“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
[undecid]
Roubini: The Worst Is Yet To Come!
Nov. 15, 2009
After a summer of mixed messages, he’s now firmly back to stark warnings, most recently sounding the alarm about a massive bubble due to the dollar carry trade.
And today in the Daily News he has some bad news for the unemployed: the worst is yet to come.
Also, remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession.
So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.
There’s really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.
Svjetske burze: Dow Jones najviše u 13 mjeseci
Na početku prošloga tjedna ulagače je ohrabrilo obećanje ministara financija i središnjih bankara skupine G20 najrazvijenijih zemalja svijeta da će i dalje primjenjivati stimulativne mjere sve dok gospodarstva ne budu čvrsto na putu oporavka.
Hina
Prošloga su tjedna, drugoga zaredom, cijene dionica na svjetskim burzama porasle, što se zahvaljuje uvjerenju ulagača da će monetarne i financijske vlasti i dalje poticati oporavak gospodarstava, te da će kamate još neko vrijeme ostati na najnižim razinama u povijesti.
Na Wall Streetu je prošloga tjedna Dow Jones indeks porastao 2,5 posto, na 10.270 bodova, najvišu razinu u 13 mjeseci. S&P 500 indeks ojačao je 2,3 posto, na 1.093 boda, dok je Nasdaq indeks skočio 2,6 posto, na 2.167 bodova. Na samom početku prošloga tjedna ulagače je ohrabrilo obećanje ministara financija i središnjih bankara skupine G20 najrazvijenijih zemalja svijeta da će i dalje primjenjivati stimulativne mjere sve dok gospodarstva ne budu čvrsto na putu oporavka.
"Ulagači su se plašili da će, zbog naznaka oporavka, vlasti početi ukidati poticajne mjere, no nakon posljednjih komentara čini se da će se te mjere primjenjivati i dulje nego što se očekivalo", kaže Michael Pento, strateg u tvrtki Delta Global Advisors. To znači da će kamatne stope u većini zemalja još neko vrijeme ostati na najnižim razinama u povijesti. Osim što jeftin novac smanjuje troškove financiranja i poslovanja kompanija, niske kamate navode ulagače na rizičnije investicije, kao što su dionice, dok se povlače iz investicija koje nose niske prinose, kao što je američka valuta.
Zbog toga je prošloga tjedna dolar oslabio, pa je njegov indeks, koji pokazuje vrijednost dolara u odnosu na šest najvažnijih svjetskih valuta, zaronio na najnižu razinu u posljednjih 15 mjeseci, duboko ispod 75 bodova. To je potaknulo rast cijena sirovina i nafte, pa se cijena nafte kretala između 77 i 80 dolara po barelu, dok je cijena zlata dosegnula 1.120 dolara po unci, najvišu razinu u povijesti. Zahvaljujući tome, među najvećim su dobitnicama prošloga tjedna bile dionice naftnih i rudarskih kompanija.
Rekordno niske kamatne stope i slabljenje dolara bili su osnovni pokretači rasta cijena dionica u prvoj polovici tjedna, dok je u drugoj polovici u fokusu ulagača bio trgovački sektor. Poslovna izvješća trgovačkih lanaca trenutačno su izuzetno važna, kao i njihove procjene prodaje u četvrtom, blagdanskom tromjesečju, jer oporavak gospodarstva nije održiv ako se ne počne oporavljati i potrošnja.
Wal-Mart je u proteklom tromjesečju ostvario bolje rezultate nego što se očekivalo, no najveći američki trgovački lanac oprezan je u procjenama prodaje u četvrtom kvartalu. Očekuje da će se njegova prodaja u ključnom tromjesečju, kada potrošnja uoči blagdana obično snažno raste, u trgovinama otvorenima barem godinu dana kretati u rasponu od 1-postotnog pada do 1-postotnog rasta. Puno je optimističnije poslovodstvo JC Penneya, koje je poručilo da bi zarada tog trgovačkog lanca u blagdanskom kvartalu mogla biti veća nego što se procjenjivalo.
Unatoč prošlotjednom osjetnom rastu cijena dionica, mnogi su ulagači i dalje oprezni jer nisu sigurni da situacija u gospodarstvu opravdava snažan rast burzovnih indeksa, koji su od polovice ožujka skočili oko 60 posto. I dok neki analitičari smatraju da su cijene dionica posljednjih dana previše porasle, s obzirom na situaciju u gospodarstvu, drugi kažu da je dobar znak to što vodeći indeksi uspijevaju zadržati dobitke, premda vijesti iz gospodarstva nisu baš blistave.
"Ohrabrujuće je što indeksi ne padaju značajnije nakon svakog većeg rasta. Tržište nije tako nestabilno kao prošloga mjeseca, kada su nakon svakog većeg skoka cijene dionica oštro padale. To je dobar signal konsolidacije tržišta, pa očekujem da bi do kraja godine cijene mogle nastaviti postupno rasti", kaže Ryan Detrick, strateg u tvrtki Schaeffer’s Investemen
Guverner Rohatinski je preskočio Opatiju, to mi potpuno razumljivo, nije htio kvariti pesimistički ugođaj koji je tamo vladao!!
Eto guverner je optimist, uz malo sreće ćemo se izvući!!!!
[cool]
Rohatinski: Država je zbog izbora napuhala balon na burzi
Izdano: 09:43 16. studenog 2009
Redakcija Business.hr
Guverner HNB-a Željko Rohatinski, od kojeg smo u ovo vrijeme godine naučili da se oglašava na skupu ekonomista u Opatiji, ove godine preskočio je Opatiju no ocjenu hrvatske ekonomske politike dao je u intervjuu Novom listu.
Rohatinski se dotakao svojih kritičara koji predlažu „aktivniju“ ulogu središnje banke u slabljenju stiska na politiku tečaja ponovo istaknuvši kao primarnu zadaću HNB-a održavanje financijske stabilnosti sustava.
Ovoga puta svoje oštro neslaganje proširio je i na Ivana Lovrinovića, kojeg proziva, doduše ne spominjući mu ime, kao autora još jednog „bisera“ o ukidanju valutne klauzule na kredite u Hrvatskoj. Time se Rohatinski svrstava na suprotnu stranu preporuke EBRD-a, koji kritizira ovisnost o euru zemalja istočne Europe.
Za napuhavanje balona na tržištu kapitala guverner, osim dolaska stranog kapitala, optužuje državu, čiji model poticanja dioničkog tržišta je doveo do zarade za male dioničare pred izbore, što je utjecalo na političke preferencije, ali je i prouzročilo pucanje balona jer su građani umjesto štednje u bankama preferirali nesigurnost burze. Odgovornost za napuhavanje balona Rohatinski širi i na fondovsku industriju, koja je "u takvim poslovima ostvarivala veliku zaradu".
Guverner hvali smjer djelovanja Vlade Jadranke Kosor no kritičan je prema intenzitetu za koji tvrdi da je ovisan o koalicijskim partnerima i „interesnim skupinama unutar vladajuće stranke“. Rohatinski Kosor predlaže preraspodjelu svih stavki proračuna i racionalizaciju svih troškova osim najnužnije socijale i investicija koje daju brzi povrat.
Odgovorna Vlada ne bi smjela bježati od promjene zakona kojim se definira rashodna strana proračuna, upozorava Rohatinski, te dodaje da na činjenicu kako je propisima unaprijed zadano 87 posto proračuna treba odgovoriti promjenom zakona u Saboru.
Rohatinski priznaje da je potražnja države za financiranjem na domaćem tržištu manja od očekivanja jer se u kolovozu i rujnu proračun punio iznad očekivanja, a tome je vjerojatno pridonijela turistička sezona.
The US Economy is Beginning to Resemble a Japanese Economic Tragedy
by Gerard Jackson
Many are wondering whether the US economy will follow the Japanese pattern and sink into economic stagnation, high levels of unemployment, massive debt¹ and huge deficits. What is annoying is that the economic commentariat are talking as if the Japanese experience is a new phenomenon for which there is no known explanation. Given Obama’s tax, spend, borrow and regulatory policies I think it would be extremely foolish to deny the possibility of economic stagnation.
However, to gain a proper historical perspective I think it would be instructive to take a look at the Japanese economy, not the economy of the 1980s and 1990s but the economy of the 1920s. By doing so we shall learn that there is nothing new or inevitable about the current state of the Japanese economy. Like all economic crises, the problem is really one of lousy economic policies.
The same monetary policy that gave Japan a massive boom at the start of WWI followed by seven years of stagnation in the 1920s is basically the same one that brought her to the present sorry economic state. Understanding the events of the 1920s should, therefore, shed some light on the current situation.
World War I triggered a boom in Japan that was fuelled by cheap credit policies. In 1913 her wholesale price index stood at 100; by March 1920 it had risen to 322. This 222 per cent leap in prices was a sure sign that credit expansion had been out of control. It was also in March of 1920 that commodity prices broke. The boom came to an abrupt end and by April deflation had driven the price level down to 190. Even so, this steep and rapid drop of 132 points was insufficient to bring Japanese prices in to line with those of her trading partners, whose prices had fallen even further.
What is not generally understood (specially by some MIT economists) is that booms create malinvestments. ‘Cheap money’ policies mean that banks create excessive credit which is then loaned out at below market rates of interest. This in turn causes firms to undertake investments that will later prove to be unprofitable. The reason being that the artificially lowered rate of interest caused them to embark on projects that cannot be completed because there are insufficient capital goods available. Eventually these firms find themselves in a financial vice as returns fail to cover their rising costs. Unemployment begins to rise and idle capital appears as consumers reassert their savings consumption ratio. What usually happens, however, is that in an attempt to battle inflation government halts the boom before it plays itself out. Nevertheless, the result is still the same.
Unlike America after its 1920-21 depression (the sharpest in its history) Japan did not recover. So what happened? Basically the same thing that is happening in the US today. Government, the great banks and large industries came together to freeze the adjustment process. The zaibatsu, highly organised industrial groups who also controlled some of the banks, were determined to obstruct any policy of liquidation. Their success caused Japan seven years of economic stagnation and helped fuel Japanese militarism. By halting the deflation and paralysing the adjustment process, the Japanese locked-in boom-created malinvestments, freezing maladjusted costs and prices thus trapping capital in unprofitable lines of production, denying other lines of production the necessary capital for expansion.
As I have pointed out, ‘cheap’ money misdirects investment. In an economic sense, artificially lowering interest rates distorts time for investors. This not only means that savings will be invested in what will become unprofitable projects but that capital combinations throughout the economy, i.e., all stages of production will also be distorted to a lesser or greater degree, depending on their distance from the initial monetary injections.
So the inflation will have basically two effects during the course of the boom: (a) it will expand some stages of production at the expense of others and (b) it will cause firms to change their capital combinations in response to changing prices induced by the inflation. By halting the price decline and maintaining many unprofitable lines of production other companies were denied profitable opportunities for expansion. It should now be clear why halting the adjustment process results in economic stagnation. Therefore, blaming free market economics for this situation is both perverse and dangerous.
Thus for seven painful years Japan held its prices above the world level. Then in 1927 the internal contradictions of this policy were finally resolved by what was probably the severest financial crisis in Japanese history. (By now, much of this should be sounding all too familiar to the reader.) The crisis brought down industries and wiped out many branch bank systems. Thus ended Japan’s first New Deal policy, all because she did not follow the American example of the time and allow market processes to fully liquidate her unsound investments and eliminate excess inventories.
As Ota Sik was said to have told Dubcek: "You ignore the market at your peril." Nevertheless, the 1927 crisis finally eliminated the war-time boom’s malinvestments resulting in about 18 months of consolidation. Substitute the more recent boom for her war-time boom and we are back to the misbegotten policies of the 1920s.
No two economic-political situation are ever identical. Bearing that fact in mind I don’t think it is likely that anyone can know for sure whether a crisis similar to that of 1927 is necessary to restore the Japanese economy. (The 1927 crisis was necessary because of the sheer scale of the malinvestments that needed to be liquidated.) Unfortunately the siren song of Keynesian economics has provided a plausible alternative explanation for Japan’s economic plight, the very same song that the Fed and the likes of Krugman are merrily singing.
According to our unrepentant Keynesians Japan is still suffering from a liquidity trap and now the US finds itself in the same predicament. But the liquidity trap is just another Keynesian myth. These commentators are really asserting that Japanese interest rates have fallen so low that they have raised the demand for cash balances to the extent that additional monetary injections end up in hoards instead of spending streams. Accepting this nonsense is but a tiny step to recommending inflation as a cure for Japanese ills. And this is precisely what happened. Now the same argument is being made by the same people for the US.
The idea was that the government should print billions of yen with which to buy the banks’ bad loans, over-valued assets and just about everything else in sight². This Weimarian policy of flooding the country with paper money was expected to create negative interest rates and raise prices (Krugman suggested an inflation rate target of 4 per cent a year for 15 years) hence stimulating production. But Japan’s economic malaise is not due demand deficiency but to not liquidating her malinvestments that have become a huge burden on the economy.
It follows from this analysis that for inflation to stimulate output it must restore profitability to these unsound investments. For this to happen prices would have to rise high enough to cover the costs of production, meaning costs would have to fall relative to the monetary value of the output. But this means that the current malinvestments are only being temporarily rescued while new ones are being simultaneously created thus laying down the foundations for another recession. This explains why the demand for business loans can come to a grinding halt even when interest rates have been driven down to zero. No business will borrow in the absence of prospective profits.
The main aim of the Fed’s inflationary package is to stimulate consumption. But Austrian analysis explains why a policy of stimulating consumption is incompatible with rescuing malinvestments. In fact, it will only worsen their condition. Production takes place in stages, with consumption being the lowest stage of production. Concentrating spending at this stage directs resources from the higher stages, which in turn will raise their costs of production and thus aggravate their financial situation, even endangering companies that would have other wise survived the crisis. Eventually the government would be forced to apply the monetary breaks, sending the economy into another recession. Moreover, these people forget that investment is forgone consumption: hence, promoting consumption can only reduce investment and retard growth.
The lesson from the American 1920-21 crisis is that Governments should follow the example of President Harding and do nothing instead of following in the interventionist footsteps of Hoover and Roosevelt.
That recessions are actually recovery processes during which maladjustments are purged from the economy is understood by very few economists. The emergence of economic dislocations are, in a sense, withdrawal symptoms. Trying to cure the business cycle with monetary injections is like trying to cure an addict by pumping more heroin into him. Therefore governments should ignore the Keynesian nostrums and cut taxes and allow the market to liquidate the malinvestments.
Inflation is the disease, not the cure. Using inflationary policies as counter recessionary-weapons will — depending on the circumstance — create stagflation or generate another boom followed by another crash.
@ Kralj Arthas,
prijatelju da ne čitam sve ovo što citiraš, jel kažu da će biti bolje il da brusimo puške.
Competition With the Government?
by Ron Paul
Last Saturday many concerned Americans watched in horror as the House passed the healthcare reform bill. If this bill makes it through the Senate, it would massively overhaul the way healthcare is delivered in this country. Today, obviously, we don’t have a perfect system, but this legislation takes all the mistakes we are making with healthcare and makes them worse. Most of what is wrong with healthcare stems from decades of government intervention and the resulting unintended consequences.
But the government’s prescription for the ills caused by intervention is always more intervention. We see this not only in healthcare policy, but also in foreign policy, in economic policy, and in monetary policy – basically, in all areas of public policy. It was even claimed that the House bill would increase competition in healthcare, and thereby improve the private sector’s business model for insurance.
It is fascinating that politicians would use the language of the free market in this way to justify more corporatism. This demonstrates a couple of things. One, that politicians truly do not understand the very basic tenets of a free market. By definition, a free market is free from government intervention. But once a little intervention is accepted as legitimate, politicians will blame the problems created by their intervention on the free market and present themselves as saviors that must intervene even more.
It also demonstrates that politicians know that Americans still believe the free market is a good thing. People know and understand that competition among businesses is better for the consumer than a monopoly. However, competition between a private business and a government or government-favored entity is not real competition.
In real competition, your competitor can go bankrupt if they do a bad job. Everyone knows a government program is forever, no matter how poorly it performs. In real competition, efficiency is necessary for survival. In government programs, waste is rewarded as budgets are often determined by how much money a department is able to consume in a year. In real competition, one business does not have regulatory or taxation authority over its competitors. In real competition, businesses get sued and punished for breaking contracts and defrauding people, and are kept accountable in this way. But just try to sue the government when you are unjustly harmed by it!
The reason real competition is a good thing is because good businesses get bad ones out of the consumer’s way. Can the government put someone out of business? Most certainly! But it will have the opposite effect: an otherwise good business will be replaced by a poorly performing government agency, or a government-favored monolithic business that behaves almost like a government agency.
If Washington really wanted to give consumers more choices they would remove legislative and regulatory barriers to competition across state lines for health insurers. They would remove barriers for new and innovative models of healthcare and tort reform. They wouldn’t have run so many church and charitable hospitals out of business. Washington is keenly interested in healthcare reform, but it is certainly not going to increase competition or to expand your options for healthcare.
Gospodine, ako ja mogu čitati dopisivanje dvojice trećerazrednih nickova oko toga dal je netko nekome prodao ili nije i ako nije zašto nije i to po temama koje nisu za to predviđene, onda se i ti potrudi ili preskoči: kako ti je draže? Pozz
