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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Comparability of Basel risk weights in the EU banking sector is questionable – Zsofia Doeme, Stefan Kerbl
24 januari
Risk weights define each bank’s minimum capital requirements, but many doubt the comparability of the risk weights that banks report. This column quantifies the variability of these weights across banks, and finds that the country where a bank is headquartered creates statistically significant and economically important differences. Model output floors, as recently agreed upon by the Basel Committee, would reduce this unintended risk weight heterogeneity.
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Bond Market’s “Inflation Expectations” Highest since 2014 – Wolf Richter
28 januari
What’s going on is a sell-off in the Treasury market.
On Friday, the government bond market’s “inflation expectations” rose to the highest level since September 2014. Quite a feat, considering that six months ago, economists were clamoring for the Fed to slow down its already glacial pace of rate hikes – or abandon them altogether – because of “low inflation.”
The Treasury market’s “inflation expectations” show up in the premium that investors demand for buying regular 10-year Treasury Securities over 10-year Treasury Inflation Protected Securities (TIPS). TIPS compensate investors for the loss of purchasing power due to inflation. The principal of TIPS increases at the rate of the annual Consumer Price Index, which effectively protects the principal from inflation to the extent measured by CPI.
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The macroeconomic performance paradox: A new model – Wendy Carlin, David Soskice
23 januari
Following the post-financial crisis recession, the UK and other high-income countries have experienced slow growth and stagnant productivity, along with both low inflation and, more recently, low unemployment. This column introduces an intuitive macroeconomic model that helps explain this puzzling combination.
Macroeconomics is in a period of creative destruction, as is clear from the collection of papers in the Oxford Review of Economic Policy’s 2018 double issue on Rebuilding Macroeconomic Theory.
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Can China Really Dethrone the Dollar? – Daniel Lacalle
24 januari
If there is something ironic, it is that, whatever happens, politicians always think that money is their monopoly.
The data for 2016 of the BIS (Bank of International Settlement) show a very different reality from the one that the European, Japanese, and Chinese central banks want us to see. The US dollar is not only the most traded currency in the world but its use has increased since 2013 from 87% to 87.6% of global transactions.
The euro not only continues to be a global anecdote but its use has fallen since 2013, from 33% to 31% of transactions. Remember that the sum of all the transactions that the BIS calculates is 200% because each monetary transaction includes a pair in another currency.
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Looking behind China’s GDP curtain – Georg Magnus
22 januari
The country’s new GDP report states that the economy grew by nearly 7 per cent last year—but can we trust the figure?
Last week the Office for National Statistics reported that it has over several years underestimated the fall in prices in the telecommunications sector, the implications of which, including for GDP, are significant. Credit to the ONS for admitting its errors and making amends. Contrast this, though, with China’s systematic exaggeration and manicuring of its own GDP figures, which matters because of the country’s significance in the world economy and for key markets.
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Visualizing Real Inflation – A Decade Of Grocery Prices For 30 Common ItemsProfile picture for user – Tyler Durden
27 januari
Over the span of 2000-2016, the amount of money spent on food by the average American household increased from $5,158 to $7,203, which is a 39.6% increase in spending.
Despite this, as Visual Capitalist’s Jeff Desjardins notes, for most of the U.S. population, food actually makes up a decreasing portion of their household spending mix because of rising incomes over time. Just 13.1% of income was spent on food by the average household in 2016, making it a less important cost than both housing and transportation.
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A Brief (and Messy) History of Modern Gold Standards – Marcia Christoff-Kurapovna
25 januari
Although gold prices hit a new high in mid-January, Americans, by and large, are still reluctant about gold. They don’t quite “get it.” This incomprehension is different than that of Americans not “getting,” for example, bitcoin (as few seem to). They may understand gold as a safe haven that has always stood the test of time, war, crises, inflation, etc. Some also understand that no gold proponent advocates harkening back to a mythical 19th century gold hey-day (one that did not exist — certainly not consistently), or recommends re-issuing gold minted currency, or reverting to any kind of bimetallism (the 19th century norm).
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***Mastercard Pushes Biometrics, Banks Follow – Don Quijones
25 januari
Biometric authentication “will be of great benefit to everyone.”
Mastercard has set a deadline for widespread use of biometric identification for its services across the whole of the EU: April 2019. Mastercard Identity Check, currently available in 37 countries, enables individuals to use biometric identifiers, such as fingerprint, facial, and iris recognition, to verify their identities when using a mobile device for online shopping and banking. The technology is not mandatory for customers, but from next year it will be vigorously promoted throughout the EU and many consumers will welcome it.
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Central Banks Put a Safety Net Under Financial Markets – Thorsten Polleit
26 januari
Most early business cycle indicators suggest that the global economy is pretty much roaring ahead. Production and employment are rising. Firms keep investing and show decent profits. International trade is expanding. Credit is easy to obtain. Stock prices keep moving up to ever higher levels. All seems to be well. Or does it? Unfortunately, the economic upswing shows the devil’s footprints: central banks have set it in motion with their extremely low, end in some countries even negative, interest rate policy and rampant monetary expansion.
Artificially depressed borrowing costs are fueling a “boom.” Consumer loans are as cheap as never before, seducing people to increasingly spend beyond their means. Low interest rates push down companies’ cost of capital, encouraging additional, and in particular risky investments – they would not have entered into under “normal” interest rate conditions. Financially strained borrowers – in particular states and banks – can refinance their maturing debt load at extremely low interest rates and even take on new debt easily.
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***Trend reversal of old-age labour force participation in Germany – Axel Börsch-Supan, Irene Ferrari, Nicolas Goll, Johannes Rausch
26 januari
Retirement ages in industrialised countries have been rising over the last three decades as more people work later into their lives. This column focuses on Germany, examining this trend and the contributing factors. Despite comparable trends in health, educational attainment, and spouse’s labour force participation, these three factors do not appear to explain the rise in retirement age. Instead, changes to public pension rules seem to be the key driver.
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Central Banks: From Coordination to Competition – Charles Hugh Smith
22 januari
This is one reason why I anticipate “unexpected” disruptions in the global economy in 2018.
The mere mention of “central banks” will likely turn off many readers who understandably have little interest in convoluted policies and arcane mumbo-jumbo, but bear with me for a few paragraphs while I make the case for something to happen in 2018 that will impact us all to some degree.
That something is the decay of the synchronized central bank stimulus policies that have pumped trillions of dollars, yuan, yen and euros into the global financial markets over the past nine years. Here are two charts that depict the “tag team” coordinated approach central banks have deployed: when one CB tapers its stimulus, another ramps up its money-creation/asset-purchases stimulus:
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Fannie Mae, the Goldman Goose that Keeps on Laying Eggs – Wildfry
26 januari
Why is Fannie Mae Offering Goldman Sachs et al. Such Fat Margins on Defaulted Mortgages?
Much of the attention on Fannie Mae has been focused on the potential merger with Freddie Mac; the repayments on the Treasury’s $187 billion of senior preferred stock; and the new equity cushion concession to ensure that the accounting loss in 2017, triggered by the new tax law, does not force Fannie Mae to draw on its funding lines with the Treasury Department.
But even as Fannie Mae’s exposure to mortgage backed securities (MBS) has grown to over $3 trillion, it has quietly taken its portfolio of directly held mortgages from $789 billion at the end of 2010 to $236 billion by November 2017 under a mandate from the FHA:
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***“It Just Gets Worse And Worse”: A Record 32% Of Used Car Trade-Ins Are Underwater – Tyler Durden
27 januari
We have frequently written about the unsustainable trends in new car sales in the United States created by the combination of lower rates, easing underwriting standards and voracious demand for new securitizations by wall street and pension funds that will do just about anything for an extra 20bps of yield.
This week we find that according to the latest Edmunds’ data, many of the same problems also afflict the used auto market. The most startling takeaway from the report is that the percentage of used cars being traded in with negative equity values – which means that dealers lenders are willing to accept an immediate loss for new transactions – continues to rise and currently stands at an all-time high 32.4%, up from under 20% in 2009. Moreover, the average balance of the negative equity also continues to rise and stood at a record $5,130 last year, up over a quarter from $4,075 a decade earlier.
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***How to Halve the Cost of Residential Solar in the US– Andrew Birch
5 januari
After 10 years running Sungevity, I recently completed a tour visiting solar companies in and around the U.S., Europe, Asia and Australia. I am pleased to report the residential solar industry is thriving around the world — everywhere except right here in the U.S.
The reason for this is startlingly simple: American consumers are being charged over two times more for solar than is the average consumer overseas. That’s USD $10,000 more for a typical 5-kilowatt residential solar system. The panels are the same — so what on earth is going on?
The answer: red tape.
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