try to strike an amicable separation agreement. But political considerations, including the desire of the rest of the EU to prevent Brexit emulation, might result in a far more damaging outcome, not just for the UK.
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“Valuations Will Fall Back”: Bank of England Gov. Carney Pooh-Poohs NIRP Miracle – Wolf Richter
28 februari
When the yield of 10-year Japanese government bonds fell below zero, it marked a new milestone in the negative yield absurdity: it pushed the amount of global government debt sporting a negative return for investors to over $7 trillion.
Which means investors buying this government debt are willing to pay the government for the privilege even if that government is fiscally in worse shape than Greece! But “investors” is a funny word these days of central-bank craziness: the entity that buys every Japanese government bond that isn’t nailed down is the Bank of Japan.
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*** China continues to focus on growth not reform – Alicia García-Herrero
4 maart
The central government will hold the National People’s Congress (NPC) meeting on March 5th. All the signs point to more monetary and fiscal stimulus, especially since the G20 gathering in Shanghai. The key is how to use the fiscal stimulus efficiently.
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The Long History of Government Meddling in the American Marketplace – Mike Holly
29 februari
American history is a story of non-stop efforts by governments to intervene in the marketplace through regulations, monopolies, and subsidies. Most surprisingly, these market interventions appear to place a central role in causing economic crises over the years.
Typically, cronyism involves support of politicians in exchange for regulations denying others the freedom to compete with the moneyed interests (e.g., monopolies). Less competition leads to higher costs and lower quality. It reduces economic growth, jobs, wages, innovation, and productivity. Attempts to control economic growth through government spending and/or manipulating interest rates (e.g., stimulate growth with low rates) generally leads to more severe crises.
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“There Is No Clear Way Out” – Richard Koo Says “The Price For QE Has Yet To Be Paid” – Tyler Durden
4 maart
In his latest note tited “The Calm before The Storm”, Nomura’s traditionally downcast Richard Koo is not too excited about the market’s future prospects, in fact quite the opposite and makes the point that since QE was no game changer, not only is there no clear way out, but “the price for QE has yet to be paid.”
What does that mean for risk assets:
Recently, for example, the markets took a tumble when the Fed moved to normalize monetary policy. The US central bank responded by delaying the normalization process, which stabilized the markets, but eventually fears of falling behind the curve on inflation will force it to resume the process. That will lead to renewed market turmoil in a cycle that has the potential to repeat itself endlessly.
I expect this balancing act between the monetary authorities, who want to push ahead with policy normalization, and the markets, which violently reject each such attempt, will persist for an extended period of time, interspersed with periodic lulls like the current one.
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What If There Are No More Googles, Facebooks or AirBnBs? – Charles Hugh Smith
29 februari
The current batch of tech companies claim to be disruptive, but they’re all derivatives of the rare unicorns that scaled globally right out of the gate and now dominate their space–and whatever new spaces attract their fancy.
It’s an article of quasi-religious faith in tech circles that a few of the hundreds of start-ups touting their “disruptive” potential will blossom into super-profitable giants like Google and Facebook, or fast-growing companies like AirBnB that may not yet have profits but which have scaled fast enough to dominate their space–and richly reward early investors.
Two recent Guardian (U.K.) stories on the Digital Gold Rush frenzy in San Francisco and Silicon Valley cite this faith in the inevitability of “the next big (and hugely profitable) thing” as the basic justification for investors and venture capitalists to spread billions of dollars over hundreds of new start-ups–many which started somewhere else in the world but which migrated to the Bay Area to tap the seemingly inexhaustible venture-capital vein of cash.
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Oil Giant Cuts Budget By 80 Percent And Suspends Fracking – Charles Kennedy
28 februari
Whiting Petroleum Corp. (NYSE:WLL), the largest oil producer in North Dakota, has announced that it will suspend all fracking in the state and cut its budget for this year by 80 percent in a move that sent its shares up 9 percent on Wednesday, back down to a record low on Thursday, and $4.02 this morning.
Across the E&P patch, it’s a volatile game of craps right now that has investors torn between responding positively to spending cuts to weather the oil price downturn, and negatively to the notion that all these companies are doing is narrowly avoiding bankruptcy.
As of 1 April, Whiting will halt all fracking and stop completing its wells at 20 Bakken and three Forks sites. By this summer it will cut spending to $160 million for the rest of year to fund maintenance.
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Global imbalance risk and exchange rates – Pasquale Della Corte, Steven Riddiough, Lucio Sarno
29 februari
The world’s savings and investments are imbalanced. While some countries persistently borrow over time, others act like bankers to the world – lending year in and year out. This column argues that these imbalances matter for asset pricing in financial markets, and are key to understanding excess returns in currency markets.
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Tax Wars #1: TTIP’s fiscale gifpil – Christiaan Vos
29 februari
Christiaan Vos volgt voor Follow the Money het BEPS-project van de G20 en de OESO, tegen agressieve belastingplanning door multinationals. De internationale reacties op deze plannen tonen ook een ander probleem: staten die met elkaar vechten om de belastingcentjes van multinationals. Agressieve belastingplanning van multinationals en agressieve belastingconcurrentie tussen staten gaan hand in hand. Een belastingoorlog op meerdere fronten! Staten liggen onder fiscaal vuur van multinationals terwijl ze door andere staten in de flank worden aangevallen, met de EU en de VS als belangrijkste warlords. Wat betekent dit voor burgers in een geglobaliseerde wereld? Kunnen we ons nog wel verdedigen? Vandaag: hoe TTIP een bres kan slaan in de verdediging van de fiscale soevereiniteit.
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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.