Economische aanraders 20-11-2016
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.
The Pressing Problem Nobody Dares Discuss – Charles Hugh Smith
17 november 17
Perceptions may well change when the global illusions of solvency and “growth” collapse in a heap.
The list of pundits jostling for air time to add their two cents to discussions of hot-button issues such as immigration is endless. The airwaves and social media are overflowing with people wanting to comment on hot-button social issues, but when it comes to the the one truly critical dynamic that will shape the future–everyone’s strangely silent.
The reason nobody dares address this problem is that it has no solution within the current mode of production, i.e. the status quo. The problem is an oversupply of labor.
Trump’s Election May Strain the Euro to the Breaking Point – Thorsten Polleit
Many would not have discounted the notion that financial markets would take kindly to the announcement that Donald J. Trump won the election. But when the news broke on 9 November that he will indeed be the 45th president of the United States of America, prices on international stock exchanges climbed, the US dollar exchange rate soared, and interest rates went up.
All this suggests that international financial markets’ take on Trump’s presidency is much more cheerful than the gloomy outlook many would have predicted. Mr. Trump has made no bones about his thoughts on US foreign and economic policy, but it remains to be seen if and how he will put these thoughts into action.
It seems Mr. Trump has no truck with the ranks of the globalists who, in their efforts to establish a new world order, have entangled the US in one ill-fated overseas adventure after another. Perhaps US foreign policy will change on his watch; it may well become far less aggressive. If Mr. Trump strikes a conciliatory tone in particular in his dealings with Russia, a more cooperative relationship could help deescalate conflicts in hotspots, say in the Middle and Far East.
What “The Worst Bond Rout In 15 Years” Means For Stocks – Tyler Durden
In light of the dramatic spike in interest rates since the Trump victory, where as we reported yesterday and as Bloomberg comments overnight, “yields on benchmark 10-year Treasuries posted their steepest back-to-back weekly increase since 2001” leading to the “the worst rout in the fixed-income universe in 15 years”…
***Wall Or No Wall: Trump Needs The Mexican Oil Industry – Irina Slav
Two of Donald Trump’s main pledges during the presidential race were building a wall along the border with Mexico, and making the U.S. energy-independent. Now that the election is over, these issues are coming to the fore.
First, the president-elect said that the wall, which he mentioned on the campaign trail and in numerous debates, is still very much on the table, though what type of “wall” that may be is an unknow. Second, he said he planned to start deporting illegal aliens—those with criminal records—which could amount to as many as three million individuals.
Despite “The Wall”, the deportation of Mexican citizens, and several grandiose comments about Mexico paying for said wall—not to mention Trump’s proclamation that he would raise import tariffs up to 35 percent on some Mexican products—Mexico’s President Enrique Pena Nieto was among the first of the world leaders to congratulate Trump on his victory.
And if NAFTA is no more, tariffs will rise for all imports. What does all this mean for the future of oil imports to the U.S.?
***Who’ll Get Hit by Fallout from the $11-Trillion Commercial Property Bubble in the US? – Wolf Richter
It’s the banks they’re worried about.
Warnings about the loans, bonds, and commercial-mortgage-backed securities (CMBS) tied to the vast $11-trillion commercial property sector in the US have been hailing down for months. Moody’s Investor Services just warned about the rising delinquency rate of some $360 billion in CMBS it rates. Delinquencies of 60+ days jumped from 4.6% last year to 5.6% in September.
A higher global risk premium and the fall in equilibrium real interest rates – Kevin Daly
There is an increasing consensus that global ‘excess saving’ has contributed to a reduction in equilibrium real interest rates. This implies a decline in yields of all assets including, but not restricted to, government bond yields. This column argues that since the turn of the century, the global economy has also been characterised by a rise in the yields on quoted equity, a feature for which the standard excess saving story cannot easily account. A separate explanation is that an increase in the global risk premium has increased the wedge between risk-free interest rates and the real required return on risky investments.
France Won’t Be Following the UK Out of the EU – Bill Wirtz
Since the Brexit vote in the UK there has been a lot of speculation concerning the next countries to leave the European Union. France is being repeatedly named in those lists. There are several reasons why France is not likely to leave the EU any time soon.
While British politicians are fairly unpopular in Brussels, French MEPs make up the core of the political groups and their messages, especially those who have pushed political integration and centralization. Joining the EU bureaucracy is considered to be a capstone to a successful political career, and a chance to be considered a “real” statesmen.The French political class is quite committed to the EU project.
The economic impact of reducing non-performing loans – Maria Balgova, Alexander Plekhanov
The major increase in the volume of non-performing loans as a result of the recent financial crisis was predictable, but the persistence of this bad debt is a cause for concern. Using a sample of 100 countries, this column compares economic outcomes in three different scenarios following a rise in non-performing loans. Reducing these loans has an unambiguously positive medium-term effect, with countries that experience an influx of fresh credit growing the fastest. Allowing high levels of non-performing loans to persist, on the other hand, can cost more than two percentage points of economic growth annually.
The Great Con: Political Correctness Has Marginalized the Working Class – Charles Hugh Smith
So when the protected class of well-paid institutional “progressives” speak darkly of “reversing 40 years of social progress,” what they’re really saying is we’re terrified that the bottom 95% might be waking up to our Great Con of identity politics and political correctness.
To understand the Great Con of political correctness, we must first grasp the decline of the working class (self-described as “the middle class”), i.e. those who must sell their labor to earn their livelihood.
Labor’s share of the national economy has been declining for 46 years:
Bank of England Trips over London House-Price Bubble, Hilarity Ensues – Wolf Richter
“Landlords have been unable to raise rents…”
The legendary, magnificent, frequently discussed, and all-in-all mind-blowing house price bubble in Prime London finally came to the attention of the Bank of England. On its blog, “Bank Underground,” this discovery comes with a big-fat caveat:
Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.
I get it. It’s not official. In official circles at the BOE, the house price bubble in Prime London and other parts of London, for that matter, is still dormant.
Nevertheless, the blog post shows some of the marvelous aspects of this creation of central-bank policies, Russian-oligarch money, the adjacent City of London financial district, and other influences.
Unwinding of the pound carry trade – Ashoka Mody
Between the first quarter of 2013 and the end of 2015, London property prices rose rapidly, the exchange rate appreciated, and the current account deficit widened. This column argues that the rise of the pound was in fact a financial bubble, riding on a property price-exchange rate carry trade.This unsustainable bubble was deflated by Brexit.
India’s Long Road to Growth – Trisha Mani
In recent decades, India has become a frontrunner in global politics representing a powerful bloc of emerging economies that are characterized by high growth rates and an untapped reservoir of human capital. It plays a crucial role in influencing international markets as its borders encapsulate not only some of the brightest minds in a wide array of specialties but also an increasingly unrestricted market that welcomes innovation and celebrates novelty. This historic transformation however came as a reaction to the centuries of colonial exploitation followed by severe stagnation in the decades succeeding independence. By the end of the 20th century, the Indian economy embraced the indispensable and almost inevitable reformation that led to increased economic development.
The time is up! A realistic proposal to end Greece’s debt overhang – Chris Marsh, Dominik Nagly, George Pagoulatos, Elias Papaioannou
It is now seven years since the Greek crisis began. As well as reflecting the chronic deficiencies of its own institutions, the failings in Greece also reflect substantial shortcomings in international institutions. This column argues that it is time for all sides to move on, and proposes a simple debt operation for Greece that can deliver debt sustainability with minimal adjustments to the ESM operating procedures.
***Is Microsoft Purposefully Degrading/Crashing Internet Explorer to Bully Users into Upgrading to Windows 10 & Edge? – Wolf Richter
Desperate measures to solve a festering market-share debacle?
Having spent years burning through any remaining goodwill among its users still clinging to Internet Explorer, Microsoft is apparently having problems getting them to use its Edge browser that is part of Windows 10. Even after about 15 months and three upgrades, the market share of Edge is still minuscule.
Why Economic Recovery Requires Rethinking Capitalism – Mariana Mazzucato
In 2008, Queen Elizabeth II went to the London School of Economics to open a new academic building. The British Monarch has made it a life’s work to avoid saying anything contentious in public, but this time she had a question for the economists: Why had they not seen the financial crash coming?
Her question went to the heart of two huge failures of modern economics: the near collapse of some of the world’s major economies; and the faith in an orthodox economic framework that offered no explanation for what was happening. The thesis of my new book Rethinking Capitalism: Economics and Policy for Inclusive and Sustainable Growth, co-edited with Michael Jacobs, is that these two failures are intimately related. The failure by policy-makers to fully understand the dynamics of the capitalist system not only leads to periodic crises; it also leads to the wrong remedies, such as the pro-cyclical austerity that has only deepened and prolonged the crisis in many countries.
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.