Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 15 belangrijke of informatieve artikelen en interviews die vooral 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. Er zijn in deze rubriek altijd verschillende economische scholen vertegenwoordigd, en we streven er naar die diversiteit te handhaven.

We nemen wekelijks 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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Why the Central Bank “Bailout of Everything” Will Be a Disaster – Daniel Lacalle
24 juni
Despite massive government and central bank stimuli, the global economy is seeing a concerning rise in defaults and delinquencies. The main central banks’ balance sheets (those of the Federal Reserve, Bank of Japan, European Central Bank, Bank of England, and People’s Bank Of China) have soared to a combined $20 trillion, while the fiscal easing announcements in the major economies exceed 7 percent of the world’s GDP according to Fitch Ratings.
This is the biggest combined stimulus plan in history. However, businesses are closing at a record pace and unemployment has reached extremely elevated levels in many countries.
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Cutting labour taxes brings back the jobs lost to COVID-19 – Christian Bredemeier, Falko Juessen, Roland Winkler
28 Juni
The COVID-19 crisis has disproportionately affected different occupations in the labour market. Workers in contact-intensive and personal-service oriented sectors bear the brunt of the COVID-19 recession, but blue-collar workers suffer heavy job losses as well. This column uses a multi-sector, multi-occupation macroeconomic model to study how different fiscal stimulus measures can boost aggregate demand and help the economy recover faster. It finds that a cut in taxes on labour income outperforms other stimulus plans in promoting job creation for those who lost their jobs in the COVID-19 downturn.
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Business Uncertainty About Sales Goes Haywire – Wolf Richter
24 juni
These Charts Show What Mess Businesses Face Going Forward.
I’m going to show you a chart based on data that the Atlanta Fed released today. We’ll dissect it in a moment. The chart would be funny, if it weren’t so serious. At first, just look at the chart superficially. These results are based on surveys of businesses of a wide variety of sizes, spread across all sectors of the economy (except agriculture and government), in all regions of the US. They’re asked about their own businesses, in terms of sales, employment, and capital investment over the next 12 months. And the chart also shows how uncertain the participants are about their own expectations.
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Why Central Banks Are a Threat to Our Savings – Frank Shostak
25 juni
The US personal savings rate jumped to 33 percent in April from 12.7 percent in March and 8 percent in April last year. An increase in savings is regarded by popular economics as less expenditure on consumption. Since consumption expenditure is considered as the main driving force of the economy, obviously a rebound in savings, which implies less consumption, cannot be good for economic activity, so it is held. Saving and wealth—what is the relation?
To maintain their life and well-being, individuals require access to consumer goods. An increase in various consumer goods permits an increase in individuals’ living standards. What allows an increase in the production of consumer goods is the maintenance and the enhancement of the infrastructure of an economy. With better infrastructure, a greater quantity and better quality of consumer goods could be generated and more real wealth can be produced.
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COVID-19: Putting the Chinese policy reaction into context – Robert Gilhooly, Carolina Martinez, Abigail Watt
22 Juni
China has implemented a wide range of measures to support the economy through the ongoing coronavirus shock. This column examines China’s policy response, and suggests that the recent loosening in financial conditions should support activity over the next six to nine months, but it will only be at best half that seen in 2016 and a third of that after the Global Crisis given the relative change in financial conditions thus far. Moreover, the policy levers are at best only 40% of that deployed during the Global Crisis. This contrasts with the approach of many other countries, which have reacted more aggressively to the coronavirus shock.
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Massive Credit Losses to Hit European Banks in Q2 and into 2021, Particularly When Debt Moratoriums Are Lifted – Nick Corbishley
23 juni
But the ECB went into high gear to soothe the pain of the banks.
The second quarter results of most large Western European banks will reveal further increases in expected credit losses as the economic outlook has “weakened substantially since the publication of 1Q20 results”, Fitch Ratings warns in its latest “Large European Banks Quarterly Credit Tracker.” This will put substantial pressure on the sector’s operating profitability.
European banks already had a profitability problem before this crisis began. The last time that average return on equity (ROE) in the sector reached the 10% threshold, which is broadly considered a healthy minimum, was in 2007, when the shares of European banks were at the highest level they have ever been. Since then, the average ROE of European banks has not come even close to regaining that level.
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Central Bankers Will Bring Us Economic Stagnation – Sam Peterman
22 juni
“Our country continues to face a difficult and challenging time….People have lost loved ones. Many millions have lost their jobs. There is great uncertainty about the future. At the Federal Reserve, we are strongly committed to using our tools to do whatever we can, for as long as it takes…to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy” –Jerome Powell, Chairman of the Federal Reserve, June 10, 2020
America is hurting. From a pandemic to a recession and mass unemployment to social unrest over the sadly still-present systemic racism in our institutions, our country’s future feels extraordinarily uncertain. Jerome Powell speaks to this above, and he is leading the Federal Reserve in taking an active role to try and mitigate the uncertainty. Perhaps the most important way in which the Fed is trying to mitigate uncertainty is through committing to near-zero interest rates for the foreseeable future. In his speech last week, Powell noted that there is no time horizon in which the Fed sees itself moving rates higher than zero and forecast 2022 as the earliest possible date for a rate hike. If the Federal Reserve persists with zero (or negative) interest rates for the foreseeable future, the American economy will be condemned to stagnation—like Europe and Japan before it—as capital flows away from productive investment and toward ever increasing debt payments.
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***Is Data Our New False Religion? – Charles Hugh Smith
23 juni
In the false religion of data, heresy is asking for data that is not being collected because it might reveal unpalatably unprofitable realities.
Here’s how every modern con starts: let’s look at the data. Every modern con starts with an earnest appeal to look at the data because the con artist has assembled the data to grease the slides of the con.
We have been indoctrinated into a new and false religion, the faith of data. We’ve been relentlessly indoctrinated with the quasi-religious belief that “data doesn’t lie,” when the reality is that data consistently misleads us because that is the intent.
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A Collapsing Dollar And China’s Monetary Strategy – Alasdair Macleod
25 juni
This article describes how China can escape the fate of a dollar collapse by tying the yuan to gold. There is little doubt she has access to sufficient gold. Currently, her interest is to preserve the dollar, not destroy it, because it is the principal means of Chinese foreign interests being secured .
Furthermore, a return to sound money requires China to reverse its interventionism under Xi, returning to Deng Xiaoping’s original vision. Sound money can only last if the relationship between the state and the wider economy is properly addressed.
Of all the major economies, China’s is best placed to implement a sound money solution. At the moment it seems unlikely the necessary reforms will be forthcoming; but a general collapse of the global fiat currency regime presents the opportunity for reassessment and change.
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How We Arrived At The Globalist Calls For A “Great Reset” – Steven Guiness
25 juni
The unveiling on June 3rd by the World Economic Forum of ‘The Great Reset‘ agenda appears on the surface to be a newly devised concept created directly in response to Covid-19. As it turns out the first soundings of a ‘reset‘ were actually made as far back as 2014.
To appreciate the significance of the WEF’s intervention, it is important first to recognise the years leading up to 2020 and how they laid the foundations for where we are today.
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World Trade Plunges. Here’s Why it’s Even Worse in Reality: China’s Deep-Fake Data Comes to Light – Wolf Richter
27juni
But the downturn in the goods-based sectors started in 2018. US exports are now down 37% from that peak, imports down 25%.
World trade in goods plunged by 12% in April from March, after having already dropped 2.4% in March from February. This plunge of the Merchandise World Trade Monitor, released by CPB Netherlands Bureau for Economic Policy Analysis, was by far the largest month-to-month drop in the history of the data going back to 2000. Compared to April last year, the index was down 16.2%.
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The Fourth Bubble – Instability & The Problem Of Debt – Lance Roberts
26 juni
It didn’t take long. Over the last several years, we have discussed the risk of excessive monetary policy inflating a bubble in a variety of assets from debt, to real estate, to stocks. In March, it appeared as if the bubble had finally popped. However, the Fed’s quick response and massive monetary interventions ceased the asset bubble’s deflation and reinflated it.
The idea of another bubble was put forth recently by Jeremy Grantham of GMO fame:
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***The Depression Dominoes Are Toppling – Charles Hugh Smith
25 juni
Once you allow your economy to become dependent on extremes of debt, leverage, inequality, legalized looting, monopoly, pay-to-play politics and speculative asset bubbles, a depression is inevitable.
The pandemic lockdown will be blamed for the Greater Depression, but the lockdown only toppled all the dominoes that were already lined up. The lockdown would have been survivable if the economy hadn’t been over-indebted, over-leveraged, burdened by insanely high costs, stripmined by greedy monopolies, dependent on stock market fraud, destabilized by extreme inequality, corrupted by political pay-to-play and addicted to speculation.
The apologists always blame depressions on central banks not printing money fast enough, while overlooking the real drivers: debt, high costs and dependence on speculative bubbles. As noted here many times, revenues and income can quickly slide lower, but debt must be serviced regardless of revenues and income.
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Fundamentals & Reality Are Making Their Presence Felt – Sven henrich
27 juni
An eventful week in markets and the economy as the month and quarter are coming to a close next week.
The broader market peaked on June 8th on the heels of unprecedented central bank intervention but has since failed to make new highs other than the Nasdaq. Any subsequent efforts by the Fed to stave off any market sell off via the announcement of individual corporate bond buying 2 weeks ago or this week’s announcement to relax the Volcker rule for banks have produced nothing but short lived bounces in markets leading to lower highs and further selling in equities.
Fundamentals and reality are making their presence felt. The reopening of the US economy is hampered by violent spikes in coronavirus infections in some part of the US leading to delayed reopening in some cases raising questions about the veracity of any V shape recovery in the economy as lay off announcements keep mounting globally.
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“Stressed All The Time” – Millennials/Gen Z-ers See Job Mobility Plunge – Tyler Durden
27 juni
The Deloitte Global Millennial Survey 2020 found nearly half of all Gen Z and millennial respondents were stressed during the COVID-19 pandemic as job mobility declined.
The survey reveals that close to half (48%) of Gen Z and 44% of millennial respondents said they’re stressed all or most of the time.
“Pandemic-related shutdowns have hit these generations hard, especially younger members. Almost 30% of Gen Zs and a quarter of younger millennials (25–30 years old) who took our pulse survey in late April or early May reported either losing their jobs or having been placed on temporary, unpaid leave. At that point, about one in five millennials around the world had been put out of work,” the study said.
Origins of the stress are directly related to the virus-related socio-economic collapse, resulting in one of the deepest recession, if not, depression, since the 1930s. The labor force is severely damaged, with tens of millions of unemployed and recovery that could take several years.
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***Visualizing The COVID-19 Impact On Advertising Spend – Tyler Durden
26 juni
Before the COVID-19 outbreak, global advertising investment was estimated to grow at a 7.1% clip in 2020.
Now, as Visual Capitalist’s Katie Jones notes, global ad spend is estimated to see a brutal contraction of 8.1% – equating to almost $50 billion – as a result of changing consumer behavior. The total loss becomes a bleak $96.4 billion when taking pre-pandemic growth forecasts into account.
Today’s graphic uses data from the World Advertising Research Center (WARC) to visualize the estimated decline in advertising spend by media format and industry.
As advertisers adapt to rising in-home media consumption, the tug-of-war for ad dollars between online and traditional media seems to have a decisive winner.
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Macroeconomic analysis – Dirk Niepelt
22 Juni
Notoriously inconclusive policy recommendations and the failure to foresee the Great Recession have caused many commentators to voice doubts about the usefulness of macroeconomics. This column argues that macroeconomics can offer a coherent framework to understand and evaluate policy options, but macroeconomists need to explain the field’s subject matter and findings better to both policymakers and the general public. A new textbook aims at closing the gulf between macroeconomic research and widespread misconceptions about it by providing a concise and rigorous introduction to modern macroeconomic theory.
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***Plagued Retail: My View from the Trenches – John McNellis, Principal at McNellis Partners
25 juni
We’ve lost half-dozen retailers — restaurants, clothing, massage… Tenants who in effect said, sue me, I’m taking a hike. And replacement shop tenants are just behind spotted owls on the endangered species list.
“I have 2 options that are non-negotiable. I’m going bankrupt (chapter 7). Covid happened and I cannot survive. I’d rather not go through bankruptcy because it ruins my credit, but if I have no choice, I won’t think twice. The second option is to let you keep my deposit, and take what I have in the bank which is around 10k. Again this is non-negotiable. That is all I freakin have.”
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From Smoot-Hawley to ‘America first’ and ‘strategic sovereignty’ – Koen Berden, Joseph Francois, Fredrik Erixon
26 Juni
Calls for more protectionism have been on the rise for some time now, and have surged again with the Covid-19 pandemic. This column points to similar policies and their negative consequences during the Great Depression. Discussing similarities and differences of the economic situation between then and now and drawing on lessons from the Great Depression, it highlights the very negative consequences of increasing protectionism.
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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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