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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Japan’s Wild Monetary Experiment Is Far From Over – Brendan Brown
12 april
The leading narrative in the foreign exchange markets is told and re-told to explain how the Japanese yen has surged this year despite an ever wilder monetary experiment pursued by the Abe government. The story seems plausible to many, and thus is deeply challenging for the backers of sound money principles. The financial TV commentators tell us that the yen is now the safest of all the safe havens. How can this be so?
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The ECB’s latest gimmick: Cash for loans – Willem Pieter de Groen, Daniel Gros, Diego Valiante
15 april
The ECB recently announced a new monetary operation – targeted longer-term refinancing operations, or TLTRO II – that essentially subsidises bank loans to the real economy. This column argues that this ‘cash for loans’ scheme, which might cost up to €24 billion, is unlikely to affect the real economy greatly. This is because banks can easily window dress their loans to qualify. TLTRO II also tests the limits of the ECB’s mandate by stepping into the fiscal policy space.
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US Commercial Bankruptcies Suddenly Soar – Wolf Richter
11 april
The “end of the credit cycle” is a harmless-sounding moniker for an era when defaults and bankruptcies suddenly re-materialize, as if out of nowhere, and when investors get to eat big losses in what they thought were conservative investments.
It’s when new money for Corporate America gets a little more skittish, and credit just a little tighter – not all at once, but over time. And for over-indebted junk-rated companies, that slight tightening and the accompanying rise in rates at the top triggers liquidity crises, defaults, and bankruptcies at the bottom.
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Towards a theory of shadow money – Daniela Gabor, Jakob Vestergaard
14 april
Struggles over shadow money today echo 19th century struggles over bank deposits.
Money, James Buchan once noted, “is diabolically hard to write about.” It has been described as a promise to pay, a social relation, frozen desire, memory, and fiction. Less daunted, Hyman Minsky was interested by promises of unknown and changing properties. “Shadow” promises would have fascinated him. Indeed, Perry Mehrling, Zoltan Pozsar, and others argue that in shadow banking, money begins where bank deposits end. Their insights are the starting point for the first paper of our Institute for New Economic Thinking project on shadow money. The footprint of shadow money, we argue,* extends well beyond opaque shadow banking, reaching into government bond markets and regulated banks. It radically changes central banking and the state’s relationship to money-issuing institutions.
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Financial cycles, labour misallocation, and economic stagnation – Claudio Borio, Enisse Kharroubi, Christian Upper, Fabrizio Zampolli
14 april
Some analysts claim that secular stagnation is responsible for the disappointing post-crisis economic performance. This column provides a different explanation that points to an unsuspected villain: the misallocation of resources (in our case, labour) during the pre-crisis financial boom and the long shadow it has cast post-crisis. The findings draw on an empirical analysis covering more than 20 advanced economies over 40 years. They add strength to the view that the economy has been struggling with the legacy of a major financial boom and bust that has left long-lasting scars on the economic tissue. They also raise broader questions about the interpretation of hysteresis effects, the need to incorporate credit developments in the measurement of potential output and the design of policy more generally, and the role and effectiveness of monetary policy in the short and long term.
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Four Reasons Why Government Spending Is Even Worse Than Taxes – Ryan McMaken
14 april
Every year around tax time, we’re reminded of the pain of the income tax. We’re reminded not just of the wealth that is taken, but also of all the time and energy that must be expended helping the federal government estimate just how much they should take from us this year.
The income tax is just one part of the equation, though. Payroll taxes, corporate taxes, excise taxes, and tariffs are all federal taxes that all of us pay, whether or not one pays what is called the “income tax.”
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Global Crisis in the US vs the Eurozone: Banks and monetary policy – Alex Cukierman
16 april
Both the US and the Eurozone reacted to the Global Crisis by injecting liquidity and loosening monetary policy. This column argues that despite the similarities in the behaviour of bank credit, the behaviour of bank reserves has been quite different. In particular, while US bank reserves have been on an uninterrupted upward trend since Lehman’s collapse, EZ bank reserves have fluctuated markedly in both directions. At the source, this is due to differences in the liquidity injections procedures between the Eurozone and the Fed.
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A Tale about Taxes – Henry Hazlitt
14 april
The other day I met a friend who is a large stockholder in General Motors, and he told me a story. A few weeks before, his son had used somewhat excessive strength on the mixing valve in his bathroom and broke the handle off. The local plumber couldn’t repair it, so he ordered and installed a new valve. The valve turned out to cost $22.50. The installation, at $4 an hour, brought the total up to $100.
That sounded steep enough; but it was not until my friend had made some mental calculations that he realized how steep it really was. His income falls into the 90 percent tax bracket. So he figured that in order to acquire the $100 with which to pay this plumber’s bill, he had to receive $1,000 in dividends from General Motors. (For the benefit of the non-mathematical, $1,000 in dividends minus $900 in taxes on them leaves $100 to pay a plumber’s bill.)
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Is China’s Economy in even Deeper Trouble than We Think? – Wolf Richter
12 april
Rail freight volumes are an indicator of China’s goods-producing and goods-consuming economy, not just manufacturing, construction, agriculture, and the like, but also consumer goods. Thus they’re also an indication of consumer spending on goods. Alas, rail freight volume is collapsing: the first quarter this year puts volume for the whole year on track to revisit levels not seen since 2007.
While China’s economy was strong, rail freight volumes were soaring. For example, in 2010, when China was pump-priming its economy, rail freight volume jumped 10.8% from a year earlier. In 2011, it rose 6.9%. It had soared 44% from 2005 to 2011! But 2011 was the peak.
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The Root of Rising Inequality: Our “Lawnmower” Economy (hint: we’re the lawn) – Charles Hugh Smith
12 april
This predatory exploitation is only possible if the central bank and state have partnered with financial Elites.
After decades of denial, the mainstream has finally conceded that rising income and wealth inequality is a problem–not just economically, but politically, for as we all know wealth buys political influence/favors, and as we’ll see below, the federal government enables and enforces most of the skims and scams that have made the rich richer and everyone else poorer.
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***The Revolt of the Debt Slaves Has Started – Wolf Richter
15 april
If we could just get consumers to borrow more so that they spend money they don’t have on things they don’t need in order to boost GDP and corporate profits, all would be fine. That’s the current meme among economists.
Since 68.5% of US GDP is related to personal consumption expenditures, boosting consumer spending is seen as crucial. Since wages at the lower 75% are crummy and have not been rising enough to keep up with inflation, the only other way to prod consumers into spending more is to bamboozle them into borrowing more and blowing this moolah instantly.
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Breaking the link between housing cycles, banking crises, and the recession – Avinash Persaud
14 april
Since the breakup of Bretton Woods in the early 1970s, the housing market has been at the centre of the biggest banking crises across the world. This column considers the nexus between housing, banking, and the economy, and how these ties can be broken. It argues for two modest regulatory changes in banking and insurance. These would result in life insurers and pension funds providing mortgage finance, better insulating the economy and homeowners from the housing cycle.
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Metlife – John H.Cochrane
13 april
What does “systemically important” mean? How can an institution, per se, be “systemically important?” The WSJ coverage of Judge Rosemary Collyer’s decision rescinding MetLife’s designation as a “systemically important financial institution:” gives an interesting clue to how our regulators’ thinking is evolving on this issue:
The [Financial Stability Oversight] council argued — bromide alert — that “contagion can result when relatively modest direct, individual losses cause financial institutions with widely dispersed exposures to actively manage their balance sheets in a way that destabilizes markets.”
It’s not a bromide. It is a revealing capsule of how the FSOC headed by Treasury thinks about this issue.
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***Ludwig von Mises’s 9 Best Tax Quotes – Tho Bishop
15 april
In honor of tax day, a look at the best quotes from Ludwig von Mises on taxation:
1. “Some experts have declared that it is necessary to tax the people until it hurts. I disagree with these sadists.”
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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.