For many investors, the regret of missing out on what may well be a once-in-a-generation bull market overshadows any anxiety about the next crash. Animal spirits are all too evident. Amin Rajan FT 16 March 2018
Once-silent intellectuals are starting to challenge the core assumption of EU ideology, indicting the project for moral vandalism and a reckless attack on the democratic nation state.
Theorists and professors are proclaiming the virtues of the nation – the precious liberal nation, inspired by the universal and redemptive values of the French and American revolutions – in a way we have hardly heard in recent times.
They defend it as the only real vehicle of democracy known to man.
No empire in history has ever been democratic. And the problem with soft empires is that they remain soft only until they meet resistance.
At that point they must persist with a despotic logic – and we saw flashes of that in the eurozone crisis
When lenders make credit more available or more affordable, households respond by taking on debt, which drives up aggregate demand – that is, until the music stops.
Amir Sufi, Atif Mian, Project Syndicate 5 March 2018
Amir Sufi, Professor of Economics and Public Policy at the University of Chicago Booth School of Business, is the co-author of House of Debt.
Atif Mian is Professor of Economics, Public Policy, and Finance at Princeton University, Director of the Julis-Rabinowitz Center for Public Policy and Finance at the Woodrow Wilson School, and co-author of House of Debt.
US experienced its last annual trade (goods) surplus in 1975.
In all, it cumulates to about $15 trillion more of stuff America bought versus what it sold to the rest of the world since 1975
Even when you throw in the $4 trillion surplus on the services account ( tourism, transportation, insurance, royalties and business services) during the same 43-year period, the deficit on current account with the rest of the world is still $11 trillion, and that's in then-year dollars.
Inflated to 2017 purchasing power, the balance with the rest of the world since 1975 is well larger than the current GDP of the US.
"flush with cash from the tax cut", US companies are heading for a "stock buyback binge of historic proportions". Corporate stock buying is now cranking at a $1 trillion annual rate or nearly double the rate of the last several years.
We had a close encounter yesterday during an appearance on CNBC. The thirty-something anchors were shocked to hear that Washington's upcoming $1.8 trillion 2019 Treasury borrowing might generate a resounding "yield shock", thereby upending the current huge stock market bubble where 4%+ bond yields are most definitely not priced in. The younger of the anchors (age 32) thought the $1.8 trillion was not a problem... Likewise, the senior anchor further averred that we've been there before and that "awhile back" $1 trillion dollar deficits were absorbed with ease. To little avail, of course, we pointed out that "awhile back" came at the bottom the Great Recession when private investment had collapsed and the Fed and other central banks had been running their printing presses red hot. David Stockman 28 February 2018
In normal times it’s reasonable to believe clients are concerned about how well a manager can handle a downturn. “But in a bubble, forget it,” he says. “Clients care much, much more about underperforming all their friends on the golf course.” Institutional Investor 28 Fabruary 2018
It is also the case for the US Federal Reserve, which has turned to unconventional monetary policies to support the real economy via so-called wealth effects. Over the past 35 years, America has /been/ running balance-of-payments deficits every year since 1982 (with a minor exception in 1991, reflecting foreign contributions for US military expenses in the Gulf War).