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.

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Financial engineering will not stabilise an unstable euro area – Paul De Grauwe, Yuemei Ji
19 maart
A number of economists and officials have recently proposed different schemes aimed at using financial markets to impose the right amount of discipline in the euro area. This column argues that this would not eliminate the inherent instability of the sovereign bond markets in a monetary union. During crises this instability becomes systemic, and no amount of financial engineering can stabilise an otherwise unstable system.
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“It’s Foolish To Believe The Endgame Is Anything But Inflation…” – Kevin Muir
23 maart
I am going to break from regular market commentary to step back and think about the big picture as it relates to debt and inflation. Let’s call it philosophical Friday. But don’t worry, there will be no bearded left-wing rants. This will definitely be a market-based exploration of the bigger forces that affect our economy.
One of the greatest debates within the financial community centres around debt and its effect on inflation and economic prosperity. The common narrative is that government deficits (and the ensuing debt) are bad. It steals from future generations and merely brings forward future consumption. In the long run, it creates distortions, and the quicker we return to balancing our books, the better off we will all be.
I will not bother arguing about this logic. Chances are you have your own views about how important it is to balance the books, and no matter my argument, you won’t change your opinion. I will say this though. I am no disciple of the Krugman “any stimulus is good stimulus” logic.
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Europe Is Slowing Down — And It’s Already Painted Into a Corner – Daniel Lacalle
22 maart
Consensus remains euphorically optimistic about the eurozone.
However, the first data of 2018 are worrisome. While consensus expects a strong 2018 for Europe, the advanced data begins to question the optimistic expectations:
In the last two weeks, consensus estimates of earnings per share have been revised down 32% in the Eurostoxx 50 index and 13% in the Stoxx 600 index, according to Bloomberg.
Germany’s industrial production fell 0.1% in January, compared to a consensus estimate of a 0.5% rise.
In France, January Industrial Production fell by 2% and in Spain by 2.6%, both well below expectations, which pointed to a flat growth in both cases.
The Economic Surprise Index published by Citigroup plummeted in the eurozone, while it fell more moderately for the US.
The European Central Bank has revised downward its inflation estimates a tenth to 1.4% for 2018 while maintaining the 2019 estimate, as they always do, until they have to face the reality.
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So is the “Trade War” Crushing Stocks? – Wolf Richter
24 maart
Bull markets climb a wall of worry. What the heck happened?
OK, it was an ugly week. Facebook (FB) dropped 14% and lost $75 billion in market cap. It’s down 10% year-to-date. It’s currently trying to dig itself deeper into its self-inflicted debacle. It wasn’t just Facebook. Alphabet (GOOG) dropped 10% in the week and is down 2.4% year-to-date. This was a broad selloff.
The S&P 500 index dropped nearly 6% for the week and 9.9% from the peak on January 26. It’s down 3.2% year-to-date. At 2,588, it’s just 7 points above the low point on February 8, which is begging to be taken out on Monday. This drop is big enough to show up on a long-term chart, but given the nine-year 320% rally, why would anyone be surprised?
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Putting the Greek debt problem to rest – Barry Eichengreen, Emilios Avgouleas, Miguel Poiares Maduro, Ugo Panizza, Richard Portes, Beatrice Weder di Mauro, Charles Wyplosz, Jeromin Zettelmeyer
20 maart
Greece’s third economic programme has been relatively successful, but before it can return to private market financing, the country will require more official debt relief. This column introduces a new CEPR Policy Insight which asks how much debt relief is required and how it should be delivered. Any debt relief package for Greece that wishes to avoid shifting the burden of repayment several generations into the future will need to include some degree of face-value debt relief.
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Solutions Only Arise Outside the Status Quo – Charles Hugh Smith
21 maart
Solutions are only possible outside these ossified, self-serving centralized hierarchies.
Correspondent Dan F. asked me to reprint some posts on solutions to the systemic problems I’ve outlined for years, most recently in How Much Longer Can We Get Away With It? and Checking In on the Four Intersecting Cycles. I appreciate the request, because it’s all too easy to dwell on what’s broken rather than on the difficult task of fixing what’s broken.
I’ve laid out a variety of solutions to structural problems in my many books, and I’ll attempt a brief synthesis in this post.
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***The Looming Mortgage Liquidity Crisis – Doug French
23 maart
Every 10 years or so there is a banking crisis. We are due. However, the furthest thing from most people’s minds with the Trump boom is a banking/financial crisis, except for a few folks at the Brookings Institution, who just released a paper entitled “Liquidity Crisis in the Mortgage Market.”
You Suk Kim, of the Federal Reserve Board; Steven M. Laufer, who also labors on the Federal Reserve Board along with Karen Pence, plus, Richard Stanton of the University of California, Berkeley, and Nancy Wallace, also of University of California, Berkeley, to give away the punchline from their paper’s abstract, write, “We describe in this paper how nonbank mortgage companies are vulnerable to liquidity pressures in both their loan origination and servicing activities, and we document that this sector in aggregate appears to have minimal resources to bring to bear in a stress scenario.”
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China’s Empty Threat of Dumping its US Treasuries – Wolf Richter
23 maart
In an interview about the trade sanctions that President Trump is throwing at China and at Corporate America – whose supply chains go through China in search of cheap labor and other cost savings – Ambassador Cui Tiankai defended the perennial innocence of China, as is to be expected, and trotted out the standard Chinese fig leafs and state-scripted rhetoric that confirmed in essence that Trump’s decision is on the right track.
Speaking on Bloomberg TV, he also trotted out all kinds of more or less vague and veiled threats – such as, “We will take all measures necessary,” or “We’ll see what we’re doing next” – perhaps having forgotten that China and Hong Kong combined export three times as much to the US as the other way around, and the pain of a trade war would be magnified by three on the Chinese side.
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Collusion – Central Bank Money Rules The World – Nomi Prins
21 maart
Central bank credit that supports markets — is not just creation of the Fed, but by central banks and institutions around the world colluding together. Global markets are too deeply connected these days to consider the Fed in isolation.
Since last month’s correction, the world has been watching the Fed because its policies have global implications. And worldwide sell-offs sent a clear sign to Fed Chair Powell to relax with the rate hikes.
When fears arise that central bank QE will recede on one side of the world, we see more volatility and rumors of hawkishness. To counter those fears, there will be a move toward dovish policy on the other side of the world.
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Central banks in the age of populism – Sylvia Merler
19 maart
Two years of elections have shown that we live in an age of increasing political and economic populism. What are the consequences of that for central banks? We explore opinions about it, from both 2017 and more recently.
Charles Goodhart and Rosa Lastra have a new paper out as well as a VoxEU piece on the subject. They argue that the consensus that surrounded the granting of central bank independence in the pursuit of a price-stability-oriented monetary policy has been challenged in the aftermath of the global financial crisis, in the light of the rise of populism on the one hand and the expanded mandates of central banks on the other hand.
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Income redistribution through taxes and transfers across OECD countries – Orsetta Causa, Mikkel Hermansen
23 maart
Growing wealth inequality has become a key concern for economists, and tackling it requires a deep understanding of how tax and transfer systems affect the income distribution. Using OECD data, this column argues that taxes and transfers are less effective at reducing inequality today than they were in the mid-1990s. This drop in effectiveness has largely been driven by declining cash transfers, with a smaller, more heterogeneous role for personal income taxes.
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***What Are Zombie Retail Stores Really Worth: Answers Emerge – Wolf Richter
22 maart
“Little or nothing.” Toys “R” Us and its commercial mortgage backed securities.
Here’s what a central-bank induced credit bubble – when investors are chasing yield while willfully ignoring risks – looks like when in full bloom, and what happens when even the worst-case scenario at the outset turns out to have been more hype than realistic.
This is how it started:
In October 2016, about 11 months before it filed for bankruptcy and 17 months before it decided to liquidate its operations in the US, Toys “R” Us sold $512 million in commercial mortgage-backed securities, backed by 123 Toys “R” Us and Babies “R” Us stores across 29 states with a combined 5.1 million sq. ft. rentable area.
At the time of the deal, the over-indebted brick-and-mortar retailer, which had been stripped of cash and loaded up with debt by its PE firm owners following the leveraged buyout in 2005, was already in financial trouble, deeply engulfed in the brick-and-mortar meltdown.
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Fiat Money and Three Big Societal Challenges – J.D. Alt
19 maart
There is a lot more riding on our understanding of modern fiat money than we typically consider or discuss. Human society is now confronted with three epoch-defining challenges and, in each case, the understanding and strategic use of modern fiat money holds out the ONLY real possibility for constructively engaging the them.
The challenges are:
Climate change & ecological collapse
Assault on democracy
Mass migration
In each case, the challenges are, first, aggravated, amplified, and intertwined by our ignorant, unimaginative clinging to the old rules and norms of “commodity” money. These old rules and norms tell us, basically, that money is (a) a finite resource that people must compete to have a share of; and (b) that a sovereign democracy must collect some portion of its citizens’ “finite” money-share (as taxes) for democracy to have money to spend for its collective goals and needs.
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***Germany’s Pivot From Russian Gas Will Be Costly – Tim Daiss
20 maart
More problems are mounting for Russia’s oil and gas sector. This time it’s coming from Germany, which until recently usually gave Russia’s energy sector more leeway than the U.S. or other allies.
But now it seems that German Chancellor Angela Merkel has also had enough. On Monday, Bloomberg reported that Merkel’s government is seeking to build a liquefied natural gas (LNG) industry in Germany basically from scratch to reduce the nation’s dependence on supplies arriving by pipeline from Russia and Norway.
Merkel backs “all initiatives supporting further diversification of gas supply — whether from different regions or means of transporting gas,” said German Economy and Energy Ministry spokeswoman Beate Baron.
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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.

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