Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

The Santa clause

Posted by hkarner - 16. Dezember 2017

Date: 14-12-2017
Source: The Economist: Schumpeter

A festive memo from one of America’s leading chief executives to his lieutenants

DEAR Team, I trust you are looking forward to your vacations and that the spirit of love and generosity infuses your family gatherings. I also hope that this spirit will be left next to the Christmas tree when you return to work at this incredible company on January 2nd. Because 2018 is going to be the year when America Inc loses its head after a decade of iron financial self-control. And I am not going to make that mistake. Let me drop some festive wisdom: when everyone else is throwing money around like Santa, it is best to behave like Scrooge.

During my workout at 5.10am this morning my trainer played U2. I love Bono for his personal advice on charitable giving, but he is also a perceptive lyricist. “It’s a beautiful day” captures the mood in business. Third-quarter results blew the roof off. Earnings per share for the S&P 500 are 23% above the last peak in 2007. The world economy is rocking. At this week’s digital town halls our sales teams in Houston and Guangzhou reported record industrial orders. President Macron—whom I first met in 2008 when he was a junior spreadsheet guy at Rothschild—tells me that even the Europeans are doing high fives. Den Rest des Beitrags lesen »

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The dogs that didn’t bark

Posted by hkarner - 16. Dezember 2017

Date: 14-12-2017
Source: The Economist

Why are Brexiteers so quiet about Theresa May’s concessions to Brussels?

Despite a big exit bill and concessions on European judges and the Irish border, Brexit hardliners have kept mum

IT HAS been an up and down week for Theresa May. On December 11th the prime minister basked as pro- and anti-Brexit Tories alike cheered the deal that she had secured on the first phase of Britain’s Article 50 divorce from the European Union. But two days later, as she prepared to head back to Brussels to get an EU summit to approve the deal, Mrs May suffered her first big parliamentary defeat, when 11 of her own MPs joined the opposition to amend the EU withdrawal bill.

Mrs May deserved praise for pushing the Article 50 process forward. Yet it is surprising that Brexiteers were so loud in their approval of the deal. Mrs May has blurred many of their red lines. She accepted a bigger exit bill than they originally envisaged. The agreement on the future rights of EU citizens in Britain gives the European Court of Justice (ECJ) a say for eight years after Brexit. The agreement to avoid a hard border in Ireland implies full alignment with most single market rules. And Brussels insists that transition entails accepting all EU laws plus the ECJ. Den Rest des Beitrags lesen »

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Surveying the Damage of Low Interest Rates

Posted by hkarner - 16. Dezember 2017

Anders Åslund

Anders Åslund is a senior fellow at the Atlantic Council in Washington, DC. He is the author of Ukraine: What Went Wrong and How to Fix It and, most recently, Europe’s Growth Challenge (with Simeon Djankov). He is currently writing a book on Russia’s crony capitalism.

Few would disagree that it was necessary to slash interest rates in the immediate aftermath of the 2008 global financial crisis. But after a decade of ultra-loose monetary policies across advanced economies, growth remains tepid, financial risks have proliferated, and middle-class savers have lost out.

WASHINGTON, DC – For years after the 2008 financial crisis, policymakers congratulated themselves for having averted a second Great Depression. They had responded to the global recession with the kind of Keynesian fiscal and monetary stimulus that the moment required.

But nine years have passed, and official interest rates are still hovering around zero, while growth has been mediocre. Since 2008, the European Union has grown at a dismal average annual rate of just 0.9%.

The broad Keynesian consensus that emerged immediately after the crisis has become today’s prevailing economic dogma: as long as growth remains substandard and annual inflation remains below 2%, more stimulus is deemed not just appropriate, but necessary.

The arguments underlying this dogma do not hold water. For starters, measures of inflation are so poor as to be arbitrary. As Harvard’s Martin Feldstein notes, governments have no good way to measure price inflation for services and new technologies, which account for an ever greater share of advanced economies’ GDP, because quality in these sectors varies substantially over time. Moreover, real estate and other assets are not even included in the accounting. Den Rest des Beitrags lesen »

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The Baumgarten effect

Posted by hkarner - 16. Dezember 2017

Date: 14-12-2017
Source: The Economist

Oil and gas supply disruptions ripple around the world

Tight markets and wintry weather exacerbate the problem

CALL it the hydrocarbon equivalent of the butterfly effect. As oil and gas supplies tighten during the northern winter, disruptions as remote as a hairline fracture on a piece of Scottish pipeline, and an explosion in an Austrian natural-gas plant, have repercussions felt around the world.

Start with the pipeline. After Ineos, a chemicals company, detected a growing crack on a piece of pipe near Aberdeen, on December 11th it said it would shut the main Forties pipeline carrying North Sea oil and gas to Britain for weeks. The suspension of a pipeline carrying 450,000 barrels a day (b/d) of crude, in a global market of almost 98m b/d, would not normally be disruptive. Yet Brent crude, the benchmark for pricing much of the world’s seaborne crude, is itself partly priced on the flow of crude from 80 fields that feed the Forties pipeline, magnifying the impact.

Futures prices for Brent crude delivered in February and March surged to two-year highs, above $65 a barrel, before falling back. That emphasised how little slack the market has, after the extension last month of a production cut by OPEC, the producers’ cartel, Russia and other petrostates. Ann-Louise Hittle of Wood Mackenzie, a consultancy, says some European refineries rely on Brent crude to produce heating oil for sale in Germany and elsewhere. “Suddenly half a million barrels are out of action at a delicate time going into winter,” she says. Those refineries may now receive some shipments of American crude.

The mishap also highlighted the fragility of the Brent benchmark, which is priced based on demand for four types of crude produced in ageing North Sea fields running through pipelines dating from the 1970s. Earlier this year S&P Global Platts, an agency that assesses the Brent price, said it would incorporate from January a fifth crude from a Norwegian field, to ensure a more stable mix of production. Den Rest des Beitrags lesen »

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As Fed Tightens, Europe Hangs Loose

Posted by hkarner - 16. Dezember 2017

Date: 15-12-2017
Source: The Wall Street Journal

Region’s banks in no rush to follow the Fed in raising rates

Central banks in Europe showed continued caution about the region’s economic recovery on Thursday, signaling that they are in no rush to follow the Federal Reserve in steadily raising interest rates despite a rare synchronized expansion across the world economy.

The European Central Bank left its interest rates unchanged, even as its new economic projections forecast strong growth for the 19-nation eurozone through 2020.

“The incoming information indicates a strong pace of economic expansion and a significant improvement in the growth outlook,” said Mario Draghi, the ECB’s president, in a news conference.

The ECB’s economists now expect the eurozone’s economy will grow by 2.3% in 2018, a big increase from the 1.8% growth projected as recently as September. They continue to expect this year to be the currency area’s best since 2007. Den Rest des Beitrags lesen »

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A fresh approach to complete the banking union in the Eurozone

Posted by hkarner - 16. Dezember 2017

Stefano Micossi 11 December 2017, vox.eu

Director General, ASSONIME; Honorary Professor College of Europe; Member of the Board of CEPS and of Cassa Depositi e Prestiti; Chairman of the School of European Political Economy, LUISS

Tackling legacy risks Den Rest des Beitrags lesen »

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Chinas zweites Kind macht Eltern zur neuen Zielgruppe

Posted by hkarner - 15. Dezember 2017

Johnny Erling aus Peking, 15. Dezember 2017, 14:00 derstandard.at

Durch die Zweikindpolitik werden Eltern für die Wirtschaft wieder interessant. Autohersteller haben sich bereits auf den Trend zu größeren Familien eingestellt

Bei schönem Wetter treffen sich chinesische Mütter jeden Vormittag zum Plausch vor ihren Apartments in der Neubausiedlung Panyu. Die palmenumsäumten Straßen des Viertels in der Kantoner Südstadt sind mit Autos der Anwohner verstellt. Hier wohnen typische Mittelschichtfamilien. Fast jede Frau trägt ein Baby am Arm. Das Besondere daran: Es ist meist ihr zweites Kind. Kinderwagen werden zur Schau gestellt, Informationen ausgetauscht, wo sich Windeln und gesunde Babynahrung online kaufen lassen. Unter den Autos stehen viele SUVs und neue Mehrzweckfahrzeuge. Der benachbarte Shenzhener Batterie- und Autokonzern BYD (Build Your Dreams) hat sich auf den neuen Bedarf eingestellt. Auf der Kantoner Automesse stellte er einen Siebensitzer der Marke Song Max für die Zweitkindfamilie vor. Der Minivan bietet Platz für den Ausflug einer Kleinfamilie mit zwei Kindern plus Großeltern und Kinderfrau. Verstellbare Hintersitze, ein um 90 Grad drehbarer TV-Bildschirm und Internetverbindung gehören zur Ausstattung. Im Internet hat es den Spitznamen „Heiliges Gefährt für das zweite Kind.“ Auch internationale Autobauer haben sich auf die neue Kindpolitik in China bereits eingestellt.

Skepsis ist abgeklungen

Den Rest des Beitrags lesen »

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Can the Trump boom last?

Posted by hkarner - 15. Dezember 2017

Date: 14-12-2017
Source: The Economist

America’s long-running economic expansion

Donald Trump is not the architect of American growth.
But in the short term, things are set to go his way

THERE is often more fakery than truth in a tweet from President Donald Trump. But on one subject he is broadly right. America’s economy is in good shape. Business confidence is high. Jobs are plentiful. Last month non-farm companies added 228,000 workers to their payrolls. The unemployment rate is 4.1%, the lowest figure for more than a decade. The availability of jobs is drawing more of the working-age population into the labour force. Wages are growing in real terms with some of the biggest gains going to low-paid workers.

Mr Trump over-eggs things, of course. He claims each good jobs report and each new peak in the S&P 500 as his own achievement. In fact, he was lucky in his inheritance. The market has risen by 25% since his election, but is up by 195% since 2009. The unemployment rate fell from a peak of 10% to 4.7% under Barack Obama and then to 4.1% on Mr Trump’s watch. His administration says that a mix of deregulation and corporate-tax cuts will spur sustained GDP growth of 3%, well above the 2% average of recent years. As the economy approaches full employment, an astonishing pickup in productivity would be needed to accomplish that.

But Trump-bashers overstate their case, too. They dismiss the optimism of consumers and bosses as sentiment, not substance. They warn that the stockmarket is dangerously overvalued and that America’s expansion, which is in its 102nd month, must soon falter. Yet the economy is not in immediate danger. And the maturity of the business cycle cuts both ways (see article). It makes a nonsense of Mr Trump’s claims to be the author of American economic success. But the economy is also capable of some welcome surprises. Den Rest des Beitrags lesen »

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A decade after it hit, what was learnt from the Great Recession?

Posted by hkarner - 15. Dezember 2017

Date: 14-12-2017
Source: The Economist: Free exchange

Governments skilfully tackled the symptoms, not the underlying disease

TEN years ago this month, America entered the “Great Recession”. A decade on, the recession occupies a strange space in public memory. Its toll was clearly large.

America suffered a cumulative loss of output estimated at nearly $4trn, and its labour markets have yet to recover fully. But the recession was far less bad than it might have been, thanks to the successful application of lessons from the Depression. Paradoxically, that success spared governments from enacting bolder reforms of the sort that might make the Great Recession the once-a-century event economists thought such calamities should be.

Good crisis response treats its symptoms; the symptoms of a disease, after all, can kill you. On that score today’s policymakers did far better than those of the 1930s. Government budgets have become a much larger share of the economy, thanks partly to the rise of the modern social safety net. Consequently, public borrowing and spending on benefits did far more to stabilise the economy than they did during the Depression. Policymakers stepped in to prevent the extraordinary collapse in prices and incomes experienced in the 1930s. They also kept banking panics from spreading, which would have amplified the pain of the downturn. Though unpopular, the decision to bail out the financial system prevented the implosion of the global economy. Den Rest des Beitrags lesen »

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Is Bitcoin a Bubble? 96% of Economists Say ‘Yes’

Posted by hkarner - 15. Dezember 2017

Date: 14-12-2017
Source: The Wall Street Journal

The digital currency’s price has surged, but economists say speculation is driving the gains

The D hotel in downtown Las Vegas this year installed an ATM that allows customers to exchange Bitcoin into cash and vice versa. Economists surveyed by The Wall Street Journal think the digital currency is in the midst of a speculative bubble.

The soaring price of bitcoin is likely the result of an unsustainable speculative bubble, according to the vast majority of private-sector economists surveyed by The Wall Street Journal.

“If it looks like a duck, and quacks like a duck, it’s a duck,” said Diane Swonk, founder of consultancy DS Economics.

Fifty-one out of 53 forecasters, or 96%, said bitcoin has been experiencing a speculative bubble. Just two forecasters said its recent gains weren’t a bubble. Den Rest des Beitrags lesen »

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