Archives for category: Central Banking role in US and Eurozone to be revised

It has taken me nearly six years but I have now arrived at the conclusion that this European Union (EU) and the Eurozone have proven to be real failures and that if one went down to brass tacks it would show that having this “Union” (sic) and the euro did not really make a positive difference; that the “whole shebang” should be scrapped, leaving only “pieces” (to be defined) to regroup  differently and basically  keep a “customs’ union”.

I have spent six years trying to understand and analize in as much depth as possible all this, written sinceApril 2011 – 2 000 post in my blog:“macrovolatility.com”, written in 2014 / 2015 two books in self-edition with Amazon with self-explanatory titles: “Why Obsolete Macro Governance Is Killing the World Economy” and “Growth through Structural Reforms” (With Leadership and Competence Great Opportunities Exist).

I am not agreeing anymore with what I had written many times in this blog, the last one on 06/25/2016 in my post: “Eurozone Governance Radical Change Needed to get to a “2 Speed” Area Organization“, it will not work either…(please refer to this by clicking on above link).

In fact the last drop was when reading several times these last days that Greece’s situation was still being discussed by all “the powers to be” – re The Guardian‘s 02/11 /2017 article:No crisis’ on Greece bailout deal, says eurozone chief”…!!!
All these European/Eurozone “top officials” are such great techno bureaucrats that reality has totally  escaped from their pseudo “thinking” (sic), in six years they have not been able to decide on Greece’s situation which only represents 1 to 2% of EU’s GDP!!!

In this blog I have written since at least 5 years that Greece should leave or be exited from the Eurozone for its own sake, it would now be quite rich with a low valued drachma hugely expanding tourism, the number one wealth item, instead it has cost the Eurozone a “fortune”, protected corrupt local politicians who refused to exercise the results of the June 2015 referendum where the bailout conditions were rejected by a majority of over 61% , with the “No” vote winning in all of Greece’s regions, the Greek people wanting Greece out of the hands of the totally incompetent Eurozone leaders, IMF, ECB and German Chancellor Merkel, the real Eurozone leader.Greece has 180% indebtedness vs GDP!!!

Greece is just the tip of the iceberg, add Italy (3rd Eurozone economy) with a huge debt (135% of GDP) and only 1% growth, Spain (4th Eurozone economy), probably the most competent and growing (3%!) mediterranean country, still hampered with huge unemployment, with banks not passing on ECB’s continued  flow of printed liquidity to credit facilities to the biggest employer, the SME/TPEs, its indebtedness as % of GDP having grown to be 100%.

France 2nd biggest Eurozone economy, with miserable 1.1% growth, huge unemployment, is under great political stress and  the Number one, by far, Eurozone economy, Germany (1.9% GDP growth and “only” 71% indebteness as % of GDP) continues with is parochial self-serving Eurozone policy, nobody in Brussels will interfere…

The Eurozone has been conceived as an erratic type of puzzle / potpourri of countries with totally different mentalities and ‘usus”, great differences in social-economic macrostructures, no real EU / Eurozone “Governance and with Germany having benefitted from the euro creation in 1999 onwards with a 20-30%  favorable euro/DM parity which has helped considerably to boost their economy to the detriment of the rest.

There is, finally no way all this will work (what, in reality?)

Let each country solve its own problems, they are all countries with a long history which will serve as the backbone, they need to adapt far more rapidly to all the past, present and future innovations in “technology” and its meteoric evolution, in other words the entire political class needs to change ASAP, let each nation’s government be responsible for their own situations and not anymore EU / Eurozone “Governances” (sic) which have no power and are Germany’s slaves.

Belatedly, as usual, European Union (EU)’s President warns against US President elect divisive tactics to the detriment of the EU’s stability.

US President elect decrees are mostly unacceptable to the civilized world and a (very bad) first in US’s “governmental” (sic) policies, especially the now nearly universally decried anti-immigration decree which this blog is denouncing for the fourth day in a row.

EU has not managed to construct a “working” political, social economic and not even even financial area (the latter beacuse of the erratic policies of ECB) because it has done mostly everything wrong from the beginning of the instauration of the Eurozone and has also accepted totally disparate membership of 28 member countries who do not ressemble each other in mentality and usus and were prone to be a fiasco, which it is, being unable to agree on practically any important topic and subjecting some nations to undue austerity instead of pushing for badly needed structural reforms .

In the 2000 posts I have written in my blog from April 2011 until October 2016 and my two books I have consistently proposed and described the change from the current EU “mammoth” to a radically new compact European Guidance Unit with a division between Northern countries and Southern ones who have nothing in common, with France somewhat in the middle, and due to huge past erroneous political expansion policies continuing with the inadequate integration of ex-satellite Communist countries which have created havoc with totally different remuneration, taxation and social protection “policies”.

I now, finally, feel that this renewed construction of Europe is also doomed and that it is preferable to go back to a customs’ union and abandon the euro, thus leaving each country to devise its own political and social economic systems, own deficit and indebteness ratios to GNP and be able to take its own eventual financial corrective actions.

If individual countries are having such a hard time governing themselves, blocs of countries will not be able to do their job plus a comprehensive “area” job with an umbrella as the euro which was devised far too early and totally unprepared with countries who had no harmony whatsoever in basic social economic policy structures.

The world has changed enormously and in a meteoric way technologically / innovationwise.

Governances need to adapt to these formidable changes which is very difficult for what seems to be a “lost political generation”.

Lets’count on and turn to the current young one who is in phase with these changes, it’s  a worthwhile bet I believe (as a “senior”…)

Please read below, under More,  NYT‘s 01/31/2017 article:”Trump Threatens Europe’s Stability, a Top Leader Warns”

Read the rest of this entry »

I have not been writing any posts since 9th February, 2016 because it became too monotonous to write all the time the same comments with nothing happening because of the Governments’ obsolescence in general and the  total inability of the Eurozone Governance (sic) to reform macro social-economics in this supposed “common interest” area.

This may seem an arrogant statement but I have written 2000 posts from April 2011 until October 2015 and (only) three posts since October 2015 and made a great number of concrete alternative proposals not limiting myself to criticism.

I have also written – 2014 / 2015 – in self-edition – Amazon – two books whose titles are self-explanatory: “Why Obsolete Macro Governance Is Killing the World Economy” and “Growth through Structural Reforms” (With Leadership and Competence Great Opportunities Exist).

I am now quoting entirely the Express.co. UK’s 06/11/2016 article: “Eurozone heads towards its next monetary crisis” and showing it under MORE at the end of this post – you can also read it by clicking on above link.

This article, in a nutshell, relates to the incompetence of the EU and to the current domineering subject: Brexit or no Brexit, leaning heavily on the Brexit side.

My Comments

The only reason I am writing this short post is because of my continuous (5 years) largely repeated total disagreement with Central Banking dominant positions and “policies” (sic) in  the US, the Eurozone, to “limit” myself to these two huge areas.

The below cited article touches on the disgraceful “policies” of the ECB, which is trying to be  even worse than the FED (a real challenge!…) .

Last year I tried to be published by a traditional large and well known publisher in the UK / US and since they could not use the material in my two self-edited books with Amazon I wrote 100 pages of an eventual third book which I had entitled: “Structural Reforms Impeded by Central Banking”.

This was refused and the main reason was that it was not “classroom material” and that it was “iconoclastic”. I refuted the second point by arguing that there were no idols to be destroyed but that long awaited strong (not “reformettes”) social-economic structural reforms were not being achieved because of , in general, Governments ‘ ineffectiveness and Central Banking flooding markets with printed money at even negative interest rates by ECB, which made it easier for most ineffective Governments in the Eurozone to avoid implementing social-economic structural reforms, and by the same token to increase already huge indebtedness.

Now, Dragui, one of the big culprits that the Eurozone is not really getting out of recession, wants to initiate “helicopter” money flooding (see below article) to push demand (hopefully a joke?).

It suffices to observe the situations in Greece (the total absurdity, it should have been exited long ago), Spain (contaminated by the Greek situation and the popular new “Greek type” political parties’ expansion, with no Government since months), France (continuing going down the hill because of no capacity to reform itself), etc, etc…!

Conclusion: Nothing basically changes and if so it is for the worse – relatively.

Read the rest of this entry »

 

As repeated a”thousand” times (*) in this blog Central Banks work for Markets and to Save “Big Banks Too Big to Fail”.

Central Banks are “Independent”, they do what they want!

Point in case now among many others in Europe: Italy (Big talker Dragui’s home)

Italy is in the middle of a very severe Bank crisis due to “Bad Receivables” which produce “Bad Debts”, which will remain unpaid.? But, surely the ECB (European Central Bnk) will print some more  to “save them” (ECB always “saves” somebody, until they go under…).

Mr Dragui “interrogated” (!) Italian banks as to their Bad Debts’ situation (which is a record 17.5% – Eurozone’s average seemingly (?) is around 5% – and represents 200 Billion euros!)

ECB should have “known” way  ahead all the facts of this essential economic / financial data and taken appropriate action, several “gimmicky “remedies – like “bad banks”…had been considered.

Real  economic steps are to provision realistically bad debts (and tighten banks’operations and remunerations, like is done with private corporations), but ECB (and EU / EC) do not want this, they seemingly (?) prefer to increase banks’ capitalization, which would require more “money”, which ECB would print and “save ” the banks…

These would be the “normal procedures” (sic), those which have cost the Eurozone trillions, it is called “fleeing into the future” (“la fuite en avant”) and wait for “miracles”…

One really wonders what ECB does, apart from issuing trillion QEs?

The ECB is 200% responsible for the huge increase in Eurozone Indebtedness and wanting to “solve” all matters with Trillion QE’s. Pushing Indebtedness in a non controlled banking system is “asking for it”, and the result is pushing “bad loans” and getting “bad debts”.

ECB did “not care ” to make sure that the Banking System was Operating correctly (that is not “sensational” enough for Mr. Dragui!), not that strongly increasing Bad Debts might cause another “Bubble”.

ECB has not done their job in accelerating the Eurozone Banking Union and really Controlling private banks operations!

I will not even mention Brussels’ EU or EC, they do nothing!

(*) I have written 2000 posts since April 2011 and stopped (I write an occasional post like today when matters get out of hand) my blog in October 2015 because there was no purpose to continue writing.

I have written and published 2 books: “Why Obsolete Macro Governance is Killing the World Economy” (Amazon- September 2014) and “Growth through Structural Reforms” (Amazon – April 2015). I had written over 100 pages of a third book, temporarily called: “Central Banks Impede Structural Reforms”, sent this text to 5 big publishers and was refused because it was not a “text book” and also was considered “iconoclastic !

Nobody really want to know…

 

 

European “Non Governance” and tremendous and expensive Bureaucracy has done Nothing for Decades and needs to be Removed entirely, if not like Garcia Marquez said, it is: “An Announced Death”.

I only write sporadic posts here since it is useless to try to propose meaningful and significant changes….

I have been writing  on Football (Soccer) since October, 2015, more amusing, but only to some extent; due to all the problems related to now, Football’s “Governance”… – FIFA’ and its longstanding and huge Corruption, my blog being “footballgreatest.com”.

Photo – Prime Minister Matteo Renzi

Follows a translation made by me of Le Figaro’s Premium’s  01/22/2016 article on young and exceptionally “productive” Italian Prime Minister Mario Renzi declarations on Europe: “Fed up with Europe, Matteo Renzi denies arguing for the sake of politicking”.

I subscribe nearly completely to Renzi’s declarations, after having written 2000 posts and two books with self-explanatory titles: “Why Obsolete Macro Governance is Killing the World Economy (September 2014 -Amazon) and “Growth through Structural Reforms” (April 2015 – Amazon) on this subject since I created my blog in April 2011.

No serious and complete Structural Reforms were made (only “reformettes”), total real unemployment ( including under employment) is still huge, instead Indebtedness is astronomic thanks to totally erroneous accomodative (interest and quantitative wise) Central Banking “policies” (sic): ECB (plus FED, Bank of Japan, Bank of China, etc…), growth being far too slow and solely dependent on record low Oil prices (which are killing the oil related economy) and which will not last, the banking system is preparing is umptieth – Oil and Assets – bubble, the euro exchange rate is nearly at bottom and will not last, Migration problems are not tackled (Germany is totally wrong!), if this continues the UK will exit – “Anything Else” ? – Woody Allen‘s film.

Photo – Woody Allen in “Anything Else” – 2003

Quotes – My comments in italics – in the text

Budgetary flexibility, European investments, management of migrants, state aid, banking crises, EU funding for Turkey: the grievances accumulate between the Italian leader and Brussels.

Migration policies, review of the Dublin and Schengen agreements, state aid to banks in difficulty, flexibility of Public Accounts: the violent diatribe which set fire to the powder a week ago in the relations between Matteo Renzi and Jean-Claude Juncker has its origins in a variety of long-simmering grievances.

Paradox of a leader whose impeccable European credo gave his Democratic Party 8,000,000 votes in the elections of May 2014 in the Strasbourg Assembly, which now feels despised to the point of accusing the European Commission of “two weights, two measures”.

A reconciliation should profile his trip to Berlin on January 29, and then the arrival of Juncker in Rome. Inevitably, it will probably not be painless for Europe, nor especially for Italy.

The Italian prime minister denies being “an argumentative polemicist or politicking”: “Europe is in a crisis of identity, everything has failed. It must change. We have our proposals and our allies are not lacking. Brussels is not infallible, “he said. His Secretary of State for Europe Sandro Gozi adds: “Some in Brussels want to send the revision of institutions after 2019, with the future Commission. Such a long period is one that Europe cannot afford anymore. ”

The most heated debate concerns the € 3 billion promised by the EU (i.e. Germany – who continues to lead the Eurozone – My Comment) to Turkey for its help curb migration. Matteo Renzi threat to suspend the Italian contribution to this fund and asks that all aid to Turkey come from the regular budget of the Union.

On the pretext that Ankara would not give sufficient guarantees on its allocation to migrants. Massimo Franco, a columnist for the Corriere della Sera, “this negation by Renzi for a Turkey fund is being used to relegate Matteo Renzi in a corner and shows a European exasperation against him that he should not underestimate (in other words: “Renzi, shut up!”- my comment).

Disagreement still on the destination of the 40,000 migrants landed in Greece and Italy and that should have been distributed in the rest of Europe. The July 20915 agreements remained unfulfilled.

Italy also calls for an urgent revision of the Dublin agreement to regulate migratory flows. Dutch Prime Minister Mark Rutte, who chairs Europe for six months (who is implicitly agreeing with Germany, so far… ,my comment) the fund immediately approved the Turkish funds and request to accelerate the implementation “too slow” in its discretion, also to do so with the “registration centers” (“hotspots”) which collect the fingerprints of migrants to their landing.

Other sticking points: the public wants assurances that Italy finances its troubled banks, despite the threat of infringing Brussels procedures…. Or, the absence of the distribution of the European investment program that Matteo Renzi despairs of seeing happen.

And, above all, the ‘flexibility’ public accounts (0.2% of GDP) that Italy asks Brussels as a “due” to address the additional expenditure incurred by Italy to host 180,000 migrants the last year and probably as much this year (This is where I diverge, if all countries want subsidies for Migration problem solving, Brussels needs to create a Special “Migration”fund with Savings made in Brussels – an impossibility for “immobile” Brussels! – Needless to say – My Comment).

These debates have revealed a certain isolation of Italy on the European stage. None of the major leaders has added its voice to the protests Matteo Renzi. Commissioner Pierre Moscovici (a “clown” – my comment) considers “unfair” to criticize Juncker. And (even – contaminated…, my comment…) Italian Federica Mogherini, High Representative for Foreign and Common Security Policy, “Ms CFSP” has quietly sided with the President of the Commission (Juncker).

The accused (Renzi…), however, as some in Europe to speak up for the purpose of domestic policy, to cut the grass under the feet of the M5S and populist Northern League, seems reductive. In Parliament (Italian), government reforms are all adopted one after the other with a comfortable majority.

 

 

As usual US government and FED hide Real US Unemployment situation which is not 5% of total labor force in December 2015 but 9.9% – re below BLS chart which shows only 1.2 points improvement versus December 2014 9.9% vs 11.1%, because Under Employment  where all the  Employment problems reside is still very high – 4.9% in December 2015 vs 5.7% on December 2014.

No wonder that still many voters continue to express widespread dissatisfaction with their own prospects and those of the larger economy. The main disrupting factor that has been impacting and still does latest monthly jobs reports is further evidence that wage growth for the typical worker remains sluggish. Average hourly earnings fell slightly in December 2015, leaving the overall yearly gain at a meager 2.5 percent.

This  comes close to stagnation in wages and is mainly due to the large increase of part-time jobs at, obviously, lower pay, and that in December 2015, year-over-year (yoy) growth in multiple jobholders was an 11-month high, while yoy growth in single jobholders wast a three-month low. Since May 2015 the number of multiple jobholders has increased by 752 000, while single jobholders have increased by 429 000. In other words, multiple jobholders have been responsible for 64% of the net job gains since last spring. The disproportionate importance of multiple jobholders – forced to “make a living” out of it – shows why the labor market is weaker than it seems.

NYT published a long article on 01/08/2015 entitled: “Robust Hiring in December Caps Solid Year for U.S. Jobs” (you can click on this link if you want to read the article) about 292 000 jobs created in December 2015 with not ONE word about Under Employment…

US Growth of 2.8% in 2015, whereas high comparatively to most Western countries  is still not sufficient to change significantly the Total unemployment situation in the US,

All of my posts on this critical social-economic subject since the creation of this blog in 2011 show reasons why and propose concrete approaches, but the press and the FED continue not showing the Under Employment situation and, accordingly, are falsely informing the US public.

Until the Central Banks, in this case the FED, are not restricted in their role which is to control the banking sector performances and control pricing / inflation, the REAL Unemployment situation will not improve significantly.

The US is lacking having a Minister of Economy whose role is to set social-economic policy, this NOT being the FED’s role 

 BLS – A-15 Chart – US Unemployment – December 2015

Measure
Not seasonally adjusted
Seasonally adjusted
Dec.
2014
Nov.
2015
Dec.
2015
Dec.
2014
Aug.
2015
Sept.
2015
Oct.
2015
Nov.
2015
Dec.
2015
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
2.5
2.1
2.1
2.6
2.2
2.1
2.1
2.1
2.1
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
2.8
2.3
2.4
2.8
2.6
2.5
2.5
2.5
2.4
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)
5.4
4.8
4.8
5.6
5.1
5.1
5.0
5.0
5.0
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
5.8
5.2
5.2
6.0
5.5
5.4
5.4
5.4
5.4
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force
6.7
5.8
5.9
6.9
6.2
6.2
6.2
6.1
6.1
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
11.1
9.6
9.8
11.2
10.3
10.0
9.8
9.9
9.9
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.

 

 

Happy New Year!

This is my first post since a “one post only” I issued on December 16, 2015: “Eurozone Dead due to No Governance, Immobilism and No Reforms”.

I had decided since October 2015 to interrupt writing daily posts since whatever I wrote – constructively – did not make a difference.I  Seeing that I was repeating myself constantly I wrote and published in self-edition (Amazon) two books whose titles are self-explanatory and resume the content of the 2000 posts I had issued since I started this blog in April, 2011: “Why Obsolete Macro Governance is Killing the World Economy” (September, 2014) , “Growth through Structural Reforms” (April 2015),  plus the beginning  (over 100 pages) of a third book:“Central Banks Impede Structural Reforms”, which was refused by well known classic (not self-edition) publishing companies because they felt it was not a classic text subject and labelled it “iconoclastic” (truth based on facts is seemingly considered as such…).

I therefore opted to create a new blog in October, 2015 with a lighter subject :“footballgreatest.com” , where am writing about soccer, the tag line being: “The blog that welcomes all fans who have a passion for writing about football”, but even in this universal Sports’ area I encountered the same (and highly corrupt) Governance problems than those I had been writing about in my macrovolatility.com blog:The huge FIFA Mess!, I might start writing fairy stories (non violent ones…)

Coming back to my today’s post content and in line with content of my non published book (“Central Banks Impede Structural Growth”) I am referring to declarations made by the former Dallas FED governor Robert Fisher who admits We front loaded a tremendous market rally to create a wealth effectThe Federal Reserve is a giant weapon that has no ammunition left.

I am quoting  the text of his declarations and preceding Quotes with my own – short – Comments

My Comments

As I have been writing in my posts since practically the beginning (nearly 5 years ago) I think that Central Banks worldwide (mainly Eurozone’s ECB, Japan’s Central Bank, China’s dominated by Government Central Bank, etc…), following the (bad) example of the US FED have taken over setting social- economic policy at least for the last decade, longer in effect….

This has included ineffective moves to fight unemployment (which is not their domain), publishing only classic unemployment and not referring to / emphasizing the very damaging under employment situation now even bigger than classic unemployment.

All this instead of trying to regulate the banking system and make it more performing for smaller corporations who are the biggest employer in any advanced country, and control non existing inflation, well let us say badly informed inflation where oil pricing – as one big item among others – should be separated from consumption goods which actually do show inflation.

The current end result is known by those who accept looking at facts (real macro data): slow growth (in general), big under employment (in general) with highly and artificially (through Central Banks ‘ “motivational liquidity enforcing moves”) growing markets which might create another bubble, and last but not least backing even higher indebtedness, all this helping (mostly) inefficient Governance around the world to avoid making the badly needed Social-Economic Structural Reforms.

A very good “example” (sic) is given by the Eurozone (non) Governance which is not able to produce more significant, and necessary, growth (only 1.5% in 2015 – thanks to Germany and Spain) having had the benefit of exterior factors such as oil prices (Brent at 36 USD currently), a very low (again since the euro creation) euro exchange rate vs the USD of (currently) 1.08, and no interest rate charged by ECB (negative rates if banks park funds with ECB…).

Nothing has changed in the last three months, matters got worse with migration out of Syria, large terrorism attacks in Europe, also in US coupled with US made violence due to free guns’ sales, China’s to be expected economic’s decline, etc…

Nothing will change until Governance world wide changes its bureaucratic and “politicking”approach to a realistic one, immodestly please refer to my books with concrete and I believe, constructive “proposals”, basically meaning that Social Economic Structural Reforms Need to be Fully implemented.

Quotes a video was made with Fischer‘s declarations:

Fischer: What the Fed did, and I was part of that group, we frontloaded  a tremendous market rally starting in march of 2009. It was sort of a reverse Wimpy factor. Give me two hamburgers today for one tomorrow. We had a tremendous rally and I think there’s a great digestive period that’s likely to take place now. And it may continue. Once again, we frontloaded, at the federal reserve, an enormous rally in order to accomplish a wealth effect. I would not blame this [the 2016 selloff] on China. We are always looking for excuses. China is going through a transition that will take a while to correct itself. But what’s news there? There’s no news there.”

“Box”: I guess the question Richard is: How ugly will it get? If you do see this big unwind of Fed Policy which fueled a 6 and one-half year bull market, what does it look like on the way down?

Fisher: “Well, I was warning my colleagues, if we have a 10-20% correction at some point. … These markets are heavily priced. They are trading at 19 and a half time earnings without having top line growth you would like to have. We are late in the cycle. These are richly priced. They are not cheap. …. I could see a significant downside. I could also see a flat market for quite some time, digesting that enormous return the Fed engineered for six years.”

“Box”: Richard, this digestive period, does it usher in an era where assets can’t perform in the absence of accommodation?

Fisher: Well, first of all, I don’t think there can be much more accommodation. The Federal Reserve is a giant weapon that has no ammunition left. What I do worry about is: It was the Fed, the Fed, the Fed, the Fed for half of my tenure there, which is a decade. Everybody was looking for the Fed to float all boats. In my opinion, they got lazy. Now we go back to fundamental analysis, the kind of work that used to be done, analyzing whether or not a company truly on its own, going to grow its bottom line and be priced accordingly, not expect the Fed tide to lift all boats. When the tide recedes we’re going to see who’s wearing a bathing suit and who’s not. We are beginning to see that. You saw that in junk last year. You also saw it even in the midcaps, and the S&P stripped of its dividends. The only asset that really returned anything last year, again if you take away dividends, believe it or not, was cash at 0.1%. That’s a very unusual circumstance.

“Box”: Richard. This has been an absolutely extraordinary interview. For you to come on here and say “I was one of the central bankers who engineered the frontloading of the banks, we did it to create a wealth effect” and then you go on and tell us, with a big smile on your face that we are overpriced, which is the word that you used, and there would be some digestive problems,  are you going to take the rap if there is a serious correction in this market? Will you equally come on and say “I’m really sorry we overinflated the market”, which is a logical conclusion from what you’ve said so far in this interview.

Fisher: First of all I wouldn’t say that. I voted against QE3. But there’s a reason for doing this. Let’s be fair to the central banks. We had a horrible crisis. We had to pull it out. All of us unanimously supported that initial move under Ben Bernanke. But in my opinion we went  one step too far, which is QE3. By March 2009 we had already bought a trillion dollars of securities and the market turned that week. To me, personally, as a member of the FOMC, that was sufficient. We had launched a rocket.  And yet we piled on with QE3, but the majority understandably worried we might slide backwards. I think you have to be careful here and frank about what drove the markets. Look at all the interviews over the last many years since we started the QE program. It was the Fed, the Fed, the Fed, the European central bank, the Japanese central bank, and what are the Chinese doing?  All quantitative easing driven by central bank activity. That’s not the way markets should be working.  They should be working on their own animal spirits, but they were juiced up by the central banks, including the federal reserve,  even as some of us would not support QE3.

 

 

 

The text below is not by me, but is a 12/16/2015 article by Yves De Kedrel, one of the weekly Le Figaro’s main coeds:“Europe is dying – Europe is dead”, it took them a long time to “understand”…, still they do not offer any “revival” possibilities, are “tired” and resigned…

De Kedrel repeats what my blog has been commenting upon for 4  four and a half years with no results whatsoever, having offered concrete alternatives which is more than most economists and analysts do, reason why I decided to abandon my daily posts since 2 months precisely, because the EC, EU and most country Presidents will always find  (bad mainly) reasons for not doing …

Quotes – Le Figaro’s Yves De Kedrel’s 12/16/2015 article:“Europe is dying – Europe is dead”

Whether in industry, the economy, security, Europe no longer shines in the world. Blame it on a bureaucracy whose sole purpose is to impose standards.
There brutal disappearances like that of Henrietta of England, sister of Louis XIV, Bossuet has immortalized with these beautiful words: “O disastrous night! O dreadful night when suddenly sounded like a burst of thunder, this amazing news: Madame is dying! Madame is dead!

“There are also disappearances that nobody perceives overnight but are the result of successive cowardice of knife strokes and leadership loss.

This is the case in Europe. Like it or not, in the space of a year, the European Union has become a sort of headless duck continues to run, without knowing that it no longer exists.

The ayatollahs of competition were able to prevent the formation of large groups able to cope with the American giants.

Industrial Europe is dead, murdered by the Brussels antitrust officials. By dint of repeating that the European Union should be an area that benefit its 500 million consumers, the ayatollahs of competition were able to prevent the formation of large groups able to cope with the American giants. In the space of a month, no less than three mergers to over $ 100 billion have been announced and will lead to the creation of industrial titans. Meanwhile Brussels officials continue to review rapprochement projects with the alpha

Omega and the notion of “relevant market” exceeded at the time of globalization and emerging markets.
The European Energy and Transport which was however one that existed before the Treaty of Rome, with Ceca, is dead, too, murdered by Angela Merkel after the tragedy of Fukushima in March 2011.
In deciding brutally net halt the use of any nuclear power, German Chancellor killed in the bud any ability of Europe to implement a common energy policy. A policy all the more necessary to meet the climate challenge, the challenge with our geopolitical dependence on Russian gas and industrial challenge, since the energy costs were previously in Europe a competitive advantage undeniable.

Financial Europe is dead too. She died in Athens last June with the intention of imposing any cost to a bankrupt country a doxa in stone there over twenty years and can not be the same for each country in the euro zone. The rule of the 3% budget deficit to gross domestic product has no more meaning than the will of the European Central Bank to limit inflation to 2% at the time when Jean-Claude Trichet was the bagman. Only managed to get by countries that were beyond such standards. As Britain or Sweden. And having let slip its budget deficit does not prevent London today to anticipate 2020 a return to balance its public accounts.

Only remains today a political Europe, a parliament become a machine to produce standards.
Indeed the growth of Europe is dead. The wealth of the euro area is expected to grow this year by 1.6% on average, against 2.5% in Britain, and more than 3% in the United States. Since the introduction of the euro, the “Old Continent” is one that displayed fifteen year the lowest growth rate of the entire planet. While at the same time the European countries had implemented the Lisbon strategy to make Europe “the most competitive economic area in the world (sic).” And when there is no more growth factories are closing, businesses go elsewhere. So that Europe has more than 25 million … of unemployed, twice the population of Belgium and a double unemployment in the United States.

The internal security of Europe also died with the demise of Schengen. It is not France that killed Schengen and the free movement of European citizens. It is with this senseless Angela Merkel will which decided unilaterally to open the doors of Germany to all migrants. Result: by bringing into its territory 950,000 refugees since the start of the year, it has forced its neighbors to restore their borders.

It remains today a pseudo political Europe, a parliament that has become a machine for producing standards, which feeds 30,000 Commission officials, a starry flaghship everyone has forgotten the meaning of the fired Apocalypse of St. John – which is normal for Eurocrats who did not want to admit the Christian roots of Europe – and Ode to Joy should be quickly replaced by a funeral march. Especially if Britain takes its independence in June 2016. De Profundis!

 

“Here we go again”…, like the song, I am referring to the latest example of political inadequacy (to use polite wording): the French “regional” (new) elections.

But this, for the time being, “one-time”post will not restrict itself to France nor its elections, but use them as a sort of “case study” object.

The first tour of French regional elections on Sunday – 12/06/2015 – showed an even higher than expected triumph (it is the right word) of the  traditionally called extreme right party, the “Front National”.

I watched the news on TV at 8 pm European time, for about a quarter of an hour, and decided that I had seen enough. After trying to provide the closest possible estimate it turned out that “Front National” ( FN) was the first party in France with over 27% of voices (later increased to 30%?) – (abstention was a 48.7% high!).

When the “discussion session” started with representatives of the 6 most voted parties, where the first three ones had come close, at 8 pm, to 80% of total “net of abstention (which is the first “party” in France”) votes, the old themes were used again.

The first ones “allowed” to speak were the biggest losers, the Government party (Socialists as they call them), then the other loser – the now called “Republicans”.

The basic “slogan” was that the FN had to be destroyed since it was a danger for France and then the classic solution came – how to avoid that FN gets to “govern” 3 regions out of 13, two of them being second and third largest ones in France, by uniting votes by fusion or some other political gimmick.

Finally, the FN representative, the “bad guy” was given a few minutes…

I should not even talk about elections in a country where I have been a “guest” for some 40 years, on and off (I was born in England), I do so because I love this country and have seen it lose ground for 30-40 years.

This blog (created in April 2011 – 2000 posts to date), plus having written two books: “Why Obsolete Macro Governance is Killing the World Economy” and subsequently:” Growth through Structural Reforms”, has been mute for several months, since I got fed up writing about the same “old themes” and writing about concrete alternatives: obsolete governance, dominant central banks taking over setting economic / financial policy, absence of real and complete social-economic structural reforms, etc…

All I want to “say” now, is, that to “ignore” 27 -30% of an electorate is offensive to all those people, who, for one reason or another, voted for it, we are supposed to be a democracy!

Is it really a vote coming out of “Anger”(?), and, if so, against Whom: The French Governance, the European (non) Governance, Migration, Others???

If so, it is an anger that comes from afar.This anger started in earnest under François Mitterrand (1984, first electoral success of FN), has grown under Jacques Chirac and Lionel Jospin, first declined and then grew even more under Nicolas Sarkozy, but Francois Hollande will hold before history the sad privilege of it having detonated it even further.

What has been achieved to improve the situation in France (and in Europe, mainly Eurozone)? Very little, if any.

Because to “combat” anger is a “mirage” and not exactly “constructive”, whereas a motivational and realistic  – implemented – social-economic policy can do miracles.

In order to obtain you have to give (“donnant, donnant”). Not done – This is why “political” Europe is a fiasco, there is no “social-economic” Europe, and there is not even a “financial” Europe (true – ECB ? – the “creative” (sic) Eurozone central bank).

No wonder that “the people” do not vote massively, they are lost, there is no credible (Local – National / European) governance any more and this has lasted too long.

Europe must return to its foundations: ensure that the European identity is not “sold out” and aggressed by terrorism which in the meantime has infiltrated European nations also, this meaning that the regal functions of Defense, Justice, Migration, “Intelligence” (without becoming”Big Brother”) should be kept in a Central European Unit.

Since, obviously, there has not been and there will not exist a “give and take” approach, each European country will do better by assuming their own responsibilities in terms of social-economic policy setting (job creation – by truly fighting unemployment – “official” plus underemployment improvement) and required complementary financing policies, not allowing financial policies to come before setting social- economic guidelines.

Since tradition, history and mentalities diverge greatly from each country to another, each nation should also assume responsibility for setting – affordable – Education, Health and Social Protection, Cultural policies.

But, from what I very briefly saw on TV yesterday, the “old themes” prevail once more and we are going nowhere…

Reason to make out of this one-time post an intermediary one, hoping that some time in the future a great political figure appears to start getting to the “origin of evil”, which is not difficult to assess, but very difficult to improve without the political “will” to do so.

 

 

As of tomorrow – 10/16/2015 – I will launch a new blog footballgreatest.tumblr.com, because after 4 and a half years I have come to the conclusion that I am repeating myself “ad nauseum” with macrovolatility.com and have lost 3 three fourths of my very appreciated readers because they are also fed up with always the same comments, and I do not want to be buried in the elephants’ cemetery of those who had been right (sic).

I want to thank all those who have been reading me and wish them all the luck possible in this fast moving world!

I am thanking my son Roy who has been of invaluable help to me in all occasions.

So, for all the football (soccer) fans, and you are many, I will be waiting for you. It will be a different type of football blog: It will allow all our football fan friends in many countries and future readers to send us stories about Football which at some point of their life were so poignant that their remembrance lasted until now. Everyone will get credit for their story. 

This blog addresses the lovers of football world wide; it will not try to compete with “news” provided by the immensely popular football sport dailies and magazines in various countries. This does not mean that football fans who want to express opinions about “news” they read about cannot send them to this blog, who will evaluate if comments are in line with the philosophy of this blog which is not “politically“minded.

This blog has not an index of subjects because it will feed itself with personal stories and opinions which will include subjects about specific games seen, outstanding players’ performances (be it goals, goalie saves, defense interventions, etc…), anecdotes on referees’ “behavior”, etc… The main objective of this blog is to provide fun for contributors and readers.

After reaching 2000 published posts since the creation of my “macrovolatility.com” (which has largely deserved its name in the meantime…) blog on April, 2011, I will refer to my last – 10/12/2015 – comprehensive post: “Eurozone’s Governance Approach is Too Faulty / Obsolete to be Remediated”.

This blog will continue to be open.

I have consistently – constructively I hope – tried to make concrete proposals for drastic changes in “Governance”, I have always zeroed in on the way the Eurozone was (not) construed as a “social-economic” area, not to talk about a “politically” integrated one, and not even having succeeded to be a “financially” integrated one.

Main reasons, those reflected in the self-explanatory  titles of the two books I have published – in self-edition – in the meantime: “Why Obsolete Macro Governance is Killing the World Economy” (September 2014 – Amazon) and “Growth through Structural Reforms” (April 2015 – Amazon).

I have continuously published in my blog opinions of varied economists, analysts, and people who found space to express themselves, et al, which seemed of interest to me, independent on whether I agreed or not with them. 

I had been preparing since the beginning of 2015 a third book to be published through the regular classic publishers’ channels (not self-edition with Amazon anymore), to be entitled: Structural Reforms Impeded by Central Banking”, I had written 104 pages before stopping…

I have given up publishing it because well known academia publishers refused publishing considering it a sort of iconoclastic (sic) book – follows one of the comments I received (textual – italics): “Having reviewed the material you have sent me, and further considered the nature of the overall project, it is with regret that we do not feel we are the right fit for your book at this time. As I mentioned when we spoke by telephone, XXXXXXX is primarily an academic publisher whilst your book is clearly aimed at a wider audience. With sales channels and market positioning in mind it is my view that we would not be able to reach the primary audience you have in mind.”

This book was intended to break away from classic economic analysis because I believe that the world’s meteoric change in the last half century, and even more so in the last 30/40 years, has changed world economics fundamentally, with past milestones and concepts like “business cycles” becoming gradually obsolete.

It is not an iconoclastic book because I think that most icons do not really exist anymore.

This book was not about negativism, since all situations have built in solutions which need to be first recognized and then with great a priori and in-depth analysis adapted to the new circumstances.

This, in general, has not been the case and is at the origin of a very unsatisfactory world governance situation, where many political and social-economic factors need to be drastically reviewed first and revised accordingly.

The big 2008 and still continuing social-economic situation, not anymore a “crisis” but a social-economic moving situation, cannot be compared with 1929, 70s oil crises et al, because it relates to a different geo political world and to very different social-economic developments.

What happened in 2008 with the housing crisis was only a detonator, not an isolated event, since it had been developing without gaining awareness since many decades and finally broke into a “recognized” crisis.

This third book would have concentrated on developing thoughts and concrete proposals for gradual implementation of changes in governance and necessary structural, not conjunctural, reforms.

It would have tried to demonstrate that the independence and predominance of Central Banking has been pernicious by flooding markets with huge liquidity which has fostered even higher indebtedness and helped weak governments to postpone necessary and urgent structural reforms.

It would have concentrated on most of the Western World, particularly on Europe and US, which still represent about half of world trade and are therefore representative.

The world has been and is changing at a meteoric pace and Governance has not adapted to this continuously new geo political and social-economic environment. More pragmatic views of some crucial and specific macro situations are necessary, since they are, in general, ignored.

It has been very difficult to find new social economic foundations to start developing new governance guidelines, but the current situation is one of reactivity and not basic change, and if this continues the world’s social economic performance will suffer continuously.

The two main subject matters in my book – leitmotivs – were crucial, not having been the object, generally speaking, of the concern they merit, because they have been, are and will continue to hinder world governance evolution if no real changes are adopted.

Governance – In order to be able to implement real and complete structural reforms, a drastic change in approach to Governance is essential, since without it, matters will not change, as has been the case now for various decades.

The two leitmotivs in my book were:

  • Social-economic structural reforms are indispensable to ensure that social-economic situations improve significantly in order to allow Western Governance to obtain largely improved employment situations and hence durable growth.

The successful implementation of these structural reforms will depend on the political will of country governments, and in the case of the Eurozone – a multi country area – a drastic change in governance style and approach on seizing opportunities and solving problems is required.

  • Central Banking has been, is and will continue being, if not drastically changed, the major impediment to Social-Economic positive evolution, since acting solely through monetary policies has proven to be a great “fiasco” worldwide.

Monetary policies need to complement economic ones and not precede them.

Proposed alternative solutions are based on the experience acquired in active international corporate and also entrepreneurial life, working “in situ” in 3 continents and 7 different countries, and speaking five languages, always trying to update myself in macro economics. Please refer to my headings in my blog: “About” and “Home Page”.

This being my last post in this specific blog, which I am keeping open for maybe future use (?), I will dedicate it to reflect upon on the “content” of the 8 pm News yesterday – 10/14/2015 – in one of the major information channels in France, doing it here because I live here, France not being “unique” anymore.

  • One title was that French trade with China had increased by 4001% since 2006… An “expert” was called who explained that in 2006 France’s exports to China were a non existent 20 million euros (less than 1% of total French exports) and that accordingly increasing by…4001% had to be viewed relatively to total amounts, which is zylch. This is how matters get misconstrued, since the “number – plus 4001%” is the one that gets remembered showing France in extra good limelight. Took 5 minutes.
  • Another one was that Finland was trying to change its whole social-economic scene by allowing a universal subsidy equal in value to all Finns to be implemented and replacing all different revenues and taxes. The “expert” was called , who said that this new “scheme” had very little chances to be adopted , even in a Nordic country whose sociological culture is totally different from, say, Latin ones. 5 minutes were lost on this…
  • A “permanent” subject came up with the need to reduce French public spending, with the usual demos by respected bodies (like the “Cour des Comptes”) that nothing had been achieved since many years – that taxes continued to increase – 67 taxes were to be abandoned, 3 were on principle, only one was effectively removed, and in 2016 – 3 more are to be levied…Took / lost some 10 minutes.
  • Minister of Interior – Police members – demonstrated before the Justice Palace (Place Vendome) requesting increases in police personnel in view of the increase in violence (x “number/ratio demos” were made). As a very small personal comment I often see in my street 3 (three) women making parking tickets, where one suffices – I question the “Use of personnel analysis” made (if so?). This took some 5 minutes.
  • Air France (AF), one week after syndicalists aggressed two members of AF top Management after a “Comité d’Entreprise”, which caused general reprobation (one of the attacked had his shirt ripped open), because AF has decided to licence 2900 employees to allow the company to retrieve profitability. AF Pilots earn much higher remuneration than German peers while working much less, which is a non sustainable business model. But, has AF’s management really exhausted its analysis on how its personnel is working and which are the productive and necessary jobs and which are not? Probably not in-depth. But the French Government in one of its typical 180% gyrations now recommends to stop the licencing of 2900 posts and to engage AF management and syndicates in increased social dialogue (no reprimands anymore of the before denounced violence seemingly). This took 10 minutes
  • At the end of the “News”, a 9 year old “genius” in math was interviewed, he had succeeded the baccaleauréat exam also (…), nice “nerd”, maybe he can work with Hollande to bring into perspective the 4001% increase in French trade with China? Took some 5 minutes.

I wonder (?) what all this “News” audience will retain from the above, not much and certainly nothing positive.  Social medias will increasingly continue having a “field day”!