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.

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Failing banks, bail-ins, and central bank independence: Lessons from Cyprus – Panicos Demetriades
21 februari
Europe’s new framework for resolving banks includes a ‘bail-in’ mechanism that aims to ensure that banks’ shareholders and creditors pay their share of costs, and which was first used to resolve the 2013 banking crisis in Cyprus. This column, written by the economist who was the country’s central bank governor at the time, examines the unintended consequences of the bail-in, which have proved more toxic than could ever have been imagined, and not just in Cyprus. Several euro area central banks and their governors have found themselves in the eye of political and legal storms when taking actions to resolve failing banks and/or restore stability in their banking systems.
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US Gross National Debt Spikes $1 Trillion in Less Than 6 Months – Wolf Richter
24 februari
And these are the good times.
As of the latest reporting by the Treasury Department, the US gross national debt rose by $41.5 billion on Thursday, February 22, to a grand total of $20.8 trillion.
Here’s the thing: On September 7, 2017, five-and-a-half months ago, just before Congress suspended the debt ceiling, the gross national debt stood at $19.8 trillion.
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A Strong Euro Is A Headache for the ECB – Daniel Lacalle
24 februari
In recent weeks, the euro has been at its highest level, relative to the US dollar, that we’ve seen in the last three years. This is a movement that surprises when the European Central Bank is carrying out the most aggressive monetary expansion in the world after the Bank of Japan.
A strong euro is not a problem for any European citizen. European households keep a large part of their financial wealth in deposits. Additionally, a strong euro curbs inflation in imported products, mainly energy and food, generating a significant wealth effect.
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***“Cash Must Not Be Made the Scapegoat” – Don Quijones
22 februari
In the War on Cash, a rare defense of physical money by an ECB Board Member.
The proposed EU-wide cash restrictions could come into effect as early as this year. But defenders of physical cash have an unexpected ally in their struggle: Yves Mersch, a member of the European Central Bank’s executive board. In a speech hosted by the Bundesbank last week, the Luxembourgian central banker exalted cash’s value as legal tender and heaped scorn on the oft-heard argument that its anonymity only helps criminals.
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Slok on QE, and a great paper – John H. Cochrane
24 februari
DB’s Torsten Sløk writes in his regular email analysis:
Yesterday I participated in the annual US Monetary Policy Forum here in Manhattan, and the 96-page paper presented concluded that we don’t really know if QE has worked. This was also the conclusion of the discussion, where several of the FOMC members present actively participated. Nobody in academia or at the Fed is able to show if QE, forward guidance, and negative interest rates are helpful or harmful policies.
(..)
These lovely paragraphs encapsulate well the academic and industry/policy view, and the tension in the former.
I’m interested by the latter tension: Industry and media commenters are deeply convinced that the zero interest rate and QE period had massive effects on financial markets, in particular lowering risk premiums and inflating price bubbles.
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Foreign exchange interventions: Frequent and effective – Marcel Fratzscher, Lukas Menkhoff, Lucio Sarno, Tobias Stöhr
23 februari
Central bank interventions in foreign exchange markets have long been viewed with scepticism by academics. This column examines foreign exchange interventions for a sample of 33 advanced and developing economies. Interventions occur frequently, in episodes that can last several days, and are often successful in smoothing exchange rates. These results show that central bankers, particularly in emerging markets, appreciate the efficacy of interventions.
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RBS Forgery Scandal Metastasizes Days before Crucial Earnings Report – Don Quijones
20 februari
The bailed-out megabank hasn’t had a year in the black since 2007.
Two weeks ago, UK mega-lender Royal Bank of Scotland (RBS) was accused by whistle-blowers of systematically forging customer signatures — that it had indeed trained staff to forge customers’ signatures — which elicited furious denials from senior management. But as we warned at the time, if irrefutable evidence emerges of forged documents, not only will management have to walk back those denials but the bank, which has already cost taxpayers €90 billion in bailouts, losses, fines, and legal fees, could end up facing yet another round of costly legal action.
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Treasury Proposes Dubious, Untested Chapter 14 Bankruptcies for Too Big to Fail Banks – Yves Smith
22 februari
The Trump Treasury has proposed changing Dodd Frank rules, supposedly to make resolving Too Big to Fail banks easier.
The Treasury yesterday proposed replacing the resolution scheme under Dodd Frank, called the Orderly Liquidation Authority, confusingly also called Title II liquidations, with a new type of bankruptcy, Chapter 14. While there was a lot not to like about the OLA, Chapter 14 is no better and in key respects, markedly worse.
The costly fallacy underlying Chapter 14 is the idea that big banks can be wound up without a taxpayer backstop. And despite Treasury’s chest thumping that taxpayer monies won’t be at risk, in fact, government funding is still available if needed.
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The End of (Artificial) Stability – Charles Hugh Smith
21 februari
The central banks’/states’ power to maintain a permanent bull market in stocks and bonds is eroding.
There is nothing natural about the stability of the past 9 years. The bullish trends in risk assets are artificial constructs of central bank/state policies. As these policies are reduced or lose their effectiveness, the era of artificial stability is coming to a close.
The 9-year run of Bull-trend stability is ending as a result of a confluence of macro dynamics:
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How Long Before Rising Inflation Leads To A Recession: Deutsche Bank Answers – Tyler Durden
24 februari
While inverse vol funds were the immediate catalyst for the February 5 market crash, the market’s recent jittery behavior has coincided, and often been blamed on, the recent uptick in inflation. That said, as Deutsche Bank’s Binky Chadha writes, whether this was cause and effect is debatable. Nonetheless, late in the business cycle with a tight labor market, “strong coordinated growth”, a lower dollar, higher oil prices and a fading of one off factors, all point to inflation moving up.
As a result, two key questions have emerged: What does higher inflation mean for equities? And how long until higher inflation translates into a recession.
Here, Deutsche Bank makes some preliminary observations. First, and conceptually, higher inflation is ambiguous.
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Surging Freight Costs Fire Up Inflation Fears – Wolf Richter
23 februari
“Pricing power has erupted…”
The transportation industry, particularly trucking, has benefited from the rise in retail spending in the fourth quarter and in much of 2017. The surge in e-commerce with all the transportation challenges it brings along has been a boon for the industry. Shipments have soared, rates have soared, dollars spent by shippers have soared: companies have been complaining about rising shipping costs and are trying to pass on those costs via higher prices on their goods. But here’s what that looks like from the transportation and trucking industry’s point of view: a view from Cloud Nine.
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On the link between US pay and productivity – Anna Stansbury, Lawrence H. Summers
20 februari
Since 1973, there has been divergence between labour productivity and the typical worker’s pay in the US as productivity has continued to grow strongly and growth in average compensation has slowed substantially. This column explores the causes and implications of this trend. Productivity growth appears to have continued to push workers’ wages up, with other factors to blame for the divergence. The evidence casts doubt on the idea that rapid technological progress is the primary driver here, suggesting rather that institutional and structural factors are to blame.
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How Central Banks Stoke Stock Price – Thorsten Polleit
23 februari
Reading through Security Analysis, the roadmap for investing first published in 1934 by Benjamin Graham and David L. Dodd, I learned something quite interesting: The basis of stock valuation had changed quite drastically in the period between 1927 and 1929. The stock buying public “departed more and more from the factual approach and technique of security analysis and concerned itself increasingly with the elements of potentiality and prophecy”, write Graham and Dodd.
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***Venezuela’s New Cryptocurrency: Just Another Form of Control Fraud – Charles Hugh Smith
23 feburari
If a currency can’t be converted on demand into the underlying commodity, it’s not “backed by oil,” it’s just another form of control fraud.
The broke and broken country of Venezuela appears to be the first nation-state to issue a cryptocurrency token (the petro) as a means of escaping the financial black hole that’s consuming its economy: Maduro Launches Oil-Backed Crypto “For The Welfare Of Venezuela”.
For context, here is a chart of the black market (i.e. real-world) value of the Venezuela’s fiat currency, the bolivar: a 100,000 bolivar note is worth somewhere around 40 cents USD (US dollar), i.e. near zero. (Venezuela maintains a fantasy-official USD/bolivar exchange rate that has no relation to the actual purchasing-power value of Venezuela’s fiat currency.)
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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.

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