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EMU will stop

Critics from Britain rightly argue that the monetary union is failing because of a divergence of economic performance. There are now backstops in place but they will not stop member states drifting further apart. 

The solution is at the very least a central authority in charge of banking and finance, a small budget and some joint debt instruments. 

If politics does not allow this, you have to accept the adage that if something is not sustainable it will come to an end.

Wolfgang Münchau, FT 24 July 2016

Stein's Law: If something cannot go on for ever it will stop. 

Herbert Stein The Public Interest nr 97 Fall 1989


US inflation-linked bonds snapped up by investors

Prospect of economic growth encourages purchase of $13bn of securities

Mutual and exchange traded funds that invest in Tips have seen six straight weeks of positive inflows

FT 22 July 2016

Fiscal austerity is going out of fashion

Mr Trump has caught the policy mood, not just in America but also across the western world. 

For the Cleveland convention is certainly not the only place where fiscal austerity is going out of fashion.




In late 2008 Queen Elizabeth II famously asked why no one had seen the downturn coming.

In late 2008, during a briefing at the London School of Economics, Queen Elizabeth II famously asked why no one had seen the downturn coming.

For economists employed in the financial sector, there is an implicit bias towards optimism. 

As one once told me "There is no incentive to forecast a recession, If you are wrong, you'll be fired. And if you're right, no one will thank you." 

Or as Keynes put it,

Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.

Buttonwood, The Economist 21 July 2016

About The Queen at IntCom

About The Queen at IntCom


Wolf: The remedies they /Trump Le Pen/ offer are bogus. But the illnesses are real.

Real income stagnation over a longer period than any since the war is a fundamental political fact

If governing elites continue to fail to offer convincing cures, they might soon be swept away and, with them, the effort to marry democratic self-government with an open and co-operative world order.

Martin Wolf FT  19 July 2016

What is the “stall speed” of an economy?
Unemployment tends to rise when GDP growth falls below about 2.5-3 per cent
Gavyn Davies blog June 15, 2011


The Economist: Deutsche Bank trades at about a quarter of the notional value of its net assets.

If it were a non-financial firm it would be broken up. 

But big banks cannot be dismantled without risking chaos.

The Economist 16 July 2016

The Stoxx 600 index of European financial institutions fell 5.6 per cent on Monday
Deutsche Bank led a rout in global bank stocks
FT 8 Febr 2016

Korekiyo Takahashi and Helicopter Money

Bank of Japan: a distant whirring sound
Helicopter money is more effective, so it’s bad news for bond holders

As well as disrupting the market, bidding ever higher prices for bonds renders more costly the ultimate, paradoxical denouement of the policy, when inflation finally arrives, causing yields to rise and bond prices to crash. 

Really credible stimulus should avoid this.

FT 18 July 2016

As the policy debate intensifies, investors might spare a thought for Korekiyo Takahashi, 
Bank of Japan governor from 1911 to 1913. 

The ghost of Takahashi haunts Abenomics
Edward Chancellor examines the similarities between Japan’s current economic situation and that of the 1930s

Republican Platform Unexpectedly Calls For A Return To Glass-Steagall

a law which was repealed under President Bill Clinton, husband of, well you know...

While we know better than to trust politician promises, we were surprised to read that today the GOP joined the Democrats in calling for a repeal of Gramm-Leach-Bliley, the Financial Services Modernization Act of 1999 pushed through by none other than Bill Clinton, 

and will seek a return to Glass-Steagall, the banking law launched in 1933 in the aftermath of the Great Depression meant to prohibit commercial banks from engaging in the investment business, and which according to many was one of the catalysts that led to the Global Financial Crisis.

According to The Hill, Paul Manafort, Donald Trump's campaign manager, told reporters gathered in Cleveland Monday that the GOP platform would include language advocating for a return of that law, which was repealed under President Bill Clinton, husband of, well you know...

Zerohedge 18 July 2016

The 1933 Glass-Steagall Act separated commercial and investment banking.... more


"Marit Paulsen har en förmåga att låta absolut trovärdig oavsett vad hon säger" Enander

Hon lät lika övertygande som socialdemokrat som hon efter 1998 gjorde som folkpartist.

Själv skulle jag, ärligt talat, inte ens köpa en begagnad bil av Marit Paulsen. Hennes övertygande röst till trots. Detta var, sa hon, hennes sista offentliga framträdande. 

Tja, vi får väl se, tänker jag.

Crister Enander, HD Kultur 17 juli 2016

Full text

Om Marit Paulsen hos IntCom

Marit Paulsen om Murens fall: 
Omprövningens tid! Det är med stor osäkerhet jag försöker beskriva ett slags förvirring, rent av en smula hjälplöshet inför det som händer i Östeuropa.
Vart tog alla drömmar vägen? Vart är alla de ORD jag har använt? Var är de begrepp jag tänkt i?
Marit Paulsen i TCO-Tidningen nr 2/1990

De ryska ungdomarna tycks vara mycket tränade att uppfatta det icke klart uttalade, de reagerar kvickt, den snackige håller andan en sekund:
Säg inte - don’t say - don’t say - att vi rest till det demokratiska Sverige och kommit till en kommunistfamilj?
· Nä ,nä - inte så heller.
"Säg att ni RÖSTAR frivilligt på kommunisterna, då hänger jag mig!"Tjaa. Vad säga? Tiotusen ord skulle behövas, timmar av samtal och det som finns till förfogande hos alla i köket är en mer eller mindre knackig engelska

Släpp in Balkan och Turkiet Byt kronan mot euron DN-ledare 2009-09-19

Euron har för länge sedan bevisat sin styrka.

Läs mer här 


The Dogs Have Barked and the European Caravan Must be Stopped

The Dogs Have Barked and the European Caravan Must be Stopped 

– A short history of  where we are, how we got here and what we do next

Bill Cash, The European Journal Nov-Dec 2007


Monetary policy is but one factor in the grand economic equation and should certainly not be the most important one Mauldin

We shouldn’t have to talk about central banks and their leaders every time we discuss the economy. 

Monetary policy is but one factor in the grand economic equation and should certainly not be the most important one. Yet the Fed and its fellow central banks have been hogging center stage for nearly a decade now.

That might be okay if their policies made sense, but abundant evidence says they do not. 

Overreliance on low interest rates to stimulate growth led our central bankers to zero interest rates.

John Mauldin 16 July 2016

The European Central Bank’s grand plans have not brought Southern Europe back from depression-like conditions. Italy Mauldin

I cannot state this strongly enough: Italy is dramatically important, and it is on the brink of a radical break with European Union policy that will cascade into countries all over Europe and see them going their own way with regard to their banking systems. 

Italian politicians cannot allow Italian citizens to lose hundreds of billions, if not trillions, of euros to bank “bail-ins.”

John Mauldin 16 July 2016