Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economy’

Economy with a Fever

Posted by hkarner - 30. April 2018

April 27, 2018

Economic indicators are similar. Lately I see a lot of talk about the flattening yield curve and speculation it might invert as the economy enters recession. If that happens, the inverted yield curve won’t be the culprit. It will point to another culprit, or combination of them.

This is something I watch carefully because a recession is long overdue, if history means anything. Some argue this time is different. Maybe so, but I’m not inclined to bet on it. Today we’ll explore some reasons why.

 

Now, on with our fever treatment, which of course, brings up a story.

In late 2006, when the yield curve was last in the process of inverting, I put in a call to then New York Fed’s Dr. Fred Mishkin, who co-authored a seminal report reviewing 20 different indicators as recession forecasting tools. They found only the inverted yield curve had any true significance, and then it was generally a year early. Den Rest des Beitrags lesen »

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Many results in microeconomics are shaky

Posted by hkarner - 28. April 2018

Date: 26-04-2018
Source: The Economist: Free exchange

The third in our series on the shortcomings of the economics profession

MICROECONOMISTS are wrong about specific things, Yoram Bauman, an economist and comedian, likes to say, whereas macroeconomists are wrong in general. Macroeconomists have borne the brunt of public criticism over the past decade, a period marked by financial crisis, soaring unemployment and bitter arguments between the profession’s brightest stars. Yet the vast majority of practising dismal scientists are microeconomists, studying the behaviour of people and firms in individual markets. Their work is influential and touches on all aspects of social policy. But it is no less fraught than the study of the world economy, and should be treated with corresponding caution.

For decades non-economists have attacked the assumptions underlying economic theory: that people are perfectly informed maximisers of their own self-interest, for instance. Although economists are aware that markets fail and humans are not always rational, many of their investigations still rely on neoclassical assumptions as “good enough” descriptions of the world. But this “101ism”, as Noah Smith, an economist and journalist, calls it, is less prevalent than it was in the 1950s and 1960s, when researchers like Gary Becker reckoned everything from crime to marriage could be described in terms of rational self-interest. Since the 1970s, as Roger Backhouse and Béatrice Cherrier describe in “The Age of the Applied Economist”*, a new collection of essays, the field has taken a decidedly empirical turn. Den Rest des Beitrags lesen »

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Us vs. Them

Posted by hkarner - 27. April 2018

Mauldin Economics, 26/4

By Dr. Ian Bremmer

Dear John,

Last week was James Comey week here in the United States. The former FBI director came out swinging, announcing that Donald Trump isn’t morally fit to be president. Note to Comey: 1) We knew that. 2) We elected him anyway.

What does that say about the United States? That much of the electorate is morally unfit? If so, which part? The part that voted for Trump? The (larger) part that stayed home and didn’t cast a ballot in the most important election in decades? The part that continued to vote for a bunch of establishment candidates who allowed the system to progress to the point where someone like Trump could actually be elected?

Don’t get me going about the Electoral College. Trump and Hillary Clinton both campaigned given the rules in place; they would’ve campaigned differently with different rules. We know all about the Russians and Cambridge Analytica. Yes, the election could have gone differently. But let’s be clear: Trump beat a huge Republican crowd… and Ted Cruz was a close second. Bernie Sanders could have easily been the Democratic nominee.

And all this on the back of Brexit. Soft authoritarian governments popping up and gaining momentum across Eastern Europe. Historic drubbings of establishment forces in the European Union’s three most important remaining economies: Germany, France, and Italy. This isn’t coincidence.

And so back to our note to Comey: 3) Isn’t there a bigger point here? Den Rest des Beitrags lesen »

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„Donut-Ökonomie“: Vom Mut, eine neue Ökonomie zu denken

Posted by hkarner - 23. April 2018

Nicht schlecht: Hätte sie allerdings die Föhrenbergkreis-Arbeit „Auf der Spurensuche nach einer Neuen  Wirtschaftsordnung“ aus dem Jahr 2001 gelesen, dann wäre sie schon 17 Jahre früher so klug gewesen (hfk)

Christian Felber, 21. April 2018, 12:00 derstandard.at

Die britische Ökonomin Kate Raworth stellt mit einem überraschenden Donut-Diagramm die Wirtschaftswissenschaft auf den Kopf

Gäbe es den Ökonomienobelpreis – Kate Raworth würde ihn verdienen. Sie wäre nach 75 Männern die zweite Frau, die den sogenannten „Preis der Schwedischen Reichsbank in Wirtschaftswissenschaft zur Erinnerung an Alfred Nobel“ erhielte. In ihrem Buch Donut-Ökonomie dekonstruiert sie das vorherrschende neoklassische Paradigma der Wirtschaftswissenschaft – vom „Marktmechanismus“ über den „Homo oeconomicus“ bis zum Glauben an das BIP – und setzt sieben neue Denkansätze für die ÖkonomIn des 21. Jahrhunderts an dessen Stelle, beginnend mit einem neuen Ziel für die Disziplin.

Damit liefert sie der weltweit wachsenden Studentenprotestbewegung – von der angelsächsischen Rethinking Economics bis zur deutschen Gesellschaft für plurale Ökonomik – eine allgemein verständliche und von mathematischem Ballast befreite Theoriegrundlage. Raworth, die sich als „frustriert“ von ihrem Studium der Ökonomie deklariert, „weil diese eigenartige Annahmen darüber traf, wie die Welt funktionierte, während sie die meisten Dinge beschönigte, über die ich mir Sorgen machte“, beginnt ihr Buch mit dem Auszug von Studierenden aus der Vorlesung von Gregory Mankiw in Harvard, als dieser ein zu einseitiges Bild der Ökonomie zeichnete. Mankiw folgt als weltweit führender Lehrbuchautor Paul Samuelson, dessen Standardwerke sich in 60 Jahren weltweit vier Millionen Mal verkauft haben. Berühmt wurde Samuelson für seinen Ausspruch: „Es ist mir egal, wer die Gesetze eines Landes schreibt, solange ich die Lehrbücher für Wirtschaftswissenschaft schreiben kann.“

Leben im Donut als neues Ziel

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Top ECB Officials Give Different Takes on the Economy

Posted by hkarner - 23. April 2018

Date: 21-04-2018
Source: The Wall Street Journal

Mario Draghi warns of a peak in the growth cycle, while Jens Weidmann says Germany ‘is still booming’

European Central Bank President Mario Draghi, left, Deutsche Bundesbank President Jens Weidmann right

WASHINGTON—Two of the European Central Bank’s most influential officials offered differing interpretations of an apparent slowdown in the eurozone economy, highlighting the thorny decisions facing the bank as it prepares to draw a line under a decade of easy money just as growth softens.

Speaking at a gathering of finance ministers and central bankers here Friday, ECB President Mario Draghi warned that the eurozone’s growth cycle may have peaked, and suggested his bank would move only slowly to phase out its large monetary stimulus.

Across town, Jens Weidmann, president of Germany’s central bank, acknowledged signs of a slowdown in Europe’s largest economy in the first quarter. But Mr. Weidmann played down the change, suggesting he would continue to press the ECB to phase out easy money soon.

“There’s no reason to see a turning point in growth—Germany’s economy is still booming,” said Mr. Weidmann, who also sits on the ECB’s 25-member rate-setting committee. Den Rest des Beitrags lesen »

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Rethinking the Twenty-First-Century Economy

Posted by hkarner - 17. April 2018

Margareta Drzeniek-Hanouz

Margareta Drzeniek-Hanouz is Head of the Economics Unit at the World Economic Forum.

With the rise of digital technologies and big data, the global economy is undergoing a fundamental transformation that poses significant challenges to governments and policymakers. Unless tools are developed to measure new sources of value in the real economy, current and future generations‘ wellbeing will be in jeopardy.

GENEVA – Before the threat of a US-China trade war arose, surging stock markets and corporate profits had obscured the fact that the global economic system is under existential stress. Global financial stability remains considerably in doubt. Indeed, as world financial leaders gather for the annual IMF/World Bank spring conference in Washington, DC, the rapid pace of technological change and rising inequality are fueling ever louder calls for root-and-branch revision of the entire system.

For governments to cope with these mounting pressures, they will need to rethink the key policy tools on which they have relied for well over a century, starting first and foremost with taxation.

Death and taxes may have been the only certainties in the world of Benjamin Franklin two centuries or so ago; today, only death remains undeniable. With the rise of the digital economy, more and more economic value is derived from intangibles such as the data collected from digital platforms, social media, or the sharing economy. And because company headquarters can now be moved between countries with ease, governments are finding it ever harder to raise taxes. At the same time, public spending will likely have to increase to meet the demands of those left behind in the era of globalization and digital technologies.1 Den Rest des Beitrags lesen »

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Gute Freundschaft mit China belebt das Geschäft

Posted by hkarner - 8. April 2018

Andreas Schnauder aus Peking, 8. April 2018, 19:18 derstandard.at

Österreichische Firmen räumen in China groß ab, Menschenrechte bleiben eher ausgespart. Ein heikles Manöver gelang offenbar bei der Seidenstraße

Österreichs politische Spitzenrepräsentanten haben beim offiziellen Staatsbesuch in China viel erreicht. So stehen die Chancen gut, dass der Schönbrunner Zoo wieder ein Pandamännchen erhalten wird. Präsident Xi Jinping habe zugesichert, das Anliegen Wiens „sehr wohlwollend prüfen zu werden“, erklärte sein Pendant Alexander van der Bellen nach dem Treffen im Volkskongress. Dort hatte der Bundespräsident eine hochrangige Delegation mit Kanzler Sebastian Kurz, vier Ministern und zahlreichen Vertretern aus Wirtschaft, Wissenschaft und Kultur angeführt, um neben Xi Ministerpräsident Li Keqiang und weitere Regierungsvertreter Chinas zu besuchen.

Viele Freundlichkeiten

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Can Markets Handle So Much Trouble at Once?

Posted by hkarner - 25. März 2018

Date: 24-03-2018
Source: The Wall Street Journal

Investors are suddenly facing a trio of negative forces: trade tariffs, tech swoons and central bank tightening

Trouble comes in threes. In isolation, the headwinds facing global markets—fears of a trade war, problems for the highflying tech sector, and central banks tightening policy—could be manageable. Taken together, they spell continued turbulence.

The turnaround in markets has been sharp after January’s bright start. U.S., European and Japanese stocks are all down for the year. Bonds have offered no haven: U.S. Treasurys, investment-grade corporate and high-yield bonds are all sporting negative returns. Emerging markets are faring better, but may suffer if risk aversion persists.

On trade, markets may have become too relaxed last year, when hawkish noises from the U.S. administration failed to turn into anything significant. Even as tensions ratcheted up, economists were quick to argue that tariffs on steel and aluminum would have little direct impact on the global economy. But President Donald Trump’s actions on China, and China’s swift response, clearly increase the risk of a trade war. The Bank of England warned this week that greater protectionism could hit global growth and push global inflation up, a toxic mix.

Meanwhile, the tech troubles centered on Facebook , down 11% this week, are a new shock that may undermine a popular trade that appeared unstoppable until recently. Analysts at Nomura suggest that a regulatory or customer backlash against businesses built around data might burst a bubble that so far hasn’t been seen as one, with investors too focused on past crisis flashpoints like banks and sovereign debt.

It shouldn’t be a shock that central banks are gently removing stimulus: it has been discussed endlessly for months. But ultraloose policy has underpinned markets by suppressing volatility, encouraging investors to pile into risky stocks and bonds.

That increases the chance of sharper market moves even as central banks proceed cautiously. One sign of rising concern is that corporate-bond spreads, which initially appeared robust in the wake of the stock-volatility shock in February, are now moving steadily wider. In both the U.S. and Europe, high-yield bond spreads are some 0.5 percentage point wider than their tightest point this year, while investment-grade spreads are about 0.25 point wider.

Set against all of this is still the sense of momentum in the global economy that supported markets in 2017, and the continued softness of the dollar. But investors fretted about how much those factors had pushed up asset prices last year even when shocks were fewer and further apart. Stocks and bonds are a little cheaper now, but not much, and the threats to the outlook are clearer. Caution is advised.

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The undead: A compelling look at the flaws in the Chinese economy

Posted by hkarner - 25. März 2018

Date: 24-03-2018
Source: The Economist

But Dinny McMahon’s predictions might yet prove too gloomy

China’s Great Wall of Debt. By Dinny McMahon. Houghton Mifflin Harcourt; 256 pages; $28. Little, Brown; £14.99.

THE zombies that appear in Chinese legends are not quite the same as their Western counterparts. They feast on blood, not brains, and hop about rather than staggering forwards. The differences extend to economics. Chinese officials, like their Western peers, openly fret about zombie companies—insolvent firms kept alive by banks—but are far less willing to kill them off. This small excursion into the world of the undead is one of many gems in Dinny McMahon’s new book, a vivid account of China’s economic problems, from debt to falsified data.

Mr McMahon, a veteran financial correspondent in China, most recently with the Wall Street Journal, wears his knowledge lightly, whether discussing ghost stories or balance sheets. His book, “China’s Great Wall of Debt”, is notable for two reasons. It is one of the clearest and most thorough statements of an argument often made about the country: that its government has relied on constant stimulus to keep growth strong, an addiction that is bound to backfire. Second, he comes closer than any previous writer to covering the Chinese economy as Michael Lewis, the hugely popular author of “The Big Short”, might do. His analysis is informed but accessible, animated by anecdotes and characters, some colourful, some verging on tragic. Den Rest des Beitrags lesen »

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SIC Perspectives

Posted by hkarner - 20. März 2018

March 18, 2018

It’s been a week and I’m starting to recover from my post-SIC high. It’s a weird feeling. I love SIC, yet processing it all takes time. Imagine one of those brain maps that shows the neurons opening new pathways. That’s what SIC does. It opens connections that I didn’t previously have.

Mapping these new connections takes time, so I’ll have more to share over the next few weeks. What I’m going to give you today is a rather short letter covering my overall impressions – my sense of feel of what I took away – and a few of the great lines that really impacted me.

 

The Basic Questions I Wanted Answered at SIC

This was my 15th Strategic Investment Conference. Each year I walk away wondering how we can make the next one better, and so for we seem to have been able to do that. We set an incredibly high bar this year, according to the feedback we’re getting. Den Rest des Beitrags lesen »

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