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.

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ECB Trapped in its Own “Doom Loop” as Inflation Surges – Don Quijones
16 maart
To the ECB’s barely contained glee, inflation is back, alive, kicking and biting, in the Eurozone. In February, for the first time in four years, the region-wide 12-month inflation rate reached 2%.
Mario Draghi is thrilled to bits. After five years of driving interest rates to ungodly low levels, offering billions of euros of virtually free loans to Europe’s biggest banks, and scooping up tens of billions of euros per month of government and private-sector bonds and stuffing them onto the ECB’s balance sheet, which now holds €3.7 trillion of financial assets, he has finally achieved his dream of stoking official inflation back above 2%.
Now that it’s achieved its inflation mandate, Draghi’s ECB is facing increasing calls to finally begin tempering its monetary stimulus program, with a pre-electoral Germany predictably leading the way.
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Monetary policy credibility and exchange rate pass-through – Yan Carrière-Swallow, Bertrand Gruss, Nicolas Magud, Fabian Valencia
13 maart
The rate at which consumer prices rise following a depreciation of the currency, known as the exchange rate pass-through, has been declining. The column uses a decomposition of exchange rate pass-through into the component that can be attributed to pricing of imported goods at the dock, and the second-round effects on domestically produced goods and services, to show that reductions in second-round effects are largely responsible for the decline in pass-through. Enhanced monetary policy credibility is strongly associated with this reduction.
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How Central Bankers See Themselves – C.Jay Engel
17 maart
ECB Executive Board member Peter Praet recently gave a speech in Brussels. The underlying theme captures the convenient positioning of world central banks. They want to be seen as saviors of collapsing financial markets, but neither the cause of the instability nor the continued struggle for economic growth. From the speech:
Faced with a prolonged crisis, the ECB’s unconventional policy measures have been essential to provide additional accommodation to the economy and prevent a self-sustaining fall in inflation — and they have been a clear success. Easier credit conditions have fed into a domestic demand-led recovery that has spread across countries and sectors. The economic outlook today is now better than it has been for many years.
And yet, as he admits, the ECB has been in crisis mode since 2008. So they want appreciation for bringing forth recovery, but want the world to look elsewhere for the reason why these economies aren’t self-sustainable. He even blames the crisis in the first place, not on central bank activity from 2000–2007 but on the masses themselves!
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The great Chinese inequality turnaround – Ravi Kanbur, Yue Wang, Xiaobo Zhang
15 maart
Sharply increasing inequality became an integral part of the narrative on Chinese development since the beginning of the reform process in 1978. Over the past decade, however, many studies have argued that inequality has been plateauing, or even declining. This column uses several datasets, including household surveys and regional-level government statistics, to show evidence of a mitigation of inequality in the early 21st century, and indeed, declining rates over recent years. Possible drivers of this turnaround are urbanisation, transfer and regulation regimes, and tightening rural labour markets.
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Deepening EU Banking Crisis Meets Euro-TARP and Taxpayers – Don Quijones
17 maart
Events are moving so fast in Europe these days, it’s almost impossible to keep up. While much of the attention is being hogged by political developments, including the election in the Netherlands, Reuters published a report warning that the European banking sector may face even higher bad loan risks if the ECB begins to scale back its monetary stimulus programs, something it has already begun, albeit extremely tentatively.
The total stock of non-performing loans (NPL) in the EU is estimated at over €1 trillion, or 5.4% of total loans, a ratio three times higher than in other major regions of the world.
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Sovereign spreads in the Eurozone on the rise: Redenomination risk versus political risk – Roberto De Santis
16 maart
French sovereign spreads have risen in recent months, coinciding with debate over the euro ahead of the country’s presidential elections in May. Italian sovereign spreads have been rising since the beginning of 2016. This column argues that investors are not pricing a break-up of France from the Eurozone. Most likely, they are pricing the possibility that the newly elected French government will not have enough supremacy to undertake important economic reforms. Market perception of redenomination risk in Italy, on the other hand, is rising slowly.
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The Real Fed Issues – John H. Cochrane
15 maart
The media are usually fixated on the angels on heads of pins question, will she or won’t she raise rates 0.25%? As such Fed discussion misses many of the really important issues. Fed’s Challenge, After Raising Rates, May Be Existential by Eduardo Porter in the New York Times is an excellent counterexample and a nice primer on some of the really big issues facing the Federal Reserve — and the nation — going forward.
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“In the Short Run, It’s Very Difficult to See When to Bail Out” – Wolf Richter
14 maart
The stock market is still flying high. OK, so the Russell 2000, the index of small-cap stocks, dipped into the negative for the year. The Nasdaq is still up 7.5%, the S&P 500 and the DOW about 5%. They’ve been edging down recently. But they’re still hovering near record highs. So why worry? Stocks can only go up. That’s what we’ve learned since 2009.
Robert Shiller, the Nobel Prize winner who correctly turned sour on the stock-market bubble of the late 1990s and the housing bubble a few years later, has turned sour on stocks again. He isn’t a perma-bear. On the contrary. But he is an interesting voice that folks ignored the last two times to their detriment.
“The market is way overpriced,” he told Bloomberg. “It’s not as intellectual as people would think, or as economists would have you believe.”
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***When Money Is “Free,” Discipline Evaporates; When Discipline Evaporates, Decisions Are Disastrous – Charles Hugh Smith
17 maart
The only possible output of a system lacking any discipline is self-destruction.
Whatever is free is squandered. When water is free, it’s freely wasted. When electricity is free, there’s no motivation to use it wisely.
The same principle holds true for money. If money is free, or nearly free, there is no motivation to invest it wisely, or consider the opportunity costs of spending it versus investing it or preserving it as savings.
Money that can be borrowed for next to nothing is essentially “free” because the costs of interest are negligible. Money that can be borrowed in virtually unlimited quantities is also “free,” as whatever funds are squandered or lost to malinvestment can be easily replaced with more borrowed money.
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Capital Illogic – John H. Cochrane
14 maart
More Bank Capital Could Kill the Economy write Tim Congdon and the usually sensible Steve Hanke in today’s Wall Street Journal.
I was expecting a quantitative disagreement on plausible channels — some explicit violation of the Modigliani Miller theorem, some reason that splitting the pizza into 8 slices rather than 4 will help your diet, some argument that relationship lending is inherently tied to short-term funding, and so forth. Instead, we got treated to one of the most illogical conclusions I’ve seen on the WSJ pages for a long time.
This is a really important argument to revisit, at a really sensitive time. Right now, the Administration wants to rethink Dodd-Frank. Great. But they could go in two ways: 2) increase capital a lot, and get rid of all the intrusive and stultifying risk regulation and anti-competitive regulation; 2) reduce capital requirements a lot, so the big banks go on an orgy of government-guaranteed borrowing and risky investment. From my last post you can see it going either way. Anti-capital fallacies just pour slops into the second trough.
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How globalisation affected manufacturing around the world – Adrian Wood
18 maart
In defending trade from misguided protectionism, economists argue that the main killer of manufacturing employment around the world has been technology, not trade. This column explores how globalisation has caused the sectoral structures of countries to conform more closely to their factor endowments. In the skill-abundant developed regions, manufacturing became more skill-intensive, while in skill-scarce and land-scarce Asia, labour-intensive manufacturing expanded. In land-abundant developing Africa, Latin America, and the Middle East, by contrast, manufacturing contracted.
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***It’s Time To Get Painfully Honest: Banks Are Evil – Adam Taggart
18 maart
I don’t talk to my classmates from business school anymore, many of whom went to work in the financial industry.
Why?
Because, through the lens we use here at PeakProsperity.com to look at the world, I’ve increasingly come to see the financial industry — with the big banks at its core — as the root cause of injustice in today’s society. I can no longer separate any personal affections I might have for my fellow alumni from the evil that their companies perpetrate.
And I’m choosing that word deliberately: Evil.
In my opinion, it’s long past time we be brutally honest about the banks. Their influence and reach has metastasized to the point where we now live under a captive system. From our retirement accounts, to our homes, to the laws we live under — the banks control it all. And they run the system for their benefit, not ours.
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The Census Bureau’s Faulty Data About a Coming “Non-White” Majority – Ryan McMaken
16 maart
Last week, Tucker Carlson asked Univision correspondent Jorge Ramos about earlier comments in which Ramos contended that “in 2044, the white population will become a minority.”
In response, some conservative sites seized upon Ramos’s comments as an attempt to milk outrage from their readers.
Breitbart, for instance focused on Ramos’s comment that “it is our country, not theirs.” and implied — in words meant to be received ominously by the reader — that by “our country,” he meant “Latino migrants.”
Ramos, meanwhile, was clearly using these words to attempt to stir up anti-Trump opposition based on triumphalist predictions of an imagined future of Latino nationalism.
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Signs That The Silicon Valley Tech Bubble Is About To Burst – Tyler Durden
18 maart
18 months ago there was a seemingly limitless number of Silicon Valley future billionaires buying up multi-million dollar homes and renting out lavish pads. But if demand for excessively priced real estate is any indication of the health of Silicon Valley’s tech industry then all the venture capitalists who have tripped over themselves to invest in the next ‘decacorn’, or startups worth $10s of billions pre-IPO despite burning billions of cash quarterly, should be getting pretty worried right about now.
As the following chart from Zillow points out, home prices in San Francisco stalled about a year ago and rents have followed a similar path.
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***New Oil Price War Looms As The OPEC Deal Falls Short – Nick Cunnningham
13 maart
Last November, OPEC orchestrated an impressive feat: corralling all (or nearly all) of its members to sign on to relatively aggressive production cut deal, and then actually convincing everyone to follow through on those reductions beginning in January. OPEC’s estimated 94 percent compliance rate defied the cartel’s own history of cheating and mistrust, and OPEC has taken around 1 million barrels of oil production per day off the market.
They were initially rewarded for this. Oil prices rallied more than 20 percent in the month after the deal was announced and investors and analysts have been mostly bullish on crude prices ever since. But the cuts were not all that they seemed to be for two reasons: OPEC cut from record highs and countries exempted from the deal ramped up oil production in the fourth quarter of 2016, offsetting much of the reductions.
Member countries (excluding Indonesia, which is no longer a member) produced about 32.5 million barrels per day (mb/d) in August. That was the last month before the September Algiers accord, which was basically an agreement to agree to cuts at a later date.
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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.