Meeting Minutes vom 28/2

Siehe anliegend.

Föhrenberg-Kreis Financial Economy III 11-02-28

The 9 billion-people question

The world’s population will grow from almost 7 billion now to over 9 billion in 2050. John Parker asks if there will be enough food to go round

A special report on feeding the world

The Economist, Feb 24th 2011 | from the print edition

THE 1.6-hectare (4-acre) Broadbalk field lies in the centre of Rothamsted farm, about 40km (25 miles) north of London. In 1847 the farm’s founder, Sir John Lawes, described its soil as a heavy loam resting on chalk and capable of producing good wheat when well manured. The 2010 harvest did not seem to vindicate his judgment. In the centre of the field the wheat is abundant, yielding 10 tonnes a hectare, one of the highest rates in the world for a commercial crop. But at the western end, near the manor house, it produces only 4 or 5 tonnes a hectare; other, spindlier, plants yield just 1 or 2 tonnes.

Broadbalk is no ordinary field. The first experimental crop of winter wheat was sown there in the autumn of 1843, and for the past 166 years the field, part of the Rothamsted Research station, has been the site of the longest-running continuous agricultural experiment in the world. Now different parts of the field are sown using different practices, making Broadbalk a microcosm of the state of world farming.

Nassim Taleb, America finds fools to buy its bonds

Nassim Taleb, fragile investments at this time, January 2011:

The American budget deficit is worse than that of Greece …the fact that you can find some fool to buy your bonds so far may cease ….the Chinese have so far 2 trillion and we need a trillion to borrow …

Ökonomen blamieren sich mit Arbeit zum Euro-Rettungsfonds

Falsche Zahlen

FTD, 28/2

Exklusiv Es waren 190 deutsche Professoren, die sich vor einigen Tagen gegen eine Ausweitung des Euro-Rettungsfonds stellten. Nach FTD-Recherchen arbeiteten sie mit falschen Zahlen. von André Kühnlenz  , Mathias Ohanian, Berlin und Wolfgang Proissl  Frankfurt

190 deutsche Professoren, die sich vergangene Woche gegen eine Ausweitung des Euro-Rettungsfonds gestellt haben, sind nach Recherchen der Financial Times Deutschland mehreren Fehlern aufgesessen. Kurioserweise ergeben neuste Schätzungen von Mitinitiator Hans-Werner Sinn, Chef des Ifo-Instituts, dass die Kapazitäten des Rettungsschirms den gesamten Finanzierungsbedarf Irlands, Portugals und Spaniens bis 2013 gerade einmal um zwölf Prozent übersteigen.

Die Professoren schreiben dagegen, dass das „,AAA‘-fähige Volumen des Rettungsschirms“ den gesamten Refinanzierungsbedarf dieser Länder bis 2013 um fast 80 Prozent übersteige. Bei internationalen Experten stößt der Vorstoß zudem inhaltlich auf heftige Kritik.

Rund 300 deutsche Wirtschaftswissenschaftler haben sich dem vom Hamburger Professor Bernd Lucke ins Leben gerufene „Plenum der Ökonomen“ angeschlossen. Die jetzt vorgelegte Stellungnahme zur Euro-Krise ist ihre erste Veröffentlichung.

  Hans-Werner Sinn, Präsident des Ifo-Institut

When Irish Eyes Are Voting

John Mauldin, 27/2

Most of the world is focused on the Middle East and Libya, and rightly so. We will look at that in a minute. (Sidebar: the White House spelled the country “Lybia” in a recent tweet. Can you imagine what the liberal media would have done to poor Dan Quail if that tweet was from him? Just saying.) And I agree the Middle East is important. But my eyes are focused on what I think is the far more important event of the day, and that is the election going on in Ireland.

I have written about Ireland before, but we need to once again focus on what are not smiling Irish eyes. Ireland was once the envy of Europe, with one of the highest growth rates in the world. It was not long ago that Ireland could borrow money at lower rates than Germany. Now rates are 6% and likely to rise with the new government. Let’s look at a few data points from a brilliantly written article by Michael Lewis, who ranks as one of my favorite writers. When he writes, I read it just for the education on what great writing should look like, as well as for the always fascinating information. The article is at http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103 .

(I am often asked about how you can become a financial writer by young people who are starting out. I have just two suggestions. Write a lot and then write some more. Writing is no different than the piano or guitar. It takes a lot of practice, and then more practice. You don’t start playing concerts on day one, and your writing won’t be worth much either, but you will get better. Second, study the great writers and learn from them. Try to copy the styles of the guys you like for practice. Take the best and make it your own style. Lewis is one of the best.)

· Housing prices in Dublin had risen by 500% since 1994. Rents for homes were often 1% of the price of the home. A $1-million-dollar home went for $833 a month. That is a very clear bubble.

· Irish home prices implied an economic growth rate that would leave Ireland, in 25 years, three times as rich as the United States.

· In 1997 the Irish banks were funded entirely by Irish deposits. By 2005 they were getting most of their money from abroad. The small German savers who ultimately supplied the Irish banks with deposits to re-lend in Ireland could take their money back with the click of a computer mouse. Since 2000, lending to construction and real estate had risen from 8 percent of Irish bank lending (the European norm) to 28 percent. One hundred billion euros—or basically the sum total of all Irish public bank deposits—had been handed over to Irish property developers and speculators. By 2007, Irish banks were lending 40 percent more to property developers than they had to the entire Irish population seven years earlier.

The Slump Goes On

The Slump Goes On: Why?

September 30, 2010, Paul Krugman and Robin Wells

Fault Lines: How Hidden Fractures Still Threaten the World Economy
by Raghuram G. Rajan
Princeton University Press, 260 pp., $26.95

Crisis Economics: A Crash Course in the Future of Finance
by Nouriel Roubini and Stephen Mihm
Penguin, 353 pp., $27.95

The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession
by Richard C. Koo
Wiley, 296 pp., $45.00

Nouriel Roubini; drawing by John Springs

In the winter of 2008–2009, the world economy was on the brink. Stock markets plunged, credit markets froze, and banks failed in a mass contagion that spread from the US to Europe and threatened to engulf the rest of the world. During the darkest days of crisis, the United States was losing 700,000 jobs a month, and world trade was shrinking faster than it did during the first year of the Great Depression.

Inflation Expectations and Rising Oil Prices

James Picerno, RGE Monitor Feb 23, 2011 12:37PM

The political upheaval in Libya has pushed oil prices to a 28-month high. Whenever crude runs skyward, fears of higher inflation usually follow, and this time is no different.

But one closely watched measure of inflation expectations in the U.S. is holding steady. The yield spread on the conventional 10-year Treasury less its inflation-indexed counterpart remains in the 2%-to-2.5% range that’s prevailed for months.

Libya, Oil Prices, and the Economic Outlook

James Hamilton, RGE Monitor Feb 24, 2011 7:43PM

What will be the economic effects of this week’s developments in Libya? We have a fair amount of historical experience from which to try to answer that question.

In a recent paper, I surveyed the history of the oil market with a particular focus on major price movements and their economic effects. The table below summarizes the six episodes since World War II in which geopolitical events led to significant disruptions in the supply of oil. The last column reports the amount by which global oil supplies were reduced as a percent of world production at the time. The first five of the episodes listed in the table were followed by economic recessions, whereas the last was not.

 

EU’s Richest and Poorest Regions

   Date: 24-02-2011
 Source: The Wall Street Journal

Which of the European Union’s 271 official regions are the richest and which the poorest in terms of what their populations can buy? In data for 2008 released today, Eurostat uses purchasing power parity calculations to show Inner London, followed by Luxembourg and Brussels, are the most prosperous regions, and Severozapaden in Bulgaria the poorest. The poorest eight regions are either in Bulgaria or Hungary.

The data suggest that average inner Londoner has a purchasing power 3.43 times the EU average and 12.3 times the average resident of Severozapaden, but Eurostat says the numbers may be exaggerated  in places where many people commute in to work–like, presumably, London, Luxembourg and Brussels.

Der Föhrenbergkreis Finanzwirtschaft in Kärnten

in der Fachhochschule Kärnten in Spittal/Drau am 12. April, um 19.30.

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