asterisk2a + supply-demand   15

Hugh Hendry Capitulates: "Can't Look At Himself In The Mirror" As He Throws In The Towel, Turns Bullish | Zero Hedge
First David Rosenberg, then Jeremy Grantham, and now Hugh Hendry: one after another the bears are throwing in the towel. As Investment Week reports, speaking at Harrington Cooper's 2013 conference this morning, Hugh Hendry said "he is no longer fighting the two-way feedback loop which is continuing to boost risk assets." The reflexive feedback loop envisioned by Hendry is the following and centres on the currency war being played out between the US and China, "in which US QE prompts dollar-denominated investment to head to China, and China fights the resulting upwards pressure on its currency by manufacturing an investment boom. Hendry said this creates a "global supply glut", leading to falling US inflation expectations (as this supply far outweights US domestic demand) - which in turn prompts the Federal Reserve to loosen policy once again." Rinse. Repeat. [... DONT FIGHT THE FED ...] [...] You have got to be in things that are trending.
HughHendry  supply-demand  savings  glut  supply  glut  QE  ZIRP  deflation  deflationary  reflation  inflation  monetary  policy  unconventional  monetary  policy  modern  monetary  theory  NIRP  negative  real  interest  rate  liquidity  liquidity-trap  WallStreet  asset  bubble  blackswan  fat  tail  Fed  GFC  Debt  Super  Cycle  trading  proptrading  hunt  for  yield  financial  repression  New  Normal 
november 2013 by asterisk2a
OECD Warns UK Faces Housing Bubble | Zero Hedge
The Great House Price Bubble? - http://www.bbc.co.uk/programmes/b03j0nw1 + http://www.zerohedge.com/news/2013-09-13/uk-realtors-ask-central-bank-halt-housing-bubble " Estate agents and surveyors have become so concerned about the dangers of another unsustainable housing boom that their trade body is urging the Bank of England to limit national house price growth to 5 per cent a year. " ... same in Germany's Cities.
property  bubble  UK  demand  and  supply  supply-demand  Funding  for  Lending  Scheme  Help  to  Buy  Scheme  Politics  GeorgeOsborne  davidcameron  2013  policy  folly  policy  error  Germany  speculative  bubbles  asset  bubble  bubble  unintended  consequences  ZIRP  QE  NIRP  negative  real  interest  rate  monetary  policy  BOE  ECB 
november 2013 by asterisk2a
Economic policy: Paved with good intentions | The Economist
Although the debate [austerity] relates to the UK, I think it has a much wider resonance. And indeed, to a student of history, it has fascinating parallels; economic policy-making was rethought in the mid-1970s, but the same debates are popping up again. [...] Margaret Thatcher on ZIRP & QE "Let us print the money instead. Because what that is saying is let us quietly steal a cerain amount from every pound saved in building societies, in national savings, from every person who has been thrifty." [...] [ZIRP & QE is no free lunch - it has consequences, known and unknown, unintended.]
infrastructure  investment  monetary  policy  Margaret  Thatcher  Mark  Carney  Europe  reflation  zombie  banks  New  Normal  BOE  deflation  macroeconomics  macroeconomic  policy  QE  intellectual  fiscal  policy  free  lunch  UK  PIGS  debt  monetisation  Martin  Wolf  austerity  greatdepression  zombie  consumer  economic-thought  deleveraging  economics  debt  monetization  Richardkoo  liberal  economic  reform  IMF  GFC  output-gap  unintended  consequences  margaretthatcher  Troika  davidcameron  greatrecession  debtoverhang  economic  history  financial  repression  Super  Cycle  sovereign  debt  crisis  monetarism  ZIRP  demand-curve  PIIGS  fiscal  theory  supply-demand  MervynKing  GeorgeOsborne 
may 2013 by asterisk2a
Richard Koo Explains It's Not The Fed, Stupid; It's The Fiscal Cliff! | ZeroHedge
US is beginning to look more like Japan. The Japanese experience made it clear that when the private sector is minimizing debt (deleveraging) with very low interest rates, there is little that monetary policy can do. The government cannot tell the private sector 'don't repay your balance sheets'
because private sector must repair its balance sheets. In Koo's words: "the only thing the government can do is to spend the money that the private sector has saved and put that back into the income stream" - which (rightly or wrongly) places the US economy in the hands of the US Congress (and makes the Fed irrelevant).

Deleveraging even with ZIRP & QE123 & OpTwist & Language shows how sick balance sheet of private sector is. + Lack of Confidence + Structural Impairments of Domestic & Global Economy !

http://bloom.bg/njrCIQ

Koo advocating continued fiscal stimulus.

Fed engaged more aggressive w QE3/OpTwist & ZIRP ext. because nobody would bet on Congress to avoid Fiscal Cliff 2012/13.
globalisation  global-economy  faultlines  global  imbalances  structural  imbalance  OpertationTwist  trust  confidence  lostdecade  lost  barackobama  presidency  election2012  Japan  academics  academia  economics  supply-demand  stimulus  QE2  MBS  QE  deleveraging  fiscal  stimulus  fiscal  policy  2012  Cliff  monetary  theory  ZIRP  monetary  policy  property  bubble  benbernake  Fed  debt  bubble  balance  sheet  recession  debtoverhang  QE3  USA  Richardkoo 
september 2012 by asterisk2a
Rosenberg Sees U.S. Growth Potential Near 2%-2.5%: Video - Bloomberg
Sept. 11 (Bloomberg) -- David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., talks about the outlook for financial markets, the U.S. economy and Federal Reserve policy. Rosenberg, speaking with Tom Keene and Sara Eisen on Bloomberg Television's "Surveillance," also discusses Deutsche Bank AG and the banking industry (Source: Bloomberg)

-
Even with credit growth resuming, GDP output will be less than in the past.

Structural imbalance, impairment.

Talking about Equity Monologue all have (Bloomberg, WSJ, FT).

Lack of domestic demand, due to still existing problems that partially caused GFC.

Businesses lack confidence to start new projects. New projects, new technologies, new industries (ie renewable energy, infrastructure, recycling industry?).
Long-term goals needed - to instil certainty. The spark is missing. That moment in time, realisation, inspiration.
Fix fiscal policy.
Political courage, shared sacrifice.
No fairy tales.
lostgeneration  fiscal  policy  election2012  Politics  confidence  uncertainty  economics  supply-demand  WallStreet  debtoverhang  structural  imbalance  balance  sheet  recession  lostdecade  greatrecession  GFC  2012  USA  output-gap 
september 2012 by asterisk2a
The euro crisis: We haven't forgotten how to make depressions | The Economist
GREECE is in a depression. A real deal, no kidding, bad-as-the-1930s depression.

The Greek economy is imploding for no other reason than that the prices are wrong.

***

sticky wages = sticky price for everything else

+

1930's Depression was excaserbated by countries sticking to the Gold standard.
The Euro is today Greece's, Spain's and so forth (PIIGS) Gold Standard that is ruinous.
EU Politicians made a grave error of judgement and assumptions - and are too stuck up as always to admit mistakes and revert course, OR drive full steam ahead with fiscal integration and assuming liabilities as a whole.

***

http://www.economist.com/node/21560252
book  Brussels  policy-makers  politics  economic-thought  goldstandard  gold  sticky-wages  economics  supply-demand  demand-curve  economic  history  Euro  EMU  Europe  policy  folly  policy  error  depression  2012  sovereign  debt  crisis  austerity  Greece  greatrecession  greatdepression 
august 2012 by asterisk2a
The Trade Off To Record Corporate Profits: Your Miserable Salary | ZeroHedge
13 quarters in and Labor Comepnsation is still lower than where it was when the Great Financial Crisis began.

Because corporations now have all the leverage.

---

With so many want work, corps have the heft in hand to pay less.
Oversupply on workers vs Demand Shortfall.

Reason is, because of structural flaws (ie property holder unwilling to move - thus accepting lower wages to get new or other job or even keep same job), global economy ...

Full employment is a distant dream considering all circumstances.
debt  bubble  deleveraging  debtoverhang  economic  history  economics  2012  USA  recovery  supply-demand  greatrecession  GFC  unemployment  output-gap 
july 2012 by asterisk2a
Buttonwood: The nationalisation of markets | The Economist
... price lost its signal service due to policy of QE, ZIRP
... underwater balance sheets seem not to matter anymore

... Trapped in a cage of our own making
... To get free we either cut of limbs and risk bleeding to death
... Or we starve ourself so long till we fit between the bars

history suggests that once governments get involved in a sector, they find it hard to withdraw. Given the weak outlook, it is hard to imagine the circumstances in which liquidity support for the banks will be withdrawn, or the policy of low interest rates abandoned. This is a new financial and economic era.
politics  politicalscience  political  economy  2012  financial  repression  new-normal  greatdepression  economic  history  toobigtofail  cartel  subsidies  Basel3  basel  ECB  Fed  BOE  LTRO  greatrecession  GFC  supply-demand  monetary  policy  ZIRP  unintended  consequences  QE 
may 2012 by asterisk2a
Coryton oil refinery set to close | Business | The Guardian
Real example of financing conditions ... Credit Crunch

Stephen Pearson, joint administrator of Petroplus, said talks had been held with more than 100 would-be investors and purchasers, but financing was in short supply for potential bidders. "The current financing market is exceptionally difficult," he said.

Add Uncertainty in Enegry business + Supply (in EU) is overshadowing Demand because of Demand Shortfall (Great Recession + Technology advances on Energy Efficiencies and MPG Efficiencies)

http://www.zerohedge.com/news/one-uks-biggest-refineries-prepares-shutdown-drivers-concerned-about-gas-price-spike
supply-demand  economics  greatrecession  2012  creditcrunch 
may 2012 by asterisk2a
A Sign Of The Hiring-pocalypse | TechCrunch
An entrepreneur-turned-venture investor told me over the weekend: Booms are the worst time to build a company.

Only capital is cheap. Everything else is expensive — talent most of all.

---

Fed's ZIRP and QE (and Bailout bonanza, moralhazard) - did fuel VC/Seedfund pockets - overthrowing capped supply (investments in companies).
ZIRP and QE do increase the demand for alternative investments. And skews investors risk sentiment. They take on more risk in hope for the next big thing that brings them that more ROI that the market can not produce due to World Wide QE, ZIRP, currency debasement, Sovereign Debt Crisis.
monetarism  monetary  theory  monetary  policy  Fed  behavioral  finance  behavioral  economics  QE  supply-demand  economics  unintended  consequences  ycombinator  instagram  Zynga  Google  Facebook  Technology  Boom  bubble  entrepeneurship  venturecapital  vc  ZIRP  2012 
april 2012 by asterisk2a
Education and jobs: Room at the bottom | The Economist
ONE person out of every three who graduated from university in the past six years is in a job requiring only the skills of a school-leaver, up from one in four a decade ago. A 21-year-old graduate is about as likely to be unemployed in the year he leaves full-time education as a 16-year-old school-leaver with only GCSEs. The official figures make depressing reading for young people hoping that the better job higher education is meant to assure them will pay back the sums they have borrowed for college. This is not all a consequence of the recession. The laws of supply and demand are one reason. The number of recent graduates rose by almost half between 2001 and 2011; it is not surprising that some moved downmarket to find work.
=
Does the West need full employment? Can the West manage full employment? Is it possible? Maybe not. Producing more skilled people may not get these people a higher paying job. Instead of minimum wage, why not guaranteed income; working or not.
economics  unintended  consequences  supply-demand  college  university  bubble  greatrecession  2012  UK  employment  youth  unemployment  education 
april 2012 by asterisk2a
Global growth: In search of demand | The Economist
.... One would hope to see adjustment occur as former surplus countries grow into demand engines. While that process occurs only slowly, the world economy will be vulnerable to outbreaks of recession, and the risk of market interventions—including protectionism.

... The West can not hope for a domestic demand let recovery with overburdened private market and austerity at public level.

.... Debt Overhang, Balancesheet Recession (Koo), Deleveraging --> is the game in town.
economics  supply-demand  rebalancing  global-economy  global  imbalances  tradedeficit  trade  balance  QE  BOJ  debt  bubble  2011  2012  Japan 
february 2012 by asterisk2a

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