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.

——————————————————————————————————
Goldman: Avoiding A Recession Will Require “Something The Fed Has Never Achieved Before” – Tyler Durden
14 juli
In our broad discussion about the inevitable turning of the credit cycle yesterday, we noted that the current expansion is now the second longest in US history and will become the longest if it survives another year, even as investor concerns grow that 2020 is the year when the next recession finally hits, with some starting to take proactive measures.
Still, according to some the recession risk remains somewhat overstated. Take for example, Goldman, whose recession model, which uses economic and financial data from 20 advanced economies to estimate recession odds, puts the probability of recession at under 10% over the next year and just over 20% over the next two years, below the historical average, while the bank’s recession risk dashboard — a collection of the most valuable leading indicators drawn from our research and academic studies—also continues to send a comforting message.
——————————————————————————————————
***These Eight Words Helped Cause the Great Depression – Hunter Lewis
9 juli
Can the entire story of the worst economic disaster in American history really be told from just eight words in a political party’s platform? In this case, yes.
Here are the fateful words that introduced the second section of the Republican Party’s 1932 platform, right after a waffling plank on prohibition: “We believe in the principle of high wages.”
——————————————————————————————————
NIRP Did It: I’m in Awe of How Central-Bank Policies Blind Investors to Risks – Wolf Richter
13 juli
“Reverse-Yankee” Junk Bond Issuance Hits Record.
It’s paradise for US companies looking for cheap money. They range from sparkly investment-grade companies, such as Apple with its pristine balance sheet, to “junk” rated companies, such as Netflix with its cash-burn machine. They have all been doing it: Selling euro-denominated bonds in Europe.
The momentum for these “reverse Yankees” took off when the ECB’s Negative Interest Rate Policy and QE – which includes the purchase of euro bonds issued by European entities of US companies – pushed yields of many government bonds and some corporate bonds into the negative.
——————————————————————————————————
Leaving money on the table: Declining responsiveness and the productivity slowdown – Ryan Decker, John Haltiwanger, Ron Jarmin, Javier Miranda
12 juli
Job reallocation is an important determinant of productivity. This column uses US data to show that a decline in the degree of job reallocation in response to shocks is behind the overall fall in the rate of reallocation over the past decades. Weakening responsiveness became a drag on aggregate productivity for high-tech businesses in the 2000s, but in other sectors the problem dates back to the 1980s.
——————————————————————————————————
***Hedge Fund Legend Mike Steinhardt Shares The Secrets Of His Greatest Trade: RealVision Interview – Tyler Durden
14 juli
In a recent interview with RealVision, the “dean of financial reporters” Jim Grant, publisher of “Grant’s Interest Rate Observer”, interviewed Michael Steinhardt, a member of the old guard of hedge-fund titans, about his views on markets and the hedge fund industry. And he’s certainly qualified to have an opinion: Steinhardt achieved, during his more than 30-year career, a phenomenal return, and those who invested $1 with Steinhardt in 1967 would have $481 in 1995, compared to $19 if one had stuck with the S&P.
While Grant admits that the title “world’s greatest investor” is bandied about without much thought nowadays, he believes Steinhardt truly does have a legitimate claim: One of Steinhardt’s first investors, a man from Chicago who put up $500,000 when Steinhardt Partners launched in 1967, noticed at one point that he was worth $100 million.
——————————————————————————————————
But Who Pays the Price of All This Inflation? – Wolf Richter
12 juli
We already know who.
Inflation “looks quite good,” Chicago Fed President Charles Evans said so eloquently in an interview even before today’s Consumer Price Index was released.
Today, by his standards, inflation looks even better. In June, the Consumer Price Index for all urban consumers rose a brisk 2.9% compared to a year ago, the sharpest increase since February 2012::
Without the volatile food and energy groups, which weigh about 21% in the index, “core” CPI rose 2.2% in June compared to a year ago.
——————————————————————————————————
Decomposing globalisation – William Lincoln, Andrew H. McCallum
10 juli
The number of US firms that export increased dramatically over the past few decades. This column argues that while foreign market entry costs have been stable over time, declines in telecommunications costs, free trade agreements, and economic growth abroad have been vital drivers of the globalisation of US firms.
——————————————————————————————————
***Big Pharma and the Rise of Gangster Capitalism – Charles Hugh Smith
13 juli
$8 per vial in competing developed-world nations and $38,892 in the U.S. That says it all.
Thanks to decades of gangster films, we all know how gangster capitalism works: the cost of “protection” goes up whenever the gangster wants to increase revenues, any competition is snuffed out, and “customer demand” is jacked up by any means available– addiction, for example.
This perfectly describes the pharmaceutical industry and every other cartel in America. You might have read about the price increase in Acthar gel, a medication to treat Infantile Spasms. (via J.F., M.D., who alerted me to the repricing of this medication from $40 in 2001 to the current price of $38,892.)
The compound first received approval in 1950, and various branded versions have been approved in recent years. Let’s be clear: this medication did not require billions of dollars in research and development, or decades of testing to obtain FDA approval; it’s been approved for use for the past 68 years.
——————————————————————————————————
Leveraged-Loan Risks Are Piling Up – Wolf Richter
10 juli
Rising interest rates have a peculiar effect.
US junk-bond issuance in June plunged 31% from a year ago to just $14.5 billion, the lowest of any June in five years, according to LCD of S&P Global Market Intelligence. During the first half of the year, junk bond issuance dropped 23% from a year ago to $110.6 billion.
Is investor appetite for risky debt drying up? Have investors given up chasing yield? On the contrary! They’re chasing harder than before, but they’re chasing elsewhere in the junk-rated credit spectrum: leveraged loans.
——————————————————————————————————
Financial globalisation and the welfare state – Assaf Razin, Efraim Sadka
8 juli
Financial globalisation triggers tax competition among countries and the possibility of a ‘race to the bottom’. This can chip away at the domestic tax base, and the reallocation of international capital is likely to result in the downscaling of the scope and size of redistribution under the welfare state. This column argues, however, that even a reduced welfare state can still act as a device to compensate the losers from financial globalisation losers in a Pareto-improving way.
——————————————————————————————————
Student Debt Bubble Expands As Parents Do More Of The Borrowing – John Rubino
13 juli
Not so long ago, student debt was mostly the responsibility of students. That is, you paid for college with loans and then paid off those loans with the proceeds of the good job you got with an advanced education.
These days it’s a little different. The cost of higher education is soaring, the jobs available to college grads don’t pay as much, relatively speaking, as they used to, and the size of loans available to students – though huge – don’t cover the full cost of many degrees.
One might expect these changes to lead more students to work for a few years and save up, or choose a cheaper degree, or eschew college altogether (as a lot of successful people now recommend) and substitute work experience for a diploma.
——————————————————————————————————
“Big Four” Audit Oligopoly Strikes Back at Plans to Break it Up – Don Quijones
14 juli
After a series of sudden corporate collapses, audit firms face a crisis in the UK.
Deloitte, one of the so-called “Big Four” accountancy firms that have effectively cornered the global audit industry, has warned the UK government and regulators that any attempt to break up their oligopoly could backfire. Forcing the Big Four — which also include KPMG, PwC and EY — to split could harm Britain’s standing as a global financial center just at a time when the City is straining under Brexit pressures, the accountancy firm told a parliamentary inquiry.
——————————————————————————————————
PC and the Bureaucratization of the Economy – William L. Anderson
11 juli
The recent incident at a Philadelphia Starbucks in which police arrested two black men who were waiting for a friend to join them has stirred a lot of controversy and brought bad publicity to the coffee chain. Facing demonstrations accusing the company of racism, the Starbucks management even closed some of its stores for one day in May so that employees can undergo training to deal with racial biases.
——————————————————————————————————
“World’s Most Bearish Hedge Fund” Has An Alternative View On Yuan Weakness, With “Profound Implications” – Tyler Durden
14 juli
Like David Einhorn, Horseman Global had a very ugly month, in fact its 6.9% drop in June which dragged YTD performance back into the red (-2.83% YTD), was the worst month for Horseman going back to the end of 2016.
However, unlike Einhorn, who lost 8% in June bringing his YTD performance to -19% and whose woes can be mostly attributed to the relentless rise of the tech names that make up his “short basket”, Horseman was hit due to something else entirely: its aggressive short dollar bet. Like so many other funds who turned bearish on the greenback at the start of the year only to suffer a violent short squeeze, Horseman was caught in the trade tug of war, in which China – for one reason or another – saw the Yuan depreciate last month by the most on record, surpassing the August 2015 devaluation. Subsequent dovish language from both the ECB and BOJ did not help, as Horseman CIO Russel Clark explains:
——————————————————————————————————

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.