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Richard Swartz: EU har funnit sig i att Grekland aldrig kommer att kunna (eller vilja) betala tillbaka sina skulder.

Alla miljarderna har gått upp i rök. 

Fast av principiella och framför allt inrikespolitiska skäl kan man inte säga det öppet, eftersom det vore detsamma som att peka ut den som kommer att bli tvungen att ta hand om notan: de europeiska skattebetalarna. 

Richard Swartz, kolumn DN 22 oktober 2016


The return of Keynesianism, Sandbu about Yellen speech

- Its modest focus — it is titled “Macroeconomic research after the crisis” — is deceptive.

Beyond useful research recommendations, Yellen’s words carry more profound implications, 

including an admission of the extent to which central bankers are navigating in the dark, 

and a return to much more aggressive policies for demand management than modern macroeconomic theory had until recently admitted.

Read more here


Now, some strategists and investors think that the linkers — inflation-linked government bonds — trade is back on.

Société Générale has reiterated its call for clients to load up on inflation-proofed bonds, on the view that even modest global fiscal stimulus and rising commodity in the coming year will accelerate price growth further. Bargain prices is an additional bonus.

“You can buy inflation [protected bonds] on the cheap, but conventional bonds are extremely expensive,” says Alain Bokobza, head of global asset allocation at SocGen.

FT 20 October 2016


Excellent article by John Authers about Why bond yields are so low

FT 20 October 2016

Also by Authers:

City of London’s most famous bear, Albert Edwards of Société Générale, asked this week whether the three-decade bond bull market was finally over. 

As he is known for his “Ice Age” thesis, which holds that bond yields will continue falling amid sluggish economic conditions, it was startling to many that he even asked the question.

FT 20 October 2016


Otmar Issing Euro EMU: "One day, the house of cards will collapse,”

“Realistically, it will be a case of muddling through, struggling from one crisis to the next. It is difficult to forecast how long this will continue for, but it cannot go on endlessly," he told the journal Central Banking in a remarkable deconstruction of the project.

Ambrose Evans-Pritchard, Telegraph 16 October 2016


Tett: How can anyone make sense of today’s markets?

One of the smartest answers came from Axel Weber, former head of the Bundesbank, now chairman of UBS.

Western banks now have far more spare liquidity and capital. “If you look at pre-crisis, you could run a global bank on 1 or 2 per cent of core tier one capital,” Mr Weber told Fox TV in Washington. “Now most of the banks are well above 10 per cent.”

The issue that investors need to understand now is that many “markets” are not true market not true, free, markets because of heavy government intervention.

To my mind, this point needs to be proclaimed with a megaphone.

Gillian Tett, FT 14 October 2016

Gillian Tett serves as US managing editor. She writes weekly columns for the Financial Times, covering a range of economic, financial, political and social issues.

In 2014, she was named Columnist of the Year in the British Press Awards and was the first recipient of the Royal Anthropological Institute Marsh Award. In June 2009 her book Fool’s Gold won Financial Book of the Year at the inaugural Spear’s Book Awards.

Tett’s past roles at the FT have included US managing editor (2010-2012), assistant editor, capital markets editor, deputy editor of the Lex column, Tokyo bureau chief, and a reporter in Russia and Brussels.

Gillian Tett, av alla människor, gör en pudel. Hur har hon kunnat ha fel om EMU?


IMF is right about debt relief to Greece, FT

IMF has argued stridently that /Greece/ needs relief on the fiscal and debt front in order to generate growth. 

The IMF is right. 

Greece has made some notable changes to its economy, albeit from an extremely dysfunctional base. 
But structural reform is generally contractionary in the short to medium term. 

It needs to be accompanied by supportive fiscal policy. 

FT Editorial 11 October 2016

Coppola about The necessary arrogance of elites

And as with “serious” music, when economics becomes so divorced from reality that it fails adequately to explain the real world in which people live, people reject it. 

People rightly ask why academic economists failed either to predict or adequately explain the financial crisis, whereas heterodox economists working in the real economy – many of them untrained in formal economics – not only predicted it but correctly identified the causes. 

There is a real danger that the anger people feel over what they see as the failure of mainstream economics leads to rejection of mainstream economics in its entirety and, importantly, withdrawal of funding for academic economic research. This, I feel, would be a mistake.

Frances Coppola, 27 JULY 2012

Economic theory discredited at IntCom