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 eerste (twee) alinea’s hier gegeven zijn.

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*** The Devil’s Holiday Letter: 2015 – Charles Hugh Smith
19 december
Through means I am unable to disclose, I have obtained a copy of the Devil’s Christmas letter. Yes, Satan too sends a Yule letter, and no, I was not on his mailing list. I think Satan’s Holiday cheer should give us all pause.
“To my fallen angels Beelzebub, Lucifer and Leviathan, princes of Hell’s demons, and to my minions, lackeys, toadies and sycophants on Earth:
Due to the high cost of postage, please accept this miserly digital version of my holiday missive.
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*** European Dream Turns into Dystopian Nightmare – Don Quijones
14 december
As a Europhile British ex-pat who has spent most of his adult life living on “the continent,” as we Brits are fond of calling the non-British part of Europe, it might seem rather odd to be encouraging my fellow Brits to vote to leave the European Union.
Not so long ago — perhaps a decade or so — I believed that the interests of Britain would be best served if the country was a full-fledged member not only of the EU but of the euro zone. I was wrong, but it was a different time and I was a different, more innocent me.
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The Dreary Utopia of the Socialists – David Gordon
14 december
Jason Brennan, a remarkably prolific libertarian political philosopher, has a good eye for the essence of an argument. He puts this ability to effective use in Why Not Capitalism? In the book he challenges the defense of socialism in Why Not Socialism? by G.A. Cohen, whom Brennan rightly considers “the leading Marxist philosopher — and one of the leading political philosophers, period — of the past 100 years.”
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Basel regulation: Friend or foe of small business lending? – Dennis Bams, Magdalena Pisa, Christian C. P. Wolff
16 december
Small businesses are the engine of innovation and job creation, and Basel regulation acknowledges their special role and discounts the capital requirements for loans to small firms. This column argues that the Basel requirements overstate the riskiness of small businesses, and that retail exposures are a much safer investment than previously thought. By forcing banks to hold a disproportionately higher amount of capital against such loans, Basel can unintentionally harm lending to small private firms.
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The coming wave: Where emerging market investors will put their money – George Andrew Karolyi, David Ng, Eswar Prasad
12 december
Few economists understate the importance of emerging market economies in terms of world GDP and global growth prospects. This column asks where the future of emerging markets’ investments lie. Where investors have focused in the past and institutional path dependency are important determinants of emerging markets’ allocation of international investment portfolios. This has implications for the geographical distribution of emerging markets’ portfolio investments, a force to reckon with in international financial markets.
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“Perverse, Unpredictable Effects” of Negative Interest Rates: Mortgage Rates Soar in Switzerland – Wolf Richter
16 december
Negative interest rates – called “punishment interest” in Germany – have morphed from sheer impossibility to solid reality in Europe. Having seen how they work, the Bank of Canada has invoked them now, and Fed Chair Janet Yellen, has put them “on the table” before a House of Representatives committee.
In Europe, after they became established as the latest method of flogging savers until their mood improves, all kinds of absurdities saw the light of the day. For example, bailed-out national governments can now fund their deficits at negative rates, extracting money from their bondholders, rather than paying them. Perhaps the coolest notion was that banks would be “paying your mortgage.”
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Did “Tight” Fed Policy Cause the Financial Crisis? -Robert P. Murphy
16 december
Recently Senator Ted Cruz aggressively questioned Janet Yellen on the Fed’s possible role in causing the financial crisis and subsequent recession. In particular, he claimed that “in the summer of 2008” the Fed “told markets that it was shifting to a tighter monetary policy,” and that this announcement “set off a scramble for cash, which caused the dollar to soar, asset prices to collapse, and CPI [growth — RPM] to fall below zero, which set the stage for the crisis.” Cruz asked Yellen if she agreed with Bernanke’s view from his new book, in which he says the Fed made a mistake by not cutting rates in September 2008.
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Money Velocity Is Crashing–Here’s Why – Charles Hugh Smith
17 december
The inescapable conclusion is that Fed policies have effectively crashed the velocity of money.
That the velocity of money has been crashing while the money supply has been exploding doesn’t seem to bother the mainstream pundits. There is always a fancy-footwork explanation of why whatever is crashing no longer matters.
Take a look at these two charts and tell me money velocity doesn’t matter. First, here’s money supply: notice how money supply leaped from 2001 to 2008 as the Federal Reserve pumped liquidity and credit into the economy, and then how it exploded higher as the Fed went all in after the Global Financial Meltdown.
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The Important Role Of Recessions – Lance Roberts
16 december
My friend and colleague, Michael Lebowitz of 720 Global Research, recently penned a response to Larry Summers commentary on the economy’s weakened ability to withstand higher interest rates. To wit:
“In his Dec. 7 op-ed, ‘Before the next recession,’ Lawrence Summers correctly said the economy’s weakened ability to withstand higher interest rates is based on the fact that lower rates in the past have pulled forward demand for goods and services, thereby leaving less demand in the future. This holds true for personal consumption, but, just as important, low rates have allowed weak, unproductive companies to stay in business and continue producing. Put these two factors together and one realizes the economy is plagued with weak demand and oversupply. Anyone who has taken a basic college economics course knows that translates into lower prices and weaker economic growth.
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“Alarming” Chinese Beige Book Reveals Dire Economic Situation, Fewest Profitable Companies On Record – Tyler Durden
18 december
It’s notoriously difficult to get a read on the health of China’s economy.
The ambiguity is in large part attributable to the NBR’s tendency to goalseek the data in order to ensure that growth remains in line with the Party’s “targets.” To be sure, virtually no one believes the official numbers and when it comes to GDP, the situation is complicated by what we’ve called Beijing’s deficient deflator math, which causes China to habitually overstate economic growth during times of rapidly falling commodity prices.
Although sellside estimates are useless (the Street is effectively forced to produce forecasts they know are erroneous because trying to estimate actual output in China would mean missing the “official” mark every single time) we can get a decent approximation of how the country is really doing by looking at the Li Keqiang index, which tracks electricity consumption, rail cargo, and loans.
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Why Has the Labor Participation Rate Plunged? – Charles Hugh Smith
15 december
Combine this regulatory burden with the decline of entrepreneurship, and you get a bubbling brew that is toxic to self-employment/small business.
Why has the percentage of the population that’s in the work force declined so dramatically? It’s a question many have asked, and Gordon T. Long and I attempt to answer in our most recent video program The Participation Rate Mystery–Solved.
Why does the Participation Rate matter? Intuitively, we all understand that the lower the participation rate (i.e. the percentage of the population with a job or actively looking for a job), the greater the tax burden on the remaining workers.
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Carnage in US Natural Gas as Price Falls off the Chart – Wolf Richter
18 december
The price of natural gas in the US has gotten completely destroyed. The process started in July 2008, at over $13 per million Btu and continues through today, at $1.77 per million Btu.
In between, natural gas traded at prices that, for much of the time, didn’t allow drillers to recoup their investments, leading to permanently cash-flow negative operations, and now huge write-offs and losses, defaults, restructurings, and bankruptcies.
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The Regressive Fed – Kessler
17 december
In a move that defines the word ‘irony’ better than the dictionary does, the Federal Reserve raised rates just five hours after their own Industrial Production series was released showing an almost certain entry into a US recession (see chart below).
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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.