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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This is How Financial Chaos Begins – Wolf Richter
12 februari
There are over $1.8 trillion of US junk bonds outstanding. It’s the lifeblood of over-indebted corporate America. When yields began to soar over a year ago, and liquidity began to dry up at the bottom of the scale, it was “contained.”
Yet contagion has spread from energy, metals, and mining to other industries and up the scale. According to UBS, about $1 trillion of these junk bonds are now “stressed” or “distressed.” And the entire corporate bond market, which is far larger than the stock market, is getting antsy.
The average yield of CCC or lower-rated junk bonds hit the 20% mark a week ago. The last time yields had jumped to that level was on September 20, 2008, in the panic after the Lehman bankruptcy, as we pointed out. Today, that average yield is nearly 22%!
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How to fix the Eurozone: Views of leading economists – Richard Baldwin, Francesco Giavazzi
12 februari
Important progress has been made in repairing the design faults that the EZ Crisis revealed. This column introduces a new VoxEU eBook which argues that fixing the Eurozone is a job half done. The eBook, which presents 18 chapters by leading economists that hail from a broad range of nations and schools of thought, is surely the most comprehensive collection of solutions that has ever been assembled.
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Bank recapitalisation and economic recovery after financial crises – Timotej Homar, Sweder van Wijnbergen
13 februari
It has been claimed that recessions as a result of a financial crisis tend to last longer than normal recessions. This column asks whether early intervention to help distressed banks during financial crises is effective in mitigating the consequences of financial distress. The evidence suggests that decisive and early recapitalisation of banks can shorten recessions by several years and help speed up recovery.
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***Dollar Crushes Mexican Peso as Problems Balloon – Don Quijones
11 februari
Tensions are rising in Mexico’s model economy. Chief among them is the spectacular decline of the Mexican peso, which has lost 8% percent of its value so far this year against the dollar, more than any other major currency. Since June 2014, it has shed 33% of its weight, now at 19.2 pesos to the U.S. dollar, the lowest ever.
In many ways the peso is a victim of its own popularity. As the world’s most traded emerging market currency, the peso is prone to steep ups and downs. The market for the peso is so much deeper than for any other emerging market currency that many traders use it as a general proxy for risk. And risk is very much on the rise these days.
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European Central Bank Gets Ready for More Easy Money – Frank Shostak
11 februari
On January 21, 2016 European Central Bank (ECB) President Mario Draghi signaled that the governing council may provide more stimulus at its next meeting in March. “There are no limits to how far we’re willing to deploy our instruments,” Draghi predicted.
The ECB president is of the view that the monetary stimulus undertaken by the central bank since June 2014 had strengthened the euro area’s resilience to recent global economic shocks. The yearly growth rate of the ECB balance sheet (an indicator of monetary pumping) jumped from minus 8.5 percent in December 2014 to 31.3 percent by December 2015, whilst the policy rate of the ECB stood at a record low of 0.05 percent.
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Europe’s equity markets matter – Christian Krohn
12 februari
The role of equities in Europe’s capital markets has diminished since the Global Crisis and is only slowly recovering to its prior level. This column argues that revitalising its equity markets has much to offer Europe in terms of funding business growth, creating jobs, and delivering long-term pension returns for the ageing population. The root causes of Europe’s underutilised equity markets are both cultural and regulatory. Understanding and addressing these barriers are the next necessary steps towards the full utilisation of equities.
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German Judges Pooh-Pooh Obama’s Sacred US-EU Trade Pact – Don Quijones
7 februari
This past week saw the ceremonious signing of the Trans-Pacific Partnership (TPP) in Auckland, an event whose prime purpose was to convince the world that a trade agreement that most people have not even heard of and which has so far been approved by only one (Malaysia) out of 12 elected parliaments is already done and dusted.
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However, the biggest blow to the global corporatocracy’s bloated designs did not come from the U.S. It came from Germany, where the German Association of Judges (DRB, an association that also includes prosecutors) just issued a damning indictment on the EU’s proposal to establish an “investment court system (ICS)” for the TPP’s sister treaty, the Transatlantic Trade and Investment Partnership (TTIP).
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Tax reform and corporate behaviour: Evidence from the UK – Peter Egger, Martin Ruf, Valeria Merlo, Georg Wamser
9 februari
Many countries exempt foreign-sourced income from taxation at home, with income taxed only in the source country. In 2009, the UK moved from a system of tax credit to a system of tax exemption of foreign-earned income of firms. This column looks at the effects of this reform on firm behaviour. Immediately following the reform, firms were induced to pay significantly more dividends to the UK and decreased their investments. But neither effect persisted in the long run.
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Why NIRP (Negative Interest Rates) Will Fail Miserably – Charles Hugh Smith
12 februari
What NIRP communicates is: this sucker’s going down, so sell everything and hoard your cash and precious metals.
The last hurrah of central banks is the negative interest rate policy–NIRP. The basic idea of NIRP is to punish savers so severely that households and businesses will be compelled to go blow whatever money they have on something–what the money is squandered on is of no importance to central banks.
All that matters is that people and enterprises are forced to spend whatever cash they have rather than “hoard” it, i.e. preserve and conserve their capital.
That this is certifiably insane is self-evident. If an economy depends on bringing future spending into the present by destroying savings, that economy is doomed regardless of NIRP, for eventually the cash runs out and spending declines anyway.
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Three Reasons to Be Worried About the Economy – Yonathan Amselem
8 februari
On January 12, America’s central planner-in-chief gave his State of the Union address. The president promised nothing less than to feed the hungry, create jobs, shape the earth’s climate, and make everyone a college graduate. There’s nothing new here, though. We’ve heard variations of this silly song and dance every year under both Democrats and Republicans. The president lambasted naysayers as fear-mongers that were too partisan to admit we have a booming economy. The fact that the Dow Jones cratered roughly 9 percent in the same thirty-day period President Obama gave his address did nothing to quell Obama’s optimism about America’s future. In fact, he labeled the US economy “the strongest and most durable in the world.”
Despite our leader’s unwavering confidence in America’s fortunes, a quick peak under the hood reveals a pretty grim state of American commerce.
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Eurobanks: The Probable Point of Failure as Systemic Stress Rises – Yves Smith
12 februari
As all major financial markets – stocks, currencies, commodities, and bonds – continue to be highly volatile and risk averse, investors’ mood, and even that of real economy players, is getting nervous and gloomy. Both the masters of the universe at Davos and corporate CEOs have an uncharacteristically subdued outlook for the upcoming year.
But the open question is how much financial market stress transmits into the financial system and/or the real economy. The portents do not look good. Yesterday Ambrose Evans-Pritchard tried arguing cheerfully that the stock market rout was a good thing, since it takes out the unwarranted premium in equity prices in a time of earnings growth almost entirely dependent on stock buybacks, and that cheap oil was good for consumers. But it’s one thing when a downdraft corrects froth. It’s another thing entirely when it is a symptom of years, actually decades, of bad policies.
What should trouble commentators and analysts most, and this is implicit in the market upheaval, is that the officialdom, most importantly central bankers, who have developed the bad tendency to assign themselves the role of economic first responders (when they would in cases have been better served to sit on their hands and force governments to step to the plate to do more spending) have no idea what to do now.
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The use and effectiveness of macroprudential policies: New evidence – Eugenio Cerutti, Stijn Claessens, Luc Laeven
10 februari
Macroprudential policies are meant to reduce procyclicality in financial markets and associated systemic risks. However, empirical evidence on which policies are most effective is still preliminary and inconclusive. This column documents the use of macroprudential policies by a large set of countries over an extended period, and covering many instruments. It shows which policies are most effective in reducing the growth rates of overall credit and household and corporate sector credit, and explores differences across countries, degrees of avoidance, and whether policies work better during booms or busts.
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***How Systems Break: First They Slow Down – Charles Hugh Smith
10 februari
Alternatively, we can cling to a state of denial, and the dominant system will be replaced by archetypal systems that are not necessarily positive.
Understanding our current socio-economy as a system of sub-systems enables us to project how and when unsustainable sub-systems will finally unravel.
The reality that cannot be spoken within the conventional media is that all the primary financial systems we believe are permanent and indestructible are actually on borrowed time.
One way to assess this decline of resilience is to look at how long it takes systems to recover when they are stressed, and to what degree they bounce back to previous levels.
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Frequency, Size of Labor Disputes Up In 2015 For First Time In Years – Sam Knight
10 februari
Industrial unrest in the United States was more frequent and widespread last year, according to annual data released Wednesday by the Bureau of Labor Statistics.
There were twelve “major work stoppages” measured by BLS, up from eleven the year before. The disputes involved about 47,000 workers—a year-over-year increase of 13,000.
It was the first year since 2011 that saw the number of major work stoppages increased in the US, and the first year since 2012 to see the number of workers involved in industrial disputes go up.
The number of days lost to disagreements between management and unionized labor was also up by almost 400 percent. In 2015, 740,000 workdays were lost to strikes or lockouts–up from 200,000 in 2014.
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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.