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.

——————————————————————————————————
Global trade plateaus – Simon J Evenett, Johannes Fritz
13 juli
For the past 18 months, officials have worried about a global trade slowdown. This column summarises the latest Global Trade Alert report, which shows that, in fact, global trade is not growing slower – it is not growing at all. The plateau in global trade coincided with a spike in protectionism.
——————————————————————————————————
Helicopter Money: The Biggest Fed Power Grab Yet – David Stockman
14 juli
The Cleveland Fed’s Loretta Mester is a clueless apparatchik and Fed lifer, who joined the system in 1985 fresh out of Barnard and Princeton and has imbibed in its Keynesian groupthink and institutional arrogance ever since. So it’s not surprising that she was out flogging — albeit down under in Australia — the next step in the Fed’s rolling coup d’ etat.
We’re always assessing tools that we could use,” Mester told the ABC’s AM program. “In the US we’ve done quantitative easing and I think that’s proven to be useful.
“So it’s my view that [helicopter money] would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative.
——————————————————————————————————
Why Helicopter Money Won’t Push Stocks Higher – Charles Hugh Smith
13 juli
In effect, helicopter money turns the entire economy into a Ghost City.
The possibility that Japan might launch helicopter money stimulus sent global stock markets soaring in a paroxysm of pleasurable anticipation. But exactly what is helicopter money and what connection does it have to stock valuations, if any?
Broadly speaking, helicopter money is government deficit spending that is directed to households rather than the financial sector. Deficit means the government doesn’t have extra cash to pay for the stimulus program–it borrows it by selling government bonds.
With interest rates near-zero or even negative, it doesn’t cost governments much to borrow huge sums from future taxpayers. All bonds are borrowed from future taxpayers, because somebody will have to pay back the principal, even if there are no interest payments due.
——————————————————————————————————
War Is Coming And The Global Financial Situation Is A Lot Worse Than You May Think – Michael Snyder
13 juli
On the surface, things seem pretty quiet in mid-July 2016. The biggest news stories are about the speculation surrounding Donald Trump’s choice of running mate, the stock market in the U.S. keeps setting new all-time record highs, and the media seems completely obsessed with Taylor Swift’s love life. But underneath the surface, it is a very different story. As you will see below, the conditions for a “perfect storm” are coming together very rapidly, and the rest of 2016 promises to be much more chaotic than what we have seen so far.
Let’s start with China. On Tuesday, an international tribunal in the Hague ruled against China’s territorial claims in the South China Sea. The Chinese government announced ahead of time that they do not recognize the jurisdiction of the tribunal, and they have absolutely no intention of abiding by the ruling. In fact, China is becoming even more defiant in the aftermath of this ruling. We aren’t hearing much about it in the U.S. media, but according to international news reports Chinese president Xi Jinping has ordered the People’s Liberation Army “to prepare for combat” with the United States if the Obama administration presses China to abandon the islands that they are currently occupying in the South China Sea…
——————————————————————————————————
The reluctant defaulter: A tale of high government debt – Fabrice Collard, Michel Habib, Jean-Charles Rochet 13 juli
Since the Global Crisis, sovereign debt levels have exploded in many OECD countries. This column presents a new measure of government debt – maximum sustainable debt. This measure takes account of the fact that a shortfall in growth naturally increases the probability of default, while allowing for the possibility of rollover. Applications to recent data suggest that without sufficient institutional constraints, governments will generally borrow up to a level close to the maximum that can be sustained.
——————————————————————————————————
Taking the blinders off – How private credit rating agencies reinforce global economic instability—and what we can do about it – pt 1 – Susan Schroeder
13 juli
The role that credit rating agencies played in the global financial crisis is no secret. One memorable scene in The Big Short depicted an employee of Standard & Poor’s (S&P)—one of the “big three” rating agencies, with Moody’s and Fitch—as being blinded by conflict of interest in her evaluation of mortgage-backed securities. In a visual gag, she is depicted as having just come from the eye doctor, wearing literal blinders as she is quizzed by the film’s protagonists about how S&P could give the highest ratings—AAA—for securities based on bundled subprime mortgages. “If we don’t give the ratings, they’ll go to Moody’s, right down the block.”
——————————————————————————————————
Taking the blinders off, pt2 Instability in Capitalist Economies – Susan Schroeder
14 juli
A market economy is not completely unpredictable—it does have gravitational tendencies, such as a tendency towards a falling rate of profit. Those tendencies are created by the day-to-day activities of firms and consumers, and are further shaped by the contexts in which they are embedded, such as institutional configurations and social norms.
What is the source, then, of instability in capitalist economies? It emanates from firms’ quest for profit. Capitalism runs on profit. To enhance their profits, firms adopt production techniques that lower their per-unit production costs. As this occurs, each firm’s structure of production changes relative to industry norms. Firms that use lower proportions of labor relative to other inputs are deemed to be more efficient and will earn a better rate of return on their capital than firms that do not adapt. Firms also switch from one industry to another, or enter new industries, in a quest for higher returns. Firms must change in these ways in order to survive, and thrive, in a competitive market economy.
——————————————————————————————————
Taking the blinders off pt3 Beyond Credit Rating – Susan Schroeder
15 juli
The beauty of mainstream economics, which assumes the inherent stability of markets, is that, if markets work well, the public interest aligns with the interests of private agents. In this view, then, the key policy objective is to improve the efficiency of markets. But if markets are inherently unstable, the interests do not align. In this context, increased government presence to promote a more stable economy and financial system is what promotes the public interest.
——————————————————————————————————
Sovereign and banking risk: Completing the union and breaking the loop – Giorgio Barba Navaretti, Giacomo Calzolari, Alberto Franco Pozzolo
15 juli
Eurozone countries are facing a stalemate in the completion of the Banking Union, at the heart of which is the regulation of banks’ sovereign exposures. This column introduces the latest issue of European Economy, which examines the interactions between banks and sovereign risk, the build up of sovereign risk during the crisis, and the policy proposals on the table to severe the loop and, more broadly, to finally complete the Banking Union.
——————————————————————————————————
***Risk On/Risk Off: What Schizophrenic Markets Are Telling Us – Charles Hugh Smith
11 juli
These trends cannot be reversed with yet another rate cut or another “whatever it takes” announcement.
In the conventional investment perspective, risk-on assets (i.e. investments with higher risks and higher potential returns) such as stocks are on a see-saw with risk-off assets (investments with lower returns and lower risk, such as Treasury bonds). When risk appetites are high, institutional managers and speculators move money into stocks and high-yield junk bonds, and move money out of safe-haven assets such as gold and U.S. Treasuries.
But recently, markets are no longer following this convention. Safe haven assets such as precious metals and Treasuries are soaring at the same time that stock markets bounced strongly off the post-Brexit lows.
Risk-on assets (stocks) rising at the same time as safe-haven assets is akin to dogs marrying cats and living happily ever after.
What the heck is going on?
——————————————————————————————————
Stocks Will Crash – and Crush (California’s) Pension Funds & Taxpayers: Report – Wolf Richter
14 juli
The California Policy Center published an interesting study – “interesting” in all kinds of ways, including its outline of the doom-and-gloom future of California’s state and local pension plans if stocks turn down sharply, preceded by its prediction that stocks will turn down sharply because valuations are totally unsustainable.
The huge, simultaneous, Fed-engineered rallies in stocks, bonds, and real estate – typically the three biggest holdings of state and local pension funds in the US – have inflated the balance sheets of these funds, thus elegantly, if only partially, papering over their fundamental problems. Most of these funds have a similar doom-and-gloom future when the asset bubbles get pulled out from under them. Plenty of pension funds don’t even need a market correction: they’re already in serious trouble despite the asset bubbles.
——————————————————————————————————
***Middle class’ used to denote comfort and security. Not anymore – Alissa Quart
7 juli
Precariousness is not just a working-class thing. In recent interviews, dozens of academics and schoolteachers, administrators, librarians, journalists and even coders have told me they too are falling prey to an unstable new America. I’ve started to think of this just-scraping-by group as the Middle Precariat.
The word Precariat was popularized five or so year ago to describe a rapidly expanding working class with unstable, low-paid jobs. What I call the Middle Precariat, in contrast, are supposed to be properly, comfortably middle class, but it’s not quite working out this way.
——————————————————————————————————
The Bears Are Back – Oil Slides On Negative Sentiment – Nick Cunningham
11 juli
After oil prices rallied more than 80 percent between February and June, WTI and Brent have fallen back more recently, dropping from above $50 to just $45 per barrel. Oil traders are searching for more clarity on what to expect next, but the cacophony of data pointing in different directions is leading to confusion for analysts and speculators.
On the bullish side for oil prices is Citigroup, which published a research note on Monday saying that it is “especially bullish” on commodities in 2017. Citi says that the oil markets continue to balance, and the concerns over global economic growth are not as important as the demand trajectory. Moreover, the crash in oil prices has forced the industry to make cuts that will only sow the seeds of the next boom. “The oil market is treading water for now, but the oil price overshot to the downside earlier this year and this is clearly setting the stage for a bullish end to the decade,” Citi analysts, led by Ed Morse, said.
——————————————————————————————————
The economics of Brexit: Pre-referendum videos and columns on VoxEU.org – Richard Baldwin
12 juli
The UK’s referendum on membership of the European Union is now history. But looking forward, it is useful to see how economists entered the debate. This column covers the highlights of VoxEU’s pre-Brexit efforts to disseminate research findings to a wider audience. It is, in a sense, a ‘playlist’ of pre-referendum columns and Vox Videos.
——————————————————————————————————

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.