Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Finanzkrise’

Economists still lack a proper understanding of business cycles

Posted by hkarner - 22. April 2018

Date: 21-04-2018
Source: The Economist: Free exchange
Subject: Diminished expectations

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

THE aftermath of the 2007-08 financial crisis ought to have been a moment of triumph for economics. Lessons learned from the 1930s prevented the collapse of global finance and trade, and resulted in a downturn far shorter and less severe than the Depression. But even as the policy remedies were helpful, the crisis exposed the economic profession’s continued ignorance of the business cycle. That is bad news not just for the discipline, but for everyone.

The aim of those studying the macroeconomy has always been to understand the economy’s wobbles, and to work out when governments should intervene. That is not easy. Downturns come often enough to be a serious irritant, but not often enough to give economists sufficient data for rigorous statistical analysis. It is hard to distinguish between short-run swings and structural economic changes resulting from demography or technology. Most classical economists were sceptical of the idea that the macroeconomy needed much oversight at all. Den Rest des Beitrags lesen »


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Dr. Doom Still Basking in His Fame After Warning of Housing Collapse

Posted by hkarner - 15. April 2018

Date: 14-04-2018
Source: The Wall Street Journal

Nouriel Roubini, one of the first voices to predict the financial crisis, has been in high demand on the lecture circuit

Nouriel Roubini, the New York University professor and economist was one of the early predictors of the U.S. housing crisis.
A decade after the financial crisis, The Wall Street Journal has checked in on dozens of the bankers, government officials, chief executives, hedge-fund managers and others who left a mark on that period to find out what they are doing now. Today, we spotlight analyst Meredith Whitney and economist Nouriel Roubini.

Nouriel Roubini continues to delight in the celebrity status he achieved as a rare voice warning of a housing market collapse before the 2008 financial meltdown.

He wrote a well-received book, titled “Crisis Economics.” He has been in high demand on the lecture circuit. And he has amassed nearly 450,000 Twitter followers; a total, he says, that is second only to Paul Krugman among economists.

“Every day, someone on the street stops and says, ‘Can I take a picture with you?’” the 60-year old said in a recent interview.

Before the financial crisis, the New York University professor was little known outside of academic circles. Nearly always clad in a black suit, Mr. Roubini was dubbed “Dr. Doom” after an International Monetary Fund event in September 2006, where he said a slowdown in the U.S. housing market could lead to a global recession. Den Rest des Beitrags lesen »

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A new shade: The next Japan is not China but Thailand

Posted by hkarner - 7. April 2018

Date: 05-04-2018
Source: The Economist

Once the wildest of emerging markets, Thailand is ageing fast. Its economic policymakers need to change course

TWENTY years ago Thailand was the most torrid of emerging markets. After a spell of overheated growth and wide current-account deficits, it had exhausted its foreign-exchange reserves and lost its currency’s peg to the dollar. In the aftermath, inflation approached 10% and the Bank of Thailand (BoT) struggled to restore confidence in the baht. In a widely cited paper by Romain Rancière of the University of Southern California and two co-authors, Thailand was used as a stark illustration that dynamism and danger, fast growth and occasional crises, went hand in hand.

A few of today’s emerging markets can still set the pulse racing—Turkey, for example, has combined breakneck growth with double-digit inflation and a worrying slide in the lira. But Thailand is not one of them. Private investment expanded by only 1.7% last year. Thailand’s sovereign bonds yield less than America’s. Inflation is once again a worry, not because it is too high, but because it is so stubbornly low. Consumer prices rose by only 0.8% in March, according to figures released this week. Inflation has remained below the BoT’s target range of 1-4% for 13 months in a row. Core inflation, excluding raw food and energy, has been below 1% for almost three years.

“It’s Japan,” says one veteran observer of Thailand’s economy. “It’s got Japan’s demographics from 25 years ago, [and] it’s on the Japanese path of zero inflation, very low interest rates and a big current-account surplus.” By 2022 Thailand will be the first developing country to become an “aged” society, according to the BoT, with more than 14% of its population over 65. The proportion of elderly is rising faster in Thailand than in China. Den Rest des Beitrags lesen »

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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 Next Phase of Finance

Posted by hkarner - 14. März 2018

Bertrand Badré

Bertrand Badré, a former managing director of the World Bank, is CEO and Founder of Blue like an Orange Sustainable Capital and author of Can Finance Save the World? 

Today’s strengthening economic recovery has not overcome the understandable but devastating loss of trust in the financial system that followed the crisis a decade ago. Restoring trust will require reasserting control over the financial sector, to ensure that it is serving the economy, not the other way around.

WASHINGTON, DC – The decade since the global financial crisis has been tumultuous, to say the least. True, no great war has erupted, and we have more or less avoided the mistakes of the Great Depression, which led in the 1930s to greater protectionism, bank failures, severe austerity, and a deflationary environment. But renewed market tensions indicate that these risks have not been eradicated so much as papered over.

In a sense, the story of the 2008 financial crisis begins when the global order was created from the ashes of World War II. Initiatives like the Bretton Woods institutions (the World Bank and the International Monetary Fund), the Marshall Plan, and the European Economic Community supported the reconstruction of significant portions of the world economy. Despite the Cold War (or perhaps because of it), they also re-started the globalization that WWII had brought to a halt. Den Rest des Beitrags lesen »

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Italian Election Dims Hopes of Eurozone Reform

Posted by hkarner - 13. März 2018

Date: 12-03-2018
Source: The Wall Street Journal By Simon Nixon

Rise of antiestablishment parties makes prospect of overhaul at June summit increasingly unlikely

Luigi Di Maio, the 5 Star Movement party’s leader and candidate for the post of Italian prime minister, celebrated with the party’s showing in Italian elections last week.

The key question that European policy makers have been debating for the past year is this: Should reforms to strengthen the eurozone take place before or after an Italian crisis?

Of course, no one publicly puts it quite so starkly.

Instead, they hide behind technical language: They argue over whether the eurozone should prioritize “risk reduction” or “risk sharing.” But everyone knows what they mean.

Should the eurozone arm itself with tools to tackle a Greek-style debt crisis in Italy—and perhaps even forestall it? Or should it wait until the markets conclude that the European Union’s third-largest economy’s debts are unsustainable and then clean up the mess?

Last week, Italians answered the question for themselves. By voting to fill more than half their parliament with representatives of antiestablishment, euroskeptic parties, they almost certainly dashed any realistic prospect of eurozone leaders agreeing at a June summit to a package of far-reaching changes to the way that the eurozone is managed. That would include proposals to create a common budget to be overseen by a eurozone finance minister and the creation of a common deposit guarantee scheme to underpin the entire eurozone banking system. Den Rest des Beitrags lesen »

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The Market Dogs That Didn’t Bark

Posted by hkarner - 28. Februar 2018

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

Did February’s equity-price reversal mark the end of the bull market, or was it just a temporary correction? In addressing this question, one must look not just at the stock market, but also at oil prices, long-term US interest rates, and currencies.

LONDON – Three months ago, I argued that rising stock markets around the world were a consequence of improving economic conditions, not a sign of “irrational exuberance.” Since that commentary was published, share prices accelerated upward, and some “irrational exuberance” did start to appear, leading to a sharp fall in early February. Although most stock markets are still well above their levels of last November, the question lingers: Did February’s reversal mark the end of the bull market, or was it just a temporary correction?

The strongest evidence, as Sherlock Holmes might have remarked, comes from the dog that didn’t bark. More precisely, it comes from three vehement guard dogs – oil prices, long-term US interest rates, and currencies – that slept peacefully through the commotion on Wall Street. Den Rest des Beitrags lesen »

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The Making of Lehman Brothers II

Posted by hkarner - 27. Februar 2018

Simon Johnson, a former chief economist of the IMF, is a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-founder of a leading economics blog, The Baseline Scenario. He is the co-author, with James Kwak, of White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.

A serious legislative effort, supported by the Trump administration, is underway to reduce the level of scrutiny applied to banks that are on the verge of becoming systemically important. If congressional Republicans have their way, financial stability will be at greater risk than at any time since the 2008 crisis.

WASHINGTON, DC – Last week, with some fanfare, the US Treasury Department released a report on what to do about the Orderly Liquidation Authority. The OLA, created under the Dodd-Frank financial reform legislation of 2010, was intended to prevent a recurrence of what happened in September 2008, when one failing firm, Lehman Brothers, was able to trigger a cascade effect that nearly destroyed the financial system.

The OLA allows the Federal Deposit Insurance Corporation (FDIC), subject to reasonable safeguards, to take over a failing financial firm and wind it down in an orderly manner – very much in line with what happens, with some regularity, when a small bank becomes insolvent. Although the Treasury report reads more like a political document rather than a well-reasoned technical assessment, it still comes to a sensible conclusion: keep the OLA in place. Unfortunately, the report also masks a broader legislative and regulatory agenda that will add unnecessary risk – and a lot of it – to the financial system. Den Rest des Beitrags lesen »

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Posted by hkarner - 15. Februar 2018

FURCHE-Kolumne 234, Wilfried Stadler

„Die ganze Geschichte“ nennt Yanis Varoufakis sein packendes Buch mit dokumentarischen Erinnerungen an jenes erste Halbjahr 2015, in dem er als griechischer Kurzzeit-Finanzminister gegen die Troika von EU-Kommission, Europäischer Zentralbank und Internationalem Währungsfonds ankämpfte. Mit seiner so rasanten wie provokanten Solofahrt durch die Wirrnisse der Eurokratie kam der exzellente Ökonom und passionierte Motorradfahrer einem Kompromiss mit den Gläubigern zum Greifen nahe. Dann aber erhöhte der binnen weniger Wochen zum Weltstar des Nonkonformismus aufgestiegene Varoufakis seinen Einsatz – und pokerte am Ende zu hoch. Seine Manöver um den angedrohten und dann doch nicht vollzogenen Euro-Ausstieg kosteten die ohnehin leidgeprüfte griechische Bevölkerung viel zusätzliches Geld, Wachstum und Beschäftigung. Erst heute nähert sich Griechenland wieder einem volkswirtschaftlichen Normalzustand.

Außer Zweifel steht jedoch, dass es ausreichende Gründe für Kritik an der Eurokratie gab und gibt. Denn es dauerte schmerzhaft lange, bis nach dem Schock der von der Finanzkrise ausgelösten Staatsschuldenkrise ein taugliches Kriseninstrumentarium entwickelt werden konnte. Auch ist die Kernfrage noch immer offen, wie die Spielregeln für das zulässige Maß an Staatsschulden („Maastricht-Kriterien“) in hoch verschuldeten Ländern so angepasst werden können, dass Budgetsanierung und Wachstum miteinander vereinbare Ziele bleiben. Den Rest des Beitrags lesen »

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Is the Stock Market Loaded for Bear?

Posted by hkarner - 8. Februar 2018

Dambisa Moyo, an economist and author from Sambia, sits on the board of directors of a number of global corporations. She is the author of Dead Aid, Winner Take All, and How the West Was Lost.

As 2018 progresses, business leaders and market participants should – and undoubtedly will – bear in mind that we are moving ever closer to the date when payment for today’s recovery will fall due. The capital market gyrations of recent days suggest that awareness of the inevitable reckoning is already beginning to dawn.

NEW YORK – In recent days, the initial New Year optimism of many investors may have been jolted by fears of an economic slowdown resulting from interest-rate hikes. But no one should be surprised if the current sharp fall in equity prices is followed by a swift return to bullishness, at least in the short term. Despite the recent slide, the mood supporting stocks remains out of sync with the caution expressed by political leaders.

Market participants could easily be forgiven for their early-year euphoria. After a solid 2017, key macroeconomic data – on unemployment, inflation, and consumer and business sentiment – as well as GDP forecasts all indicated that strong growth would continue in 2018. Den Rest des Beitrags lesen »

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