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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Minimal conditions for the survival of the euro – Barry Eichengreen, Charles Wyplosz
14 maart
The Eurozone crisis has shown that monetary union entails more than just sharing monetary policies. This column, first published on 12 February 2016, identifies four minimal conditions for solidifying the monetary union. In the case of fiscal policy, this means a decentralised solution. In the case of financial supervision and monetary policy, centralisation is unambiguously the appropriate response. In the case of a fourth condition, debt restructuring, either approach is possible, but the authors prefer a solution that involves centrally restructuring debts while allocating costs at national level.
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*** China Ocean Freight Indices Plunge to Record Lows – Wolf Richter
14 maart
Money is leaving China in myriad ways, chasing after overseas assets in near-panic mode. So Anbang Insurance Group, after having already acquired the Waldorf Astoria in Manhattan a year ago for a record $1.95 billion from Hilton Worldwide Holdings, at the time majority-owned by Blackstone, and after having acquired office buildings in New York and Canada, has struck out again.
It agreed to acquire Strategic Hotels & Resorts from Blackstone for a $6.5 billion. The trick? According to Bloomberg’s “people with knowledge of the matter,” Anbang paid $450 million more than Blackstone had paid for it three months ago!
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The New New ‘Deal’ – “Markets Are Too Important To Be Left To Investors” – Ben Hunt
16 maart
In the second half of 2014, export volumes in every major economy on Earth began to decline, the result of divergent monetary policies that crystallized with the Fed’s announced tightening bias in the summer of 2014. This decline in trade activity – which is far more impactful than a decline in trade value, because it means that the global growth pie is structurally shrinking – accelerated in 2015 and 2016 as Europe and Japan intentionally devalued their currencies to protect their slices of the global trade pie. In game theoretic terms, Europe and Japan have been “free riders” on the global system, using currency devaluation to undercut the prices of competing US and Chinese products in a way that avoids domestic political pain.
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The long-run employment effects of the minimum wage: A putty-clay perspective – Daniel Aaronson, Eric French, Isaac Sorkin
19 maart
Economists these days tend to think that a minimum wage can be a useful policy tool for reducing poverty while leaving employment numbers intact, as long as the policy is well designed. This column looks at recent evidence from a new perspective and claims that much of the recent research suggesting that minimum wage hikes barely reduce the number of jobs in the short run should be taken with caution. The longer-run disemployment effects are potentially large.
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*** To Oppose Free Trade Is To Embrace Violence – Ryan McMaken
18 maart
Supporting free trade is simply a matter of taking no action when another person exchanges in non-violent exchange with another person. That person may be right down the street, or that person may be in another country somewhere. No “free trade agreements” or other paperwork of any kind is required.
To oppose free trade, on the other hand, is to engage in the imposition of fines, prison terms, and other sanctions on people for engaging in non-violent exchange.
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Why Our Financial System Is Like the Titanic – Charles Hugh Smith
15 maart
The “unsinkable” global financial system is rushing headlong toward its encounter with the iceberg.
Why did the Titanic sink, despite being considered unsinkable? The conventional answer is the design of its watertight compartments was flawed: the watertight bulkheads were limited in height to a few feet above the waterline.
The ship was designed such that if the first few compartments were flooded, the flooding would be contained by the watertight bulkheads.
But the iceberg ripped open a gash almost a third the ship’s length, flooding the first six compartments. As the ship’s bow sank, water poured over the bulkhead into the seventh compartment, and so on, until the ship’s bow sank deep enough to bring the ship almost vertical, at which point the hull broke roughly in half–hence the two hull sections discovered on the bottom of the Atlantic in 1985.
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The Terrible Oil News Nobody Noticed – Matt Badiali
16 maart
A terrible bit of news went unnoticed in the commotion amid the modest rebound in oil prices over the past two weeks. While every news outlet shouted about Iran and OPEC, a U.S. energy icon quietly announced news that could potentially shatter the industry.
As I’ve explained recently, many oil companies are teetering on the brink of bankruptcy. But news out of Alaska could lead to disaster.
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Moodys: Public Pension Underfunding to Worsen as Returns Lag – Yves Smith
18 maart
We’ve had plenty of company in warning that protracted central bank policies, ZIRP, QE, and most important, that those represent negative real interest rates, are deadly to banks and long-term investors like pension funds and life insurers.
As a result, one of the things we’ve discussed regularly with CalPERS is how it is continuing to defend the indefensible, namely, its assumption that it will earn 7.5%. It rejected a plan by Governor Jerry Brown to have the giant pension fund lower its return target to 6.5% in return for a cash injection. Instead, CalPERS came up with a convoluted scheme to lower its return…maybe someday. From Reuters last November:
Calpers will reduce its expected rate of investment returns in years after the fund outperforms its 7.5 percent target by 4 percentage points. The goal is to ultimately reduce the rate to 6.5 percent, although that could take decades under the new policy….
In July, CalPers announced that after years of steady returns it missed the 7.5 percent target, returning just 2.4 percent for the fiscal year ended June 30.
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Unreported assets held abroad and tax evasion: Hints from external statistics – Valeria Pellegrini, Alessandra Sanelli, Enrico Tosti
14 maart
Balance of payments statistics suggest that assets held abroad are greatly underestimated – particularly for mutual fund shares and bank deposits. This column looks into the role played by tax havens and estimates that unreported financial assets amount to between $6 and $7 trillion. On this figure, the related tax evasion is between $19 and $38 billion a year on capital income, and between $2 and $2.6 trillion on personal income. Recent policy initiatives such as automatic information exchanges constitute real progress, but some critical aspects might jeopardise their effectiveness.
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We Need the Pain that Comes with More Saving – Jay Engel
16 maart
The endgame of monetary side manipulations is upon us. Since 2008, central banks have done what they thought was needed to bring the markets back from the pain they experienced during the crash. The problem, of course, is that these Keynesians and Monetarists placed the high level of stock markets as the goal of “policy” and confused booming asset levels with economic growth.
The enemy of prosperity, in the eyes of global economic policymakers, is the desire of the consumer to save and businesses to refrain — even in the short term — from investment. As such, their “solution” was the very poison that has infected the Western world over the decades: more credit, lower costs of money, more push for “consumer demand.”
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Budgetary surprises: Fiscal costs of contingent liabilities – Elva Bova, Marta Ruiz Arranz, Frederik Toscani, Elif Ture
15 maart
A contingent fiscal liability is a potential obligation for the government that depends on a possible future event. Understanding the origin, size, and triggers of these liabilities is increasingly important. This column presents new findings using a novel dataset of 200 episodes involving the materialisation of contingent liabilities. The fiscal costs of the liabilities are large, at 6% of GDP on average. Importantly, countries with stronger institutions and lower growth volatility tend to suffer less from contingent liability realisations.
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How to Escape the Purgatory of Minimum Wage/Part-Time Jobs – Charles Hugh Smith
17 maart
In the age of automation, what’s scarce are problem-solving skills.
Readers responded positively to my recent essay on the emerging economy and jobs: A Teachable Moment: to the Young Person Who Complained About Her Job/Pay at Yelp and Was Promptly Fired
Many young people are stuck in the purgatory of minimum wage and/or part-time jobs: that raises the question: how do you get out of minimum-wage purgatory?
The conventional answer is, “get another college degree.” Perhaps this once had some value, but this now yields rapidly diminishing returns due to supply and demand: everyone else seeking an escape from low-wage/part-time purgatory is pursuing the same strategy, so there is an oversupply of over-credentialed job seekers.
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A Strange Pattern Emerges When Trading The US Dollar In 2016 – Tyler Durden
19 maart
One of the more surprising market developments of 2016 has been the violent obliteration of those who had taken part in the biggest consensus trade of 2015, namely long the USD. As the Fed finally admitted earlier this week, the US economy is sputtering and is woefully incapable of handling 4 rate hikes, or 3 for that matter. In fact, the Fed will be lucky to push through even one more rate hike without the Chinese Yuan collapsing and unleashing even more capital outflows (which precipitated the major market swoons in the summer of 2015 and early 2016) arguably the main topic during the alleged Shanghai G-20 “central bank accord.” The result: this week saw the biggest two-day USD collapse against a basked of foreign currencies in years, and currently the DXY is trading at a lower level than a year ago.
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Negative Interest Rate Conundrum – C.P. Chandrasekhar
17 maart
Across the developed world the persistence of a phenomenon that was initially seen as a freak occurrence—negative interest rates—is now a cause for concern. One form the tendency takes is for central banks to set their policy rates, which signal their monetary stance, below zero. The process was triggered by the European Central Bank (ECB). Under pressure to forestall deflation in the region, the ECB reduced its deposit rate to (minus) 0.1 per cent in June 2014. Since then, according to the Bank for International Settlements (BIS), till January 2016 four national central banks, from Denmark, Sweden, Switzerland and Japan, have moved the interest ‘paid’ on part of their deposits with them to negative territory.
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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.