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.

——————————————————————————————————
Has the PBoC deliberately weakened CNY as part of the trade war? – Tyler Durden
30 juni
It has been another trade war week, as the market has been looking for clues on the Chinese retaliation measures against the Trump tariffs that are planned to go live on 6 July.
Global trade momentum started to weaken even before the trade conflict escalated. The three months from February until April marked the weakest running 3-month period for world trade since early 2015. A bad sign given that the period included a temporary cease-fire between Trump and Xi Jinping. Usually it adds downwards pressure on 10yr bond yields, when world trade is slowing (at least initially). A further slowdown of global trade in June/July/August could keep long bond yields under pressure over the summer. In other words, the trade war fog needs to dissipate for the 10yr US Treasury yield to unfold its upside potential to the range between 3.25%-3.50%
——————————————————————————————————
***Corporate Brexodus Begins as “No-Deal” Brexit Looms – Don Quijones
28 juni
Potential for ugly consequences, intended or otherwise, is rising.
Construction and infrastructure giant Ferrovial has announced it is moving its international HQ from the UK to low-tax haven Amsterdam because of Brexit. The Spanish firm, which owns a quarter of the UK’s busiest airport, Heathrow, and runs its US, Canadian, Polish and UK operations from Oxford, says it needs to keep within EU legislation after the UK leaves the EU.
Airbus issued a stark warning at the end of last week that it may also consider abandoning the UK over Brexit, its strongest alert yet over the potential impact of Britain’s departure from the EU. A withdrawal without a deal would force it to reconsider its long-term position, potentially putting thousands of British jobs at risk, it said.
——————————————————————————————————
Money-Supply Growth Slides Again, Falling to 3-Month Low – Ryan McMaken
27 juni
Money supply growth fell to a three-month low in May this year, continuing a general downward slide in growth rates that’s been in place since late 2016.
In May, year-over-year growth in the money supply fell to a 3-month low, growing 4.2 percent. That was down from April 2018’s rate of 4.3 percent, but remains up from November 2017’s low of 2.6 percent:
tms1_0_0.png
The money-supply metric used here — an Austrian or “true” money supply measure — is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure than M2. The Mises Institute now offers regular updates on this metric and its growth.
The “Austrian” measure of the money supply differs from M2 in that it includes treasury deposits at the Fed (and excludes short time deposits, traveler’s checks, and retail money funds).
——————————————————————————————————
Risks Pile Up Quietly in the US Corporate Bond Market – Wolf Richter
24 juni
The fear of becoming a “fallen angel.”
Companies whose credit rating is below “investment grade” can borrow in the capital markets in two ways: by issuing what is lovingly called junk bonds; and by issuing “leveraged loans.”
Leveraged loans are too risky for banks to keep on their books. Banks sell them, and they can be traded; or banks package them into Collateralized Loan Obligations (CLOs), and they’re traded as such. Being loans, they’re not considered securities, but they trade like securities. They’re the booming sisters of the languishing junk bonds.
——————————————————————————————————
Global financial cycles and risk premiums – Òscar Jordà, Moritz Schularick, Alan Taylor, Felix Ward
25 juni
Asset markets in advanced economies have become more integrated than ever before in the history of modern finance. This is especially true for global equities starting in the 1990s. This column argues that this increase in synchronisation is primarily driven by fluctuations in risk appetite rather than in risk-free rates, or in dividends. US monetary policy plays a major role in explaining such fluctuations, and this transmission channel affects economies with both fixed and floating exchange rates, although the effects are more muted in floating rate regimes.
——————————————————————————————————
Are You Prepared to Invest in Troubled Times? – Charles Hugh Smith
22 juni
Market “fixes” fuel wealth/income inequality which feeds political and social instability.
There are two Grand Narratives about the U.S. economy and asset markets: the mainstream narrative is that nothing is fundamentally wrong with the economy, and so no structural changes (and the sacrifices such changes entail) are needed.
In this narrative, the only problem that needs solving is markets stop bubbling higher. The mainstream always expects markets to keep bubbling higher essentially forever, but reality intrudes and the asset bubbles pop.
The solution in this narrative is to “fix” markets with massive stimulus: fiscal stimulus from the Savior State and monetary stimulus from the central bank — Federal Reserve (reinflating bubbles that enrich the already-wealthy is our primary job).
——————————————————————————————————
China’s strategic investments in Europe: The case of maritime ports – Shivali Pandya, Simone Tagliapietra
27 juni
The EU is currently working on a new framework for screening foreign direct investments (FDI). Maritime ports represent the cornerstone of the EU trade infrastructure, as 70% of goods crossing European borders travel by sea. This blog post seeks to inform this debate by looking at recent Chinese involvement in EU ports.
——————————————————————————————————
As Turkish Lira Collapses, Foreign Banks in Turkey Rue the Day – Don Quijones
26 juni
The biggest loser: BBVA, Spain’s second biggest bank.
Few foreign banks are as exposed to the risks currently affecting Turkey than Spain’s second biggest lender, BBVA. The bank owns about half of Turkey’s third biggest lender, which provides roughly 15% of its global revenues. But those revenues are under threat as the value of the currency they’re denominated in, the Turkish Lira, continues to fall.
In 2016, when Turkey’s president Recep Tayyip Erdogan declared a state of emergency after a failed coup d’état, Deutsche Bank analysts alerted that BBVA is the most vulnerable among all European banks to risks linked to political turmoil in Turkey. But rather than heeding the warning, BBVA doubled down on its bet by increasing its stake in Garanti.
——————————————————————————————————
Economic Growth Isn’t the Cause of Inflation – Frank Shostak
30 juni
Most experts are of the view that as the economy gains strength the Fed must step in at some stage and introduce a tighter stance in order to prevent the rate of inflation getting out of control.
Why however, should economic growth be positively associated with a general increase in the prices of goods and services?
Let us examine how prices in general could go up. The price of a good is the amount of dollars paid per unit of this good. Therefore, with all things being equal an increase in the quantity of dollars in the economy must lead to a general increase in the prices of goods and services.
——————————————————————————————————
***There are more foreign firms than we think! – Sara McGaughey, Pascalis Raimondos
29 juni
Researchers and policymakers often refer to ‘foreign firms’, but how do we define a firm as ‘foreign’ and does it matter for our policy conclusions? This column argues due to the dominant practice of using only direct ownership links to identify the owners of a firm, the commonly used definition of a foreign firm captures only half of the foreign firms that exist. Indirect ownership link turns out to be pivotal for identifying firms that appear to be domestic but are in reality foreign, with implications for the measurement of FDI productivity spillovers.
——————————————————————————————————
Problems with Mainstream Theories of Supply and Demand – Frank Shostak
28 juni
One of the few things economists agree on is that prices are determined by supply and demand. This is summarized by means of supply and demand curves, which describe the relationship between the prices and the quantity of goods supplied and demanded.
Within the framework of supply-demand curves, an increase in the price of a good is associated with a fall in the quantity demanded and an increase in the quantity supplied. Conversely, a decline in the price of a good is associated with an increase in the quantity demanded and in a decline in the quantity supplied.
——————————————————————————————————
Iran Furious After Trump Calls Saudi King, Demands 2MM Barrel Production Boost – Tyler Durden
30 juni
Update: as expected, it did not take long for Iran – which has the most to lose from any Saudi output hike which would not only send the price of oil lower but also allow Riyadh to capture Iran’s sanctioned market share – to respond, and moments ago Bloomberg reported that in an interview with Hossein Kazempour Ardebili, Iran’s OPEC governor, he said that “if Saudi Arabia accepts U.S. President Donald Trump’s request to boost output, that means he is calling on them to walk out from OPEC.”
“We are 15 countries in an agreement. Set aside that they do not have the capacity, there is no way one country could go 2 million b/d above their production allocation unless they are walking out of OPEC.”
Well, if they don’t have the capacity (which they do), there is no reason to be concerned. And yet Iran is precisely that, and considering that Trump said Saudi Arabia has “agreed” to his demand, we may have just witnessed the end of OPEC.
Earlier this week, when within minutes of each other, news hit last Tuesday that first Saudi Arabia would boost production to a record 10.8mmb/d, an increase of nearly 1 million barrels per day from the Kingodm’s current 10.03mmb/d output…
——————————————————————————————————
It Gets Spiky: The Most Splendid Housing Bubbles in America – Wolf Richter
26 juni
Historic spikes in Seattle and other metros. But New York condos skid.
Prices of houses and condos across the US surged 6.4% in April from a year earlier (not seasonally-adjusted), and a sharp 1% from March, according to the S&P CoreLogic Case-Shiller National Home Price Index, released this morning. The index is now 8.8% above the nutty peak of “Housing Bubble 1” in July 2006 just before it collapsed, and 50% above the trough of “Housing Bust 1.” Note the disproportionate spike in April:
That 8.8% increase since the peak of the last housing bubble — “Housing Bubble 1” in this millennium — isn’t an increase over some state of languish that the housing market needed to exceed. It was the peak of the definitive housing bubble that then collapsed and helped push the global financial system to the brink.
——————————————————————————————————
Trade Tariffs Won’t Crash the World Economy, Monetary Policy Will – Carmen Elena Dorobăț
25 juni
As the Trump administration announces 25% tariffs on over $50bn of Chinese goods, and Europe and China prepare retaliation measures, The Economist concludes that “Rising tariffs are the worst of many threats to the world economy”, because, among other things, “Tariffs temporarily push up inflation, making it harder for central banks to cushion the blow.” This statement displays a deeply entrenched confusion—if not utter misunderstanding—of some basic economic concepts. Most important, many people fail to correctly distinguish between the causes and effects of price inflation and those of monetary inflation.
——————————————————————————————————

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.

Eerdere afleveringen van dit wekelijkse overzicht vindt u hier.