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三联生活周刊：美国现在的经济形势，特别不容乐观，它最大的问题在哪里？
张宇燕：美国的CPI是3点多，意味着现在进入了所谓的“流动性陷阱”。联邦基金利率是0.25%，CPI是3点多，这意味着美国的实际利率为负，这么往里注入资金，市场也起不来，所以大家的看法非常悲观。
负利率说明货币政策几乎没有空间了，再降低利率往哪里降呢？如果第三期甚至第四期的量化宽松，再宽松下去，意味着流动性越来越多，通货膨胀就会起来，而经济能否起来，谁也说不清楚。出现通胀意味着很多问题，比如养老基金，一系列问题都跟着。通胀高了以后，债权人的利益就受到损失，公众也不满，一系列的问题都搅和在一起，又没有别的选择。
所以美国经济处在非常艰难的时期。我们从旁观者的角度看，也很同情美国的决策者，不知道该怎么办。
美国经济我觉得可能进入到第二次衰退，衰退就是连续两个季度的负增长，这个可能性越来越大了。当然，危机取决于怎么定义，大家对美国还债能力的前景不看好，这是一种担心。
这次危机特别的一点是，这次显示美国国内的政治“极化”现象，民主党和共和党之间不妥协，双方死守自己的立场。不像以前，美国的政治经济不管在具体的问题上争执多大，顶层这些人，对国家的发展方向、基本理念，国家应该是什么样的国家，往什么方向走，用什么手段实现目标，大致是有一个共识的。现在看来，这些共识比较脆弱，这是今后面临的一个大问题。
三联生活周刊：政治派别的极化，是因为在经济危机面前，大家都没有好的选择吗？
张宇燕：我觉得这是因为美国之前都比较顺，即使在“冷战”期间也是世界上最强大的国家，是往上走的。美国建国以来没有真正遇到过多极化的世界，这是大的背景。苏联最强大的时候，按照购买力平价计算，也没有今天中国占美国GDP的比重大，我估计今年这个比重可能要超过2/3，去年可能就已经到了2/3。
我同意保罗·肯尼迪在《大国的兴衰》里的结论，财政撑不起了，游戏玩不起了，尽管以前在主宰游戏，最后还是衰亡。现在看来，美国走到今天已经感到有点力不从心，这是大的背景。在这种情况下，要形成共识，比较难。美国人开始寻找原因，比如亨廷顿，他的书《我们是谁》是从美国社会内部来解释的。美国已经有8个州的年轻白人在当地属于少数民族。这么走下去，在未来少则二三十年，多则三四十年，美国可能成为白人是少数族裔的国家了。美国人从人口结构、年龄结构、种族结构等等来考虑这个问题，提供了比较有意思的观察。
几个月前，我们和美国一位著名的经济学家讨论，他是诺贝尔奖获得者。他通过研究发现了一个问题，最近20年，几乎重大的科技创新都源自美国，但是美国的劳动生产率却是建国以来表现最差的20年。创新和生产力到底出了什么问题。当然结论可能和中国有关，但也有人找替罪羊。
美国在很多问题的看法，已经分裂了。包括他们讲中美关系是最重要的双边关系，但是怎么对待中国，分歧可能非常大。所以我想，这个国家在从来没有遇到过的国运面前，怎么形成共识是真正的挑战。
这次两党在国会就这个问题的争议，包括茶党的兴起就是分歧的体现。茶党一个很重要的政治诉求就是要平衡预算，有那么多人的支持。政治上的分歧也是市场比较担心的。
三联生活周刊：美国的变化对中国的直接影响是什么？
张宇燕：中短期看，美国的经济增长乏力，会直接影响到世界。它向全世界输出流动性，也会推高我国的物价水平，大宗商品价格波动将更加扑朔迷离。国际规则的制定和协调上，可能也有变化。现在贸易还是不平衡，顺差还是很大，这些方面在规则制定的双边和多边谈判过程中，中美之间的博弈可能更加复杂和艰难。
三联生活周刊：中国话语权会增加吗？
张宇燕：这是肯定的。但是话语权增加有几个方面，一个是给你机会让你说话，另一个是听你说话的人能有多少，第三，这个讲话产生的影响能否影响规则的制定。
中国，得想好什么样的美国对你有利。中国现在已经是世界第二的经济体了，要有真正的大国战略。以前的战略是建立在中美关系、中欧关系这些和大国的关系之上，现在要转变，你在强大，那么怎么理解这个世界，什么样的世界格局对中国是最有利的。老实讲，这个问题我也没想好。
费正清晚年的时候说：也许我们一开始就错了，一直想用我们的概念和思维方式来描述中国，中国可能压根儿就是和我们不一样的生命。美国现有的模式，也未必适合中国。同时我觉得我们也有必要同样去审视一下，我们理解外部世界的思路和方式。
三联生活周刊：就是中国要把自己作为一个独立体来考虑。
张宇燕：对，以自己为中心来考虑这个世界，什么样是对我最有利的，但是最有利不是漫无边际的，一定要考虑到政治上的可行性，考虑到一切博弈都是在动态中进行的。我觉得是我们现在要认真思考的问题。
要理解霸权，一个国家在全球的地位，决定性因素至少有7个，经济实力是最基础的，接下来的是科技实力、军事实力和货币，第5个是和人口、国土面积与自然资源密切相关的国家规模。第6个是你在制定规则、解释规则、执行规则方面的能力。最后就是价值理念能被多少人接受，就是你输出价值观。
美国的霸权就是建立在上述7个要素之上的。三联生活周刊：你刚才提的问题非常好，对中国来说，什么样的世界格局什么样的美国对自己最有利，可能是中国最需要从战略上考虑的问题。
张宇燕：中国需要比较稳定的美国。从我的角度来看，全球秩序的维持是一个公共产品，但是又没有世界政府，只能靠霸主来提供。提供公共产品是需要花钱的，霸主来提供一定得对霸主的成本有所补偿，一定得对它有好处。从这个角度来说，世界秩序通常是不公正的。要公正的秩序，谁来提供呢？
要想承担责任，得付钱做贡献，中国这个时候，一个稳定的、相对强大的、对中国友好的、开放的、真正负责任的美国，是符合中国利益的。其实说句实在话，世界的霸主并不好当。
规则体系我们是要的，具体要什么呢？说白了，就是和平和发展的大环境。具体说，未来的10年，中国的政策取向主要有以下5点。首先，中国需要稳定的国际环境，来保障资源、能源供给顺畅。第二，出口市场安全要得到保障，大量的贸易保护主义对中国肯定不利。尽管“十二五”规划强调内需，强调经济增长方式的转变，强调创新，但是外部市场还是很重要。第三，要保证领土的完整，这是传统安全的内容，其中祖国统一是很重要的目标。哪个实现了伟大复兴的国家是分裂的？没有。第四，实现国际货币体系的多元化，其中包括人民币的国际化。最后，在全球规则确立过程中，中国不仅有发言权、话语权，而且在规则的制定上能够有一席之地。比如G20，中国在里面是一个非常重要的博弈者，中国正在开始从一个简单说“不”的参与者，向建言献策、最终成为规则制定者身份的转变。
感谢实习记者/张冉
非中性规则
三联生活周刊：美国一直从它建立的货币金融霸权中获利，今天大家都深刻地意识到了这点，但是这个游戏刚开始的时候，并不是所有人都看得明白。
张宇燕：为了说明的方便，我在这里引入一个概念，叫铸币税。在金属货币时代，西欧各国金币或银币的铸造权掌握在国王手中。在铸币过程中，他们常常利用降低金银成色的办法获取额外好处。进入纸币时代，由于纸币印刷成本大大低于金银价值，铸币税的获利前景极度拓展。不过用收取铸币税的方法牟利也是有条件的，其中基本条件是别人愿意持有你发行的货币，并且持有者的数量不断增加。
隐蔽地，似乎又是在自愿基础上的让别国持有美元，是美国以征收铸币税的方式占有别国资源或财富的一个重要手段，而这无疑加剧了世界范围内的贫富不均。
哈佛大学已经去世的教授金德尔伯格，是研究经济史金融史的，专门说为什么布雷顿森林体系崩溃以后美元仍然能够做大，主要因为德国、日本这些国家，心甘情愿持有美国国债，他们来承担汇率风险。第二，愿意用美元而不是本国货币来借贷，这样等于是支持了美国。第三，也是很重要的一点，当时“冷战”还没有结束。全球的货币金融问题，一定是和大的政治经济格局联系在一起的，没办法孤立地说，一定有政治考虑。
美国的确在以往的和现行的国际货币体中获取了巨大利益，但如果换了其他任何一个国家，当拥有美国那样的权势时，恐怕也会像美国那样行事的。古人讲“人无衅焉，妖不妄作”。那些让美国或欧洲凭借货币占了很大便宜的国家或地区，其自身的货币金融体系的脆弱性和不当政策是要负一定责任的，尽管有些弱点带有宿命的色彩，比如国小，再比如经济落后。
三联生活周刊：你提到过“货币流通域”的概念，说国家之间的竞争，在某种程度上就是货币在流通域的竞争。
张宇燕：对。流通域涉及的问题是，从铸币税的角度，和货币的便利性带来的。使用你的货币的人和国家越多，占有它的资源就越多。
比如柬埔寨，流通的货币90%是美元。它哪里来的美元？靠出口一些纺织品、服务业，好不容易挣了点美元，本来应该到美国去买东西的，它不去，留在柬埔寨流通，这就是美国典型的收入。美国用一把一把的纸，换取财富和资源。这种国家越多，美国收益越大，钱永远不回来，用烂了扔在那儿最好，而且流通中的货币都是美元，这个国家的货币政策就等于是没有。
国家间的竞争在货币领域，就是尽可能让别的国家使用我的货币。
三联生活周刊：从一个比较长的历史时期来看，美国通过“一战”、“二战”几个历史机会来确立自己世界霸主的地位、建立美元霸权，货币政策对其树立霸权地位，起了什么样的作用？最初美国依靠货币来控制世界的想法的形成过程是长期的政策选择吗？
张宇燕：这个分两类。通过货币政策来主导或者掌控世界一开始可能是市场的过程，还有一个是政策设计的结果，都有可能。
对一个国家货币的信任，是建立在多方面基础上的。从制度层面上看，司法体系、开放市场，还有经济实力、经济规模、贸易量，再有一个因素是军事力量。今天的世界，美国的军费支出占全球的将近40%多。
从霸权的角度来讲，其支点有几个，军事、科技、经济规模、货币等等。规模很重要，这也就是为什么今天我们人均收入很低，但是全世界都在关注中国，因为你规模大。
三联生活周刊：我们今天提到的美国霸权的建立，与过去旧殖民体系的霸权，已经不是一种模式了吧？
张宇燕：今天的殖民方式和以前不一样了。以前是靠军事征服、文官治理和商业掠夺这么一套模式。今天的世界本质上讲，是一个规则体系，我不用派人过去，你接受了对我有利的非中性规则，我就赢了。同样的规则，对我和对你意味着完全不同的事情。规则面前人人平等，并不意味着规则是公正的。我们签订了一个条约，这是规则我们都遵守，但是挣了钱以后我拿95%，你拿5%，公正吗？不一定。
今天的世界发达国家很清楚，原有的殖民方式比如派兵，成本很高。让你接受我定的对我有利的规则，本身就意味着我赢了。咱俩比赛，你总能设计一个比赛肯定你赢，我也能设计出来一个我赢的。所以大家竞争的是规则的制定权，而货币本身就是一套规则体系，所以在货币领域，大家也在争夺规则制定权。因为货币能给一个国家带来巨大的好处。
铸币税是其中的一个。印美元的权力在美国，而和别国的贸易是以美国的货币计价结算，同时美元也是最主要的国际储备货币，所以在货币政策、汇率政策争端中美国都有主动权。这里面有一系列的好处，与国家总体的实力密切相关。
三联生活周刊：你提到从美元信用危机的角度来看，1971年布雷顿森林体系崩溃，其实已经是美国对全世界的一种大的信用违约。
张宇燕：美元在历史上面临的危机，上世纪60年代就有过表现。在1971年布雷顿森林体系崩溃前，美元按固定的比价与黄金挂钩，同时各国货币与美元挂钩。显然，布雷顿森林体系意味着美元等同于黄金，持有美元就等同于持有黄金。为了进行贸易，各国必须持有一定量的美元。而为了拥有美元，这些国家就必须保持对美国大量出口，这种为美国向全世界攫取利益提供方便的机制，其可持续性是有疑问的。
上个世纪60年代初，美国经济学家特里芬写过一部题为《黄金与美元危机》的书。正是在这本书中他提出了著名的“特里芬两难抉择”，其含义是靠美国国际收支赤字为全球提供世界货币，很可能会遇到两个局面：或是因为美国国际收支赤字不足而导致“美元荒”并最终殃及全球贸易与经济增长，或是因为美国国际收支赤字过大而引起美元过剩并迟早危及美元与黄金比价。历史实际进程吻合了特里芬的预言。由于欧洲各国纷纷用手中的过剩美元按固定比价向美国兑换黄金，这使得美国黄金储备大幅度减少，1971年尼克松总统宣布美元脱离黄金自由浮动。
三联生活周刊：当时美国宣布，美元和黄金脱钩的时候，没有遭受到特别大的阻力吗？
张宇燕：美国国内也有争议，但一个现实问题是美元已经走到了维持不下去的境地。如果继续按照35美元一盎司的话，黄金就枯竭了，如果走到那一步再说没法兑现的话，它就遇到大麻烦了。所以布雷德森林体系的瓦解，是美国向全世界做了一次大的违约。
三联生活周刊：今天的信用危机和当时有可比性吗？
张宇燕：我觉得可比性不大，性质不太一样。当时美国是世界最大的黄金储备国，它欠各国的是贵金属黄金，或者是别国用美元兑换黄金的权利。今天美国欠的是纸币美元，偿还纸币美元债务的最终主导权掌握在美国手里。也正是如此，美国当时违约了，因为它没有那么多黄金。
但是当我们在比较货币的时候，其实不是在好和坏之间选择，绝大多数都是在坏和更坏之间进行选择。美元相对于其他货币来说，可能更稳定，毕竟美国是世界最大的经济体，经济开放，有着比较公平公正的司法体系，资本市场比较有效，规模巨大，不像小国家，一开放一冲击马上就垮掉了。这些因素对一个国家的货币成为世界货币非常重要。
从这几个标准来看，这次虽然美国经历债务危机、信用评级危机，但是放眼看去，世界很难说有哪一个国家或者经济体的货币能对美元作为世界货币的地位提出挑战。
三联生活周刊：但是1971年与黄金彻底脱钩之后的美元开始了超量发行的历史，并且美国过去这几十年来的繁荣，在很大程度上得益于它的美元霸权的建立。
张宇燕：现在看来，美国确实收益很大，这是和大的背景有关，美元成为世界货币了。
“冷战”结束后，中国改革开放，柏林墙倒塌，东欧一批国家进入国际市场，市场规模一大，就意味着对美元的需求增加。以前中国的外汇储备只有几十亿，现在几万亿美元，其中大部分是以美元计价的储备，俄罗斯也是这样。我们说的是官方的外汇储备，俄罗斯企业也有很多的外汇，这就增大了对美元的市场需求。
凡是在机场免税店买过商品的人大概都有这样的印象，那里出售的商品中电子产品是日本和韩国制造的，手表主要是瑞士的，香水和威士忌酒等主要产自法国，皮革制品和太阳镜等则分别由法国、英国和意大利等国生产，除了一些品牌香烟外，几乎见不到美国商品。我也曾感到纳闷，在这样一个竞争性的大市场上，“美国制造”怎么会如此之少？仔细再一想，我就明白了，在这个市场上，美国提供的最有竞争力的产品是美元。
这就应了好像是克鲁格曼讲过那句话，大意是说“二战”后到今天的全球经济格局，大致可以被描述成为：全世界都在努力生产美元能够购买的商品，而美国生产美元。但美元超发是把双刃剑，今天它就品尝到了苦涩的一面
"Halfway through hope"
44 Comments - Show Original PostCollapse comments
TMM, the Paper link doesnt seem to work. Thanks for a great post as usual
10:48 AM
Hi anon.. sry about that. Fixed it.
10:52 AM
Thanks! You guys rock
11:41 AM
In the end, don't your recommendations lead to a nationalizing of large parts of the banking system?
11:58 AM
Well they weren't so much our recommendations as more our thoughts of what they may do. Nationalising the banks is not what we imagine they wan't. That would mean govn would be responsible for their success or failure. Better to completely neuter them, regularly hitting them with law cases or taxes to drain off "excessive" profits yet leave shareholders to feel any pain as they felt the shareholders got too good a deal out of bank bailout part one... would imagine it's also very useful to have an independent banking system to politically blame for any future problems too.
12:17 PM
excellent post MM... your thoughts about negative vs positive posts are clearly true...
if its not negative, no one responds!
EUR/USD looks fugly, as $dollar strength against most major pairs. I feel that cant be a harbinger of risk on. Though with so many HF reversing their USD positions in the past few weeks, who knows
looking forward to reading the paper
1:22 PM
Of course gentlemen if governments end up owning 40% of a banks balance sheet , post recapitalisation , then that is the best of both worlds . Evil bankers can continue to take the blame while day to day control over operations moves to the Elysee, #10, or the Hague.
Far fetched ? Those of us with long memories remember dear old Crispin with Rail Track and dear old Phillip with Northern Rock .
1:31 PM
Whatever happened to Greek farmers? Everyone on extended paid vacations or retired?
2:10 PM
From where I stand, in order of most to least probable:
4), 3), 5), 1) (without the forced recap), 6), 2), 7)
To me, it seems like policy makers (at least those who are not on the continent) are not seeing this as 08 redux; growth is seen as the panacea here, and I don't think the banking system is the mechanism they intend to rely on.
Also, you can count on heated discussions re: currency intervention behind closed doors. Probably generic statements outlining commitments to flexible exchange rates (once conditions normalize).
2:24 PM
'C fom C' says'
Looking at the dollar and what that means for the sell the dollar buy anything tangible heretheto it appears we may have reached that point in time where relative ugliness has reached it's zenith with dollar taking it more historical role of ultimate big liquidity safe haven. If that runs then risk is off.
3:09 PM
I don't think one should confuse 2 seperate functions here. Real USD buying (not on normal safehaven flow) and the euroblx. As for this current dump. I sympathise with the usd move but not the rest if it. Doesn't feel deep enough. Just hope on monday we aren't writing a "Chamberlain" piece... "I have in my hand a piece of paper..."
3:19 PM
'C from C' says'
I am not sure what you mean by the "rest of it".
It appears to me we have two potential issues.
The first is global growth biught via inflationary policy and the channel for that the weak dollar.Do we have some acceptance that the way ahead does not appear to be Orange..I mean Golden ;)
The second issue is safe haven flow from Euro uncertainty when the channels that have become so popular appear with the Swissie to be getting slammed shut.
Appears to me some combination of both factors could be at play right now.
3:30 PM
Brilliant stuff, Greece really defies analysis.... but it's a very unique situation. The EU would have been better off admitting Albania to the currency union, at least they still grow stuff and work there. Greece is an example of what happens when an untaxed kleptocracy and bloated government bureaucracy are allowed to join forces to take complete control of an entire country, resulting in a hollowed out economy. US, take note.
So perhaps markets are pricing in a "Greek outcome" for all the other countries, where they all sit around in cafes smoking and complaining, while importing all their products from Germany, where they are produced by Gastarbeiter from Turkey and Africa? But look, this is crazy, Spain and Italy have problems but they are still functional economies and some regions are thriving. Greece is unique, for the time being.
I liked the G7 checklist, especially 4) no more Lehmans and 6) gold sales. Both of those would do wonders for confidence. I would add 8) encourage the BoJ to go Swiss, and go big - they desperately need to attract productive investment in Japan itself. It's important to flush several safe havens all at the same time if we are to get things moving globally and avoid malinvestment and long-term parking of capital at these financial airport parking lots (that's car parks, to you, TMM).
The DAX post was very useful, and I think the DAX is a great tell for the time being, we would continue to buy DAX and SPX, as long as we have higher lows. The DAX post pointed out the extreme oversold conditions, and a recent visit to Europe suggests that we are not seeing a Soup Kitchen economy anywhere, as recent market action might suggest. Gastarbeiter everywhere, prices as steep as ever.
C in C is right, if Bucky runs and the Euro crashes hard, it will be risk off big time, but we don't see that happening here.
Nobody wants to see Neville, it's time for Winston.
3:38 PM
Leftback,
I think the definition of malinvest is actually investing into production capacity when there is no demand for it(China is a great example of how bizarre it can become with over 50% of GDP coming from fixed investment). Safe havens are so well bid because there are not that many good investments that make sense in a low growth environment plagued by over-capacity. Investments can be value destructive you know.
4:05 PM
'C from C 'says'
Bucky is running now not just against the Euro and this is my point..it is running against AUD and CAN albeit pars have yet to be taken out there,but collectively this is a turnaround that I would simply not ignore. The strange thing is taht it happens when the US appears ready to to take yet another step to buy growth which makes them virtually isolated in that other majors are not taking such steps.Moreover the G7 as we know mmet. It may be the case that is a general sideline move in the sell the dollar circle until at least after the G7 and BB have come to play.
4:16 PM
Anon, I have tolerated all kinds of rubbish from a variety of anons, but I have had enough of this shit. Your comment is inane and massively toolish, if I may say so. There are an absolute host of excellent investments to be made all over the world at this time without having to build empty cities in China.
Japan is in dire need of regional reconstruction. The Disunited States fancies itself a bit but in reality has descended to such an extent that the infrastructure would shame a decent third world country, with some awfully nice trains from about the 1950s and crumbling roads, bridges, and infrastructure everywhere you look. it is a disaster.
Europe is more of a problem - it has hordes of unemployed youth and university graduates with nothing much to do except sit around and complain about Gastarbeiter while the latter wait their tables and clean the toilets for Jeremy and Jemima the estate agents. But I see no shortage of (dirty, dull, unglamorous) jobs for people who are willing to do the work.
If ever there was a time for investment in our own people and our own neck of the woods, it is now. There are millions of great projects that need doing in the US, I am sure this is true elsewhere too.
This is no time to sit in your house 1930s-style on a pile of Treasuries, gold or bunds, bemoaning a lack of aggregate demand and lazy indigent workers, we need some real collective action to break out of this state of ennui in the developed world.
4:29 PM
A Stark reminder of ECB disunity.
Stark Resigns
Germany really needs to think outside the box here. An EU unwind isn't going to do much for German exports. Hard to believe that even our Bayerische friends in Lederhosen are that stupid (in fact, we don't think they are at all).
Deal with Greece now, dump them, they deserve nothing more, and the market has priced it in. But then circle the wagons around the remainder of the EU and let's get back to functioning markets.
4:40 PM
Today's market action (especially European bank stocks) is telling us that a Greek default is coming, and that it is now likely to be imminent. All that remains is to hear about the length of the resulting haircuts. The media noise about ECB plans for recapitalizing banks is telling you that they will not allow another Lehman moment here.
If US markets can hold critical support levels by the end of the day, as I believe they can, this will be a bullish sign for the weeks and months ahead of us.
5:01 PM
'C from C' says'
Yes I caught the Stark resignation. There are times when frankly I feel like giving up on my fellowman because his stupidty appears to know no bounds. Stark is an educated man ,but IF he truly had any principles and used that 'education' he would have weighed up whther this was the appropriate time at which to spit out his dummy and are I say he would made his desire known quietly ,but held off for the moment acting upon it.
Whoever kept the Uk out of this shambles even to this degree needs a medal for foresight. Not that we will escape the fallout IF they proceed with this playground dispute.
5:11 PM
The timing is suspect. Somebody is making big coin today. Quite possibly, Stark chose this opportune moment because he has trading friends at DB or on some other desk who were short, and this gives them time to make a profit and then cover ahead of the G7. We don't need to have much faith in the integrity of individuals, especially when they are bankers.
A new low on the 10y today, do you fancy it here, C in C? LB has to say Treasuries are the ultimate Venus fly trap here... fly to safety at your peril, you may be slowly digested before the bonds mature.
5:28 PM
PP - gads! I read the whole paper. The only certainty I could derive was that any solution that does not directly involve China is probably prone to collapse. But admitting China on the terms that it can more or less dictate means the official end of the entire post-war structure. There is a lot more than banks and nations being saved here.
re, Greek olive oil. A little hard to believe that it came from Germany unless by some related Italian company paperwork trick used to move non-EU oil inside Europe. It's not the first time I've heard rumours of Greek buying on intl markets. The amount calculates out, btw, to be about 750 tonnes v domestic production of typically 150,000.
5:44 PM
LB has had a chat with the ref - and as a result LB apologizes unreservedly to Anon @ 4.05 for donning the steel toe caps on his Doc Martens up there.
Sorry, guv'nor, there have just been a lot of Anons (gold bugs and their ilk) who have been trashing the comments space in general and LB in particular, and "we just snapped, m'lud. It won't 'appen again".
Honest, guv...
5:57 PM
Leftback,
I agree that some investments can be good and infrastructure in US is an excellent example. But the amounts there are not as massive as the money that lies idle just at the Federal Reserve in excess reserves for example (1 trillion, 2 trillion?)and these projects are not shovel ready. And I am not going even to start about the US political circus that means that only cosmetic mis-directed stimulus is taken. And how exactly will this constructive spending be funded - with more debt until you hit the compound trap like Greece and soon Italy?
Its not the flushing of the safe havens that is needed to start this up though - it's agressive bank resolution Swedish style, defaults and debt writedowns/cramdowns. Then people can stop worrying about counterparty risk, defaulted assets will find more effective owners and everybody gets on with it by taking a haircut on unsustainable standard of living, even the unemployed students in Europe.
At the risk of being even more naive, I dare to say that nothing will come out of G7 because there is really nothing they can do except jaw-boning. Gold sales are a non-starter - no CB will be stupid enough to sell its only insurance. Japan interventions - how many have there been, coordinated and not? The JPY will only fall once the current account surplus deteriorates significantly, 2008 style. An explicit FX target will generate inflation in Japan very quickly and destroy their ability to fund at 1% rates and then you have the next Greece, only much larger.
6:02 PM
"This is no time to sit in your house 1930s-style on a pile of Treasuries, gold or bunds, bemoaning a lack of aggregate demand and lazy indigent workers, we need some real collective action to break out of this state of ennui in the developed world."
The republicans believe it is a superb time to sit on a pile of treasuries gold and bunds, and bemoan any and all attempt to create aggregate demand, other than giving lots and lots of money to those people who are overflowing with treasuries, gold and bunds, and taxing the aggregate demanders who have nothing to spend but ennui.
And they will get everything they want. (There will be a Republican President, Senate and House in Jan 2013, and they will eliminate the filibuster).
"If ever there was a time for investment in our own people and our own neck of the woods, it is now. There are millions of great projects that need doing in the US, I am sure this is true elsewhere too."
In the USA the received wisdom is that of course the efficient market would have already made those investments if they were worth doing, so obviously there are no good investments, and that won't change until we give the people with surplus capital even more, and stop doing anything which looks like something suggested in the previous paragraph.
6:26 PM
'C from C' says'
I see much to agree with in Anon 6.02 as I did with your earlier post.
I do however see something very ironical in your comments.You see what you are suggesting as a tactic for low growth ,that is waiting it out in 'safe haven' is from apragmatic point of view not really any different to what people did when they loaded into property over two decades.You see that was what they thought was a 'safe haven' against long run inflation and it's effect on the life's accumulation of capital.In part,a large part that was also a mistake because anything that is inanimate and not working productively simply diverts moneyflow and contributes to economic contraction eventually.
So the point I am making is this most of the 'safe havens' are no different to property in that they 'store wealth' and in doing so encourage the very low growth they presume to exist.
Tell me what would growth be if the vast amount of moneyflow lying idle was put to work ?
It's all idle speculation anyway because anyway ,because in truth a great dela of that money is owned by people with marshmallow balls. A large scale concerted global offensive on growth would flush it into play faster than we could blink. Not many will sit and watch growth actually start to get underway meaningfully while cuddling a basketful of comfort blanket treasuries. I know human nature and I do know that about it.
G7 ..big whip right out of the Swiss playbook would put this to the test.
6:35 PM
YES, WE CAN!
...AND WE WILL!
http://www.youtube.com/watch?v=iu49gV-fefE&feature=related
6:42 PM
Marshmallow balls...
That my friend is a MM classic. Well done, sir!
Well, LB stirred it up a bit out there today. LB is a bit like the Joey Barton of MM, some days classy, skillful and inspirational, other days just looking to clatter people and start up fights all over the field. We're Scouse..!
6:54 PM
"Yields fall to 60-year lows on Europe worries"
No chance that this might be a sentiment extreme?
None at all, I suppose....
7:05 PM
LB,
Good to see you back on the forum.
While I agree that Greece needs to be allowed to default, I am skeptical that such a move would be bullish for markets in weeks and months to come. I agree that removing the uncertainty surrounding Greece would be a plus, but I see some negatives as well.
A Greek default would mean the ECB needs to be recapitalized (again). What would that do to (German) policy makers' appetite for continued ECB propping up of the BTP market? What is the impact of a Greek default on the marginal buyer/seller of Italian/Spanish government debt? It strikes me that a pretty good portion of the real money no longer considers Italy to be money good and I don't see a Greek default helping that situation.
All that being said, S&P is holding support (so far). Today's close may be quite indicative.
7:52 PM
'C from C' says,
The stark move gave the sellers a free shot coming as it did on a friday with an upweek behind it. Technically the market come Friday wth money in the pot is raedy to go to the bank with some anyway so when you load up Stark on top you've just tilted the balance of selling urgency relative to thin buyers.Other than that today could have been pretty much a non event for equity outside of mainland Europe which actually si where most of the concern is actually focussed.
8:15 PM
Folks, I'm actually out and about so having to script on a phone, so no long messages. Just a thanks for the impressive contributions in these comments.
Thanks and good weekends I hope for all .
Keep it clean..
Pol..
9:03 PM
'C from C' is not out and about and is determined to get that post count up so says'
Tell me this 'safe havens'...
Did Japan get low growth and very low yields on it's public debt because the worlds was actually in low growth mode of was it actually because their domestic towards growth was so very very bad that it actually engenered it?
I know where I lean and that is low growth was not some predetermined 'must be' awaiting debt deleverage to the nth degree at all. The low growth came because the govt and it's policies squeezed out the opportunities for growth and Mrs watanbe had no reason to go looking for growth risk when the govt had already shaped her behaviour towards pottering along the strret to the Post Office to deposit her capital in an account that yielded something commensurate with it's risk. My argument is there is no reason tat the world needs to replicate Japan ,but it will if it imitates it's policies and i do hope the Germans are really not that stupid albeit they appear to be making a good start at it !!
9:27 PM
'C from C 'says'
What if for example your debt level is rising more slowly than the yield cost on servicing the debt is dropping...LOL in that case 'safe haven' is actually paying the US etc etc to undertake some very low cost debt issuance to fund all the job creation it wishes. The irony of that appeals to me ..growth paid for by 'safe haven' fear ;)
Now if only we can get politicians to stop looking at nominal debt levels and start looking at real cost of debt levels.
9:42 PM
@ C from C,
I would be careful with that line of argument. The "rising debt levels with falling cost of carry" situation perfectly describes Greece until, well...
The problem with those damned bond vigilantes is that they generally aren't a problem until it is too late. Assuming that the US got forewarning and yields started creeping up, they would have to achieve a primary surplus in very short order. Given that they are running a 10% deficit, I cannot agree with you that the US should be borrowing based solely upon their current cost of issuance (especially given the sloppiness of their major stimuli packages - see below)
That being said, a properly executed stimulus in a country like Germany (which is in a much better deficit situation) probably makes sense. By "properly executed" I mean spending on projects (which may be pulled relatively rapidly, and also contribute to future efficiency) rather than programs (which are politically very difficult to cut back on).
Food for thought. Now it's my turn to get out and about.
10:15 PM
C from C,
I think you should look somewhat differently at the Japan situation and important lessons from it. What happened was exactly the result of attempts to avoid proper banking system restructuring and asset clearing - sound familiar? You are absolutely right that the government squeezed out opportunities and prevented effective allocation of capital. But all the interventions you ask from G7 will achieve the same results - distort incentives. Gold is rising as a direct result of government intervention in markets. Isn't the reason everybody is buying US treasuries with negative expected return is Fed intervention and expectations of additional Fed intervention? The so called safe haven assets are unintended consequences of misguided and useless government policy attempts at controlling business cycles for the last 20 years. You need to destroy fake paper wealth including sovereign debt holdings through debt restructuring and defaults and achieve market clearing prices that actually make sense to take risk. You cannot make people take risk if reward is negative by default. Also, overall slower economic growth now is a function of high base, demographic changes and resources limitations, especially energy constraints - and it's not possible even at lower levels without writing down the massive unproductive financial overhead. So I am all for productive investments but capital protection is not a useless concept right now, especially if the governments are intent on confiscating private savings to shore up banks and overpriced assets = low growth or no growth for many years.
11:06 PM
Yep well before I turn in, thanks to you Teamsters for takin' the time to up jump the boogie.
I noticed today in his address to the Eastern Economic Association (How We Failed, NYTimes) that Krugman appears not only to have thrown in the towel but also to have thrown down the gauntlet in the direction of a safer pair of sociologist's hands.
So ... have we reached The Tipping Point?
12:04 AM
It seems the "purge the rot from the system" meme is still going on strong after 80+ years...
Aggregate demand and unemployment are what matter here. Treasury yields are high and trending lower because the markets expect the growth to be shit.
8:33 AM
http://www.youtube.com/watch?v=jDhLVyYsC_A
Have a good weekend all!
11:54 AM
G7 pre-communique already released. A translation:
"We will squirt a torrent of liquidity from all orifices if there is any indication that Mr Shorty is going to instigate a Black Monday. So don't even think about it."
1:43 PM
A lot of people comment on the debt situation in US and Japan saying that a disaster from rising interest rates that will lead to default, hyperinflation etc. is imminent. This couldn't be further from the truth. Please learn how the modern monetary system works and the difference between currency issuers (like the US and Japan) and currency users (like Greece, Italy etc, as well as the US in the old gold standard). In today's world there is ZERO probability of Japan defaulting in its JPY debt. The worst it can happen is currency weakening (like in the UK) resulting in moderate imported inflation (like in the UK again), but NOT hyperinflation, not with the tax capacity intact, laws working, and people in debt denominated in that currency up to their eyeballs. So, if you feel like trying your luck playing bond vigilante for the n-th time in Japan, go ahead, you will end up bankrupt like so many others before.
3:56 PM
Also, let me say that I'm with Leftback on the spending/investing part. The world and especially the western world has huge wasted spare productive capacity. As capital decides to stay idle (i.e. parked in treasuries, cash or hoarded commodities) there's a growing number of unemployed people that slowly turn to unemployable, and this is a true waste from a global point of view (i.e. viewing the world as a whole). Nowhere is this more evident than in the continental Europe and especially in the south. Unfortunately, language and cultural barriers prevent even the educated youth of Greece, Spain, Italy, etc. to move to Germany or wherever else there's still demand for their work. There's a lost generation there and it's a pity that the shortsighted Eurocrats allow this to happen.
4:04 PM
C f C' says'
Theta,indeed.
This is simple ,but seems not to be appreciated by many.
If you are a sole issuer of currency of major major league size then the market punishes you for issuing non asset backed money via your currency and not by trying to do a david and Goliath on your bond debt which is likely to be huge.
IF you are a minor in the legaue table,OR IF you are not a sole currency the market can punish you via both your currency and via your debt costs.
Hence ,for example the behaviour of recent times of the US$ so at odds with the performance of it's debt yields.
By comparison the PIIGS have been secured from currency punishment because of Germany (and I suspect China) so the punishemnt has been taken via cost of debt. Note that has changed as sentiment now also appears to have decided that the state of affairs between these relative trading partners now favours a better outcome from US policy than from Eurozone policy.
Hence,the US now get's the best of both worlds . Global fear has delivered very low borrowing costs recycling Fed profits to the treasury and discounting/locking in future low borrowing costs on each issuance.
Meanwhile the attraction of the dollar will push down inflationary costs even further for them and tend to narrow their trade deficit through the energy bill albeit offset by export growth being capped.
However those inflationary costs and locking in of future rates will provide consumers with an effective increase in disposable income as .
On top of this this context gives the US a 'free' shot at fiscal stimulus recycling beefits back to consumers through the tax regime.
In other words it does everything that stupid EU policy of fiscla austerity fails to do with the one exception that their currency falling will over time assist export growth and that would be nice IF only outside Germany they had many export oriented Industry. The problem for the EU even with a falling currency will be that so much of their trade that should benefit will not because they are a trading zone transacting first and foremost with each other with the biggest exception being Germany of course.
US equity of course being so global in the majors now has a further problem with eanrings IF the dollar rally proceeds which it looks likely to do. Market will probably factor that in first beofre stopping to consider whether a payroll tax holiday if passed may offset it.
Still just looking at the economies rather the markets for the moment the US looks most likely to outperform going forward when compared to the EU and I'd be surprised if this did not get reflected in the performance of the market Indices.
11:29 AM
'C from C' says'
Actually Theta you're mssing something probably I suspect because you might not be a Brit.
That spare capacity you are talking about has been stadily making it's way to the UK !
We are open to them and the language barrier does not tend to exist as many speak enough English to work here.
Note to idiots this is why the 'aging poulation' argument and doom and gloom for future growth does not work for the UK at all. We are adding numbers and those numbers tend to be of the young age group. What are we going to do with them? As a sole issuer of currency we should just ssue and let the market do what it wants with our currency ,because it will not be able to get to grips with our debt if we enact fiscal growth polices. This is also why I would not be a buyer of UK or even US debt BECAUSE both countries have the ability and dare I say it likelihood of going for growth. I know O*****ourn talks a lot about the debt,but before too long we will see something else form him because he wants to get re elected eventually and he won't have time to dawdle if he wants to make that happen..does anybody seriously think a party get's re elected via austerity ..jezus get some education in psychology...no chance
11:37 AM
Great stuff, this morning, especially Theta's skewering of hyperinflationistas, and C from C's astute comments on the UK, which has escaped the worst of the Euro mess by virtue of retaining its monetary sovereignty and the joint actions of Swerve and El Gordo to produce a rapid and enormous devaluation of the pound during the GFC, resulting in the moderate inflation we see today in the UK but avoiding a huge collapse.
Well done, chaps. Carry on.
2:29 PM
ECB - TMM's take was that JCT spent the first 15 mins trawling through the usual numbers associated to CPI and other price stability measures to justify their "no move" stance. Meanwhile the market was starting to mumble "errr.. and? Does the guy really not get it?" The growing "does he not get it" then manifested itself in the more and more pointed questioning along the lines of "do you not get it?" to which he more and more violently expressed the view that it wasn't his job to "get it" as the only stupid piddling target he had been given to play with was "price stability" - Which TMM think he felt is like being told you are in charge of the cup holder in the Millennium Falcon as you take on the Empire's Deathstar. Mind you, he did put a very convincing case for what a wonderful job he had done with the cup holder and how he was amazed that no one had called him into the Federation's Galactic headquarters to give him a medal. Unfortunately TMM didn't quite see it that way and think his reading from the start of his forthcoming memoires has instead just highlighted the rift between the ECB and the politicians at a time when unity of response is needed. Lagarde, even this morning, is saying that monetary policy needs to be more accommodative but until they change the ECB's mandate TMM think it will probably take until December before the rear-view mirror of the ECB 12 yr old quants picks up enough historic data to trigger an inevitable rate cut. -1 Point.
BoE - Think they must have had McKinsey Consultants in to advise on their policy announcement having obviously been told just to photocopy the last one and send it out again. Nil Points
Obama - Better advised (probably by Simon Cowell) having already teed up the market for a $300bil plus from an earlier $250bil, he went for $447bn (why not $450bn?!). TMM didn't actually hear the announcement but would not have been surprised if it had been accompanied by the "sentimental rising success of underdog to winner" music, so overused in X-Factor style shows, after brief background interviews with his friends and family all saying how much he REALLY REALLY wants this to work, it's his dream, how it will change his life should he win and how he really hopes the Republicans will give him their votes. TMM think that him holding out the olive branch of $245bn of tax cuts mean the bulk of the stimulus should be enacted. Not the viewers' favourite, but having Simon Cowell behind him means through to the next round. +2 points.
The net effect of the above has been to make Eur/usd the litmus paper of Austerity vs Stimulus policies and it's now trading on a 1.38 handle.
As a quick aside on another function that TMM is being told to sell Eur/usd on - There has been plenty of muttering out there about a possible announcement of HIA2, a sort of super HIA where repatriated funds are conditional upon "good" investment. TMM however think the likelihood of such an announcement in the short term is neither likely nor advisable because all it does is encourage corporates to keep cash abroad for the future, on the expectation that there will be another future tax holiday with result being that corporation tax receipts fall structurally. Bad idea.
We now await G7 - Whereas the results of the other announcements appear to be parochial, the response to this one should be global. Interesting that we had the first glimmer of agenda with Geithner's piece yesterday in the FT. Not exactly earth shattering in its novelty but if they actually get any of this done then it will be seen as a seismic shift relieving some of the stresses in the plate tectonics of imbalances. TMM's reading of punters is that little is expected ."What can they do?", which means they start a point up. TMM would like to see something a little more punchy and wonder what the chances of the following happening are:
1) G7 propose global bank stress test administered by the IMF, and commit to forcibly recapitalise banks either directly (for those governments that can afford it) or via EFSF (for those that can't).
2) G7 and China state they are ready to support the Eurozone by explicit purchases of government debt from Exchange Stabilisation Funds.
3) G7 agree to extend the scope and attractiveness of central bank swap facilities and explicitly encourage their use by banks.
4) G7 reiterate commitment to "No More Lehmans".
5) G7 reintroduce bank liability guarantee schemes (e.g. TLGP).
6) G7 announce a new round of gold sales in order to recapitalise banks.
7) G7 central banks agree to purchase bank bonds
And finally, this has been out for a bit but considering the Lagarde comments and those she made at Jackson Hole and pre-G7, TMM wonder if this paper first pubished in March could form the basis for a new Marseille Accord creating a new system for Global Capital Markets and FX?
--------------
Stop Press
TMM have over the past year experienced first hand the absurdities of Greek economics and now hold up as exhibit A this latest piece of data.
"Data released by the Hellenic Statistical Authority (ELSTAT) suggested that Greece imported 1.5 million euros worth of olive oil -- once a staple of its agricultural production -- from Germany in 2010"
posted by Polemic at 9:27 AM on Sep 9, 2011