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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Tightening the Money Supply will Inevitably Lead to a Bust – Frank Shostak
2 februari
Fed policymakers are of the view that the correct interest rate policy could bring the economy onto a path of economic stability and low price inflation. The idea is to guide interest rates toward what is called the “natural” interest rate. The natural rate is believed to be one that is consistent with stable prices and a balanced economy.
What is required then is that Fed policymakers successfully target the federal funds rate toward this natural interest rate.
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It’s Time We Talked About Our Owners – Don Quijones
2 februari
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How vast asset managers impact “our increasingly cartelized economy.”
The world’s biggest asset manager, BlackRock, was splashed across the front pages of the Spanish financial news yesterday. The firm had just raised raised its stake in Spain’s telecoms giant Telefónica to 336 million shares — the equivalent of 6.7% of Telefónica’s total capital, with a market value of just under €3 billion.
In the short space of five months BlackRock has almost doubled its holdings and is now the largest owner of Telefónica stock, ahead of Spain’s second biggest bank, BBVA, which holds 6% of the shares. The asset manager has also expanded its participation in Telefónica’s international subsidiaries, raising its holdings in Telefónica Deutschland to 0.76% and Telefónica Brasil to almost 2%, making it the firm’s biggest institutional shareholder.
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A Murderous Complacency – Dark omens are circling everywhere in today’s markets – Adam Taggart
3 februari
Running PeakProsperity.com requires me to read and process a lot of data on a daily basis. As it’s hard to digest it all in real-time, I keep a running list of charts, tables and articles that catch my attention, to return to when I have the time to give them my full focus.
Lately, that list has been getting quite long. And it’s largely full of indicators that concern me; signals that the long era of “extend and pretend” in today’s markets may finally be at its terminus.
Like crows circling overhead, every day brings with it new worrisome statistics that portend an ill change ahead. Indeed, these omens are increasing so quickly now that it’s hard not to feel like Tippi Hedren in Hitchcock’s suspense classic The Birds.
So what are the data that make me think these crows will soon be feasting on the carcass of the great bull market that has powered stock, bonds, real estate and most other asset classes to record highs since 2009?
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The Central Banks Pull Back: Now It’s Up to Fiscal Policy to “Save the World” – Charles Hugh Smith
2 februari
Another problem is the rise of social discord, for reasons that extend beyond the reach of tax reductions and increased infrastructure spending.
Have you noticed that the breathless anticipation of the next central bank “save” has diminished? Remember when the financial media was in a tizzy of excitement, speculating on what new central bank expansion would send the global markets higher in paroxysms of risk-on joy?
Those days are gone. Nowadays, central banks cautiously continue the bond buying programs they’ve had in place for years, but their policy initiatives are tepid at best: they talk about expanding asset-buying programs to include more stocks, or discuss notching interest rates higher in some cases; but the talk is subdued, as expectations are being consciously lowered.
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Why the “Maximize Shareholder Value” Theory Is Bogus – Yves Smith
3 februari
From the early days of this website, we’ve written from time to time about why the “shareholder value” theory of corporate governance was made up by economists and has no legal foundation. It has also proven to be destructive in practice, save for CEO and compensation consultants who have gotten rich from it.
Further confirmation comes from a must-read article in American Prospect by Steven Pearlstein, When Shareholder Capitalism Came to Town. It recounts how until the early 1990s, corporations had a much broader set of concerns, most importantly, taking care of customers, as well as having a sense of responsibility for their employees and the communities in which they operated. Equity is a residual economic claim. As we wrote in 2013:
Directors and officers, broadly speaking, have a duty of care and duty of loyalty to the corporation. From that flow more specific obligations under Federal and state law. But notice: those responsibilities are to the corporation, not to shareholders in particular…..Equity holders are at the bottom of the obligation chain. Directors do not have a legal foundation for given them preference over other parties that legitimately have stronger economic interests in the company than shareholders do.
And even in the early 1980s, common shares were regarded as a speculative instrument. And rightly so, since shares are a weak and ambiguous legal promise: “You have a vote that we the company can dilute whenever we feel like it. And we might pay you dividends if we make enough money and are in the mood.”
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Markets Smell a Rat as Central Banks Dither – NIRP is dying – Wolf Richter
2 februari
Markets are suspecting that central banks are in the process of exiting this fabulous multi-year party quietly, and that on the way out they won’t refill the booze and dope, leaving the besotted revelers to their own devices. That thought isn’t sitting very well with these revelers.
In markets where central banks have pushed government bond prices into the stratosphere and yields, even 10-year yields, below zero, there has been a sea change.
The 10-year yield of the Japanese Government Bond (JGB) jumped 2.5 basis points to 0.115% on Thursday, the highest since January 2016, after an auction for ¥2.4 trillion of 10-year JGBs flopped, as investors were losing interest in this paper at this yield, and as the Bank of Japan, rather than gobbling up every JGB in sight to help the auction along, sat on its hands and let it happen.
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The invisible service: The economics, regulation, and systemic risk of insurance markets – Felix Hufeld, Ralph Koijen, Christian Thimann
30 januari
Despite the importance of insurance, discussions about the macroeconomic role and the risks of insurance markets have been surprisingly limited. This column explores some of the key theoretical and conceptual questions still unanswered in this field, and suggests that a two-fold approach combining a focus on individual firms and an activity-based approach across the sector is needed to tackle systemic risk within the insurance industry.
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***Why Our System Is Broken: Cheap Credit Is King – Charles Hugh Smith
30 januari
You want to fix the economic system, reduce political bribery and reduce rising income inequality? Shut off the cheap unlimited credit spigot to banks, financiers and corporations.
Cheap credit–newly issued money that can be borrowed at low rates of interest–is presented as the savior of our economic system, but in reality, it’s why our system is broken. The conventional economic pitch goes like this: cheap credit enables consumers to buy more goods and services (and since the system needs growth or it implodes, that’s good).
Cheap credit also enables companies to invest in new productive assets (capital).
Last but not least, low rates of interest enables the government at all levels to borrow money at relatively low cost.
That all sounds good in theory, but let’s see how cheap credit works in the real world.
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“Watch Out for the Shock”: Asset Manager Natixis – Wolf Richter
13 januari
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Investors have gotten so used to central bank “laxity” they “cannot believe it will end.”
Financial markets are essentially burying their heads in the sand about rising interest rates in the US and the end of QE in the Eurozone, according to Patrick Artus, Chief Economist and member of the Executive Committee of Natixis, an investment bank and asset managers with about $900 billion in assets under management.
Investors have been spoiled by central banks and their highly expansionary monetary policies “for such a long time” that they “cannot believe” that the Fed and the ECB “can end these policies,” he writes.
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Reality vs. The “Recovery” Narrative – C. Jay Engel
2 fwbruari
As Jeffrey Lacker leads the pack on the Fed’s “concern of overheating” front, last Friday’s 2016 fourth quarter GDP numbers completely contradict the narrative. Coming in at a paltry 1.85% growth rate, the Fed was handed yet another excuse to push off the so-called “normalization of interest rates” further into the future. The Fed’s FOMC again confirmed as much at its February meeting.
The Fed has stated for years — since 2008 — that it needed to keep interest rates low in order to support a sustainable recovery. The Fed was allegedly paying close attention to it’s Congressionally-sourced dual mandate to determine when it could start allowing rates to rise. But now it is 2017 and the Fed’s bureaucratic statistics relating to unemployment and price inflation say things are just dandy. But the GDP numbers, which purport to measure growth, scream the opposite.
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Bank competition and financial stability: The role of financial innovation – David Marques-Ibanez, Michiel van Leuvensteijn
3 februari
An unprecedented process of deregulation took place in the banking sector in the three decades prior to the Global Crisis. This column argues that during periods of intense bank competition, financial innovation can compound the adverse effects of competition on stability. Coupled with strong competition, the significant use of one such innovation – securitisation – in the run-up to the crisis was related to high levels of bank risk.
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Will “Big Data” Make a Centrally Planned Economy Possible? – Xiong Yue
1 februari
Many of us were once convinced that idea of the centrally-planned economy, both in theory and in practice, had been completely buried. Most economists today would argue that the planned economy doesn’t work, and in the last two decades of the twentieth century, almost all the planned economies shifted toward market economics.
However, with the development of new technologies such as cloud computing, big data, and artificial intelligence, some people start to believe that — with the help of powerful new technologies — we can finally achieve a planned economy.
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***The European origins of economic development – William Easterly, Ross Levine
3 februari
Countries have followed widely divergent paths of economic development since European colonisation, with some going on to be among the richest countries in the world today, and others having experienced little economic development over the last few centuries. This column, taken from a recent Vox eBook, uses a new database on the European share of the population during colonisation to examine the historical determinants of colonial European settlement and its relationship with current economic development.
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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.