La prima volta dal 1948

 

  By: Joseph on Mercoledì 14 Agosto 2002 14:28

Scrive G,Zibordi "PIMCO (che è il maggiore fondo del mondo al momento e da 10 anni il numero uno per il reddito fisso) chiede di inflazionare l'economia, di stampare moneta e girarla alle banche per far sì che prestino..." Interessante analisi e proposta che ricalca ciò che diversi anni fa l'economista P.Krugman propose ai vertici nipponici (rimanendo inascoltato) In effetti contro un rischio conclamato di deflazione, questa potrebbe essere un'alternativa fattibile. Rimane il fatto, come lo stesso Krugman da molti anni afferma, che la vera distorsione economica è stata nell'assurda ossessione dell'incremento dell'offerta, senza preoccuparsi in egual misura del parallelo della domanda e ciò porta e porterà a crolli finanziari ciclici e ripetuti, che possono minare seriamente il già precario equilibri macroeconomico e finanziario mondiale. Bisogna riconoscere che tali distorsioni preannunciate diversi anni fa da Krugman si stiano rivelando corrette, ma rivedere l'atteggiamento sulla domanda e l'offerta implicherebbe anche scelte etico/politiche assai diverse, cosa al momento non individuabile. Cordiali saluti Joseph

 

  By: banshee on Mercoledì 14 Agosto 2002 14:23

Beh, sarò anche monotono, ma la mia obiezione alle richieste di Pimco è sempre la stessa. In Giappone sono anni che fanno quello che vorrebbe Pimco, ma al drag deflazionario gli hanno fatto solo il solletico.

 

  By: usemlab on Mercoledì 14 Agosto 2002 14:22

Se la situazione e' grave, e' grave perche' l'hanno resa grave con gli errori del passato. E' inutile scrivere la "Bolla" con la B maiuscola e tra virgolette... come fosse un animale tipo Mostro di Lochness. O la scriviamo la bolla oppure la BOLLA, e fine della storia. Se c'e una cosa che mi manda letteralmente il sangue alla testa e' sentire questa gente che guadagna e ha guadagnato STRAMILIARDI in tempi di bolla (o BOLLA) e adesso piange (per modo di dire!) riempiendosi la bocca con argomenti POPULISTI (ad alto contenuto demagogico soprattutto) chiedendo il bail out dell'economia. Eh no, tutta sta bella gente dovrebbe solo essere riempita di una gran scarica di legnate, dopo che ovviamente gli e' stato confiscato ogni bene a disposizione (mutande comprese!). Crollo da Deflazione, e allora? se la situazione non ha via d'uscita (e non venitemi a raccontare che la via d'uscita e' arricchire ancora questi maghi della finanza inondandoli di liquidita') via! fine! come dice anche Fleckenstein di Realmoney, non resta che inghiottira l'amara medicina, aspettare che le cose vadano a posto da sole, e poi ripartire da zero. Tirandosi su le maniche, sereni e soprattutto con la MEMORIA fresca fresca del recente passato, che in futuro si spera, qualcuno riuscira' a rinfrescare meglio (di come e' avvenuto negli anni 90) durante la prossima fase speculativa. Siamo veramente alla fiera degli orrori, o se vogliamo prenderla a ridere, delle BURLE! Quando saliva, tutti.. ale'... piglia la vecchina e fatti dare i 50 milioni da mettere su TIscali, vai che il capitalismo e' una cosa grande e fa ricchi tutti, e domani tutti in mercedes SLK, adesso la natura "snaturata" di quel capitalismo da piazzisti di merce scadente si sta rigirando contro gli autori della BOLLA ed ecco che STRANAMENTE si fa appello a salvataggi da economia socialista. Ma per favore. Che la FED si limiti alla funzione di lender of last resort, inteso come prestatore di ultima istanza, quello che se la banca rischia di non darmi i soldi del conto corrente, presta liquidita' alle banche per risolvere la situazione di crisi. E non farmi rimanere con un pugno di mosche in mano con i miei risparmi che se ne vanno alla malora, perche' allora li' veramente tiro su le spranghe e me li vado a riprendere in qualche maniera, magari isnieme a 100 mila persone piu' inca@@ate di me ! F. adesso mi calmo e leggo l'articolo in inglese che seguiva

"debt-deflation meltdown" - gz  

  By: GZ on Mercoledì 14 Agosto 2002 13:56

Goldman Sachs, Morgan Stanley e PIMCO hanno chiesto con forza che la FED pompasse liquidità e riducesse i tassi. La maggioranza a parole dice che non serve a niente o comunque sono già bassi, ma poi all'atto prativo vedendo che la FED non ha tagliato il mercato ha ceduto. L'argomento "populista" di chi dice di pompare ancora liquidità (e non solo ridurre i tassi) sembra errato perchè ora quasi tutti dicono che è colpa della liquidità eccessiva del 1998-200 (per via dell'asia, poi della russsia e LTCM e il baco dell'anno 2000) se c'è stata la "Bolla". E la "Bolla" e il suo scoppio stanno mandando in crisi anche l'economia. Tuttavvia non ne sono così sicuro perchè se la situazione è molto grave, come dice qua McCulley di Pimco di "Debt-Deflation Meltdown" cioè Crollo da Deflazione del Debito allora tutti i mezzi sono buoni. E una discussione teorica, ma fino a un certo punto : hai avuto le più grandi bancarotte del dopoguerra e poi anche adesso hai Ericsson, Vivendi, Lucent, Nortel, Dynegy, AOL e molte altre strangolate dai debiti PIMCO (che è il maggiore fondo del mondo al momento e da 10 anni il numero uno per il reddito fisso) chiede di inflazionare l'economia, di stampare moneta e girarla alle banche per far sì che prestino : : "... Further cuts in the Fed funds rate would be easy, but not wise. In contrast, opening up the banking system conduit for the Fed's lender-of-last-resort function will not be easy, but wise...." --------------------------------------------------Fed Focus Paul McCulley / August 2002 Time to Roto Rooter the Lender-of-Last-Resort Function "Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally." - John Maynard Keynes, The General Theory Over the last week, I've been asked approximately 289 times whether the Fed is going to cut rates at Tuesday's FOMC meeting. My answer, approximately the same number of times, has been "I don't know, but I think not." And in response to that response, I have been called a wimp approximately 114 times, a two-armed economist approximately 75 times, a jackass twice, and things unprintable approximately 98 times. People just don't seem to like equivocation in the matter of handicapping Fed rate cuts: will they or won't they, that is the question. And the answer, questioners implicitly or explicitly declare, should be a simple yea or nay. Not complaining really, as I've been doing this for twenty years, and know the drill. And, I have to admit, it is flattering to have others think I might actually know something that I don't know. It is frustrating, however, to be repeatedly asked the wrong question. The right question, about which I do know something is: are Fed funds cuts, by themselves, sufficient to break the ongoing debt-deflation meltdown in the corporate sector? My unambiguous answer: No. Some Definitions First Before "building out" my argument, as PIMCO's Account Managers are fond of saying, let me first define the dynamics of a "debt-deflation meltdown." It is not about a fall in the CPI or the PPI, even though those popular price indexes might fall. A debt-deflation meltdown is about a self-feeding fall in the market value of assets relative to the par value of debt assumed to acquire them, which provokes lenders to withdraw wholesale the presumption that debtors are going concerns, demanding that their maturing debts be paid, rather than "rolled-over." To wit, debt deflation is about lenders demanding that borrowers liquidate themselves. In a falling market for assets, however, that's damned difficult for individual borrowers, and impossible for the community of borrowers. But the very fact that it is impossible for the community to liquidate all its debts by selling all its assets (you gotta have somebody to sell to!) reinforces the incentive for individual lenders to demand that individual borrowers liquidate themselves as quickly as possible, so as to monetize their assets before prices deflate even more. This individually rational, but collectively irrational behavior is, of course, the stuff of bank runs - nasty self-feeding things, as George Bailey found out. In the language of finance, the "run" dynamic is called systemic risk, and leads us, as a civilized capitalistic society, to have structural prophylactic arrangements: deposit insurance for bank deposits, and a Fed discount window for banks to "re-discount" (not sell!) their loan and security portfolios for hard cold cash. Indeed, the banking system itself is a prophylactic against debt deflation in the capital markets, a place where solid companies unable to "roll over" their maturing commercial paper and debentures turn for loans to "take out" maturing paper. In fact, contingent commitments by the banking system to lend to companies are an integral part of most companies' ability to actually place debt paper in the capital (non-bank) markets. Capital market buyers of company debt demand that issuers have a bank "back-up line" for rolling over maturing debt, as an insurance policy against forced liquidation in the event that the capital markets are caught in a bout of infectious risk aversion. Most elementally, the capital markets and the bank lending market are complements, not substitutes. They need each other: banks need capital markets to determine, in real time, non-bank intermediaries' appetite for risk, and at what price, and capital markets need banks to act as a conduit for the Fed's lender-of-last-resort function. And when the capital markets are caught in a paroxysm of remorse after an inflationary bubble in asset prices, the "circuit breaker" to prevent a debt-deflation meltdown must be a banking system willing to serve as a contingent lender of last resort. And if the banking system cannot, or will not, play that role, as was the case in the Great Depression, then a debt-deflation meltdown will beget a more generalized deflation in goods and services prices - to wit, the PPI and the CPI - as economic activity grinds to a halt. Thus, when thinking about deflationary risk, as all right-thinking risk takers should be doing at the moment, it is hugely important to think in terms of unaborted deflation in asset prices. By undermining asset-based leverage structures, such deflation is the proximate cause of the rising risk of goods and service price deflation. Accordingly, policy authorities cannot wait for deflation in goods and services prices to become proactive in fighting deflation. The time to act is when asset price deflation is calling into systemic question the "money goodness" of private sector debt arrangements. The Austrians Are Wrong It is not in the nature of bankers to want to act counter-cyclically, of course, as bankers put on their trousers just like risk takers in the capital markets, acting in pro-cyclical fashion, as is the wont of the human nature. Nothing is so exhilarating to the appetite for risk as making money, and nothing is so debilitating to the appetite for risk as losing money. Human nature is as human nature does, as Alan Greenspan regularly incants, most recently in his observation about greed: what the late 1990s was about, he philosophized, was not an increase in the human greed drive, but the efficiency of avenues for exercising that drive (in a different context, Bill Clinton ran with the same argument!). Indeed, capitalism is a marvelous economic system founded on the basic human urge to get rich: Adam Smith's invisible hand in action, carrying out Joseph Schumpeter's process of creative destruction! Nothing wrong with that, but something very right: technology-driven innovation and increases in standards of living. Capitalism's problem, and it most certainly has one, is that it is inherently given to boom-bust pathologies, because it is founded on the same human urge that begets gambling. Except, in the case of capitalism, "we the people" do collectively win, whereas in the case of casino gambling, only the casino owners win on net. Capitalism is way cool, fer sure fer sure. But like, not totally. The dominant political question of civilized society is whether to try to temper capitalism's boom-bust pathologies. For me, to answer the question: yes, civilized societies, particularly those founded on democracy, not only have the right, but the duty to harness capitalism, even while celebrating it.1 Members of the Austrian school of economics vehemently disagree, arguing that capitalism's boom-bust pathologies, even if they exist, are magnified, not tempered, by the visible hand of government. In particular, Austrians hold central banking in high contempt, arguing that fiat credit creation (printing-press money!) is the dominant source of capitalism's boom-bust proclivities. And contrary to the presumption of the legions of Austrians who write me every month (to accuse me of macroeconomic immorality!), I actually have some sympathy with the notion that central bank policy can be a source of boom-bust pathology itself. But I call that bad central bank policy, not an indictment of the legitimacy of central banking. Good central bank policy involves tempering the pro-cyclicality of capitalists' human urges by acting counter-cyclicality: watering down the punch before the partiers start swinging from the chandeliers, and offering Alka Seltzer before the hung-over partiers start gagging themselves with spoons. Thus, I agree with current-day Austrians that the origin of the current risk of a debt-deflation meltdown was not just irrationally exuberant capitalists, but the enabling hand of the New Age Economy's chief bartender, Alan Greenspan. He could have tempered irrational exuberance, and should have tempered irrational exuberance. And he didn't. Where I disagree with modern-day Austrians is in their righteous advocacy that the time has finally come for Greenspan to repent his sins and make drunken capitalists drink ipecac, rather than serving them yet more monetary policy accommodation. The Austrians are bedfellows with Treasury Secretary Mellon, who said to President Hoover in 1931 that the time had come to: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness of the system. High costs of living and high living will come down. People will work harder, live a more normal life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people." Mellon's advice, and modern-day Austrians' amen chorusing is a perfect prescription for a debt-deflation meltdown. And, my friends, two wrongs do not make a right. Yes, it may have been wrong for Greenspan to have enabled the bubble, but it would be even more wrong for him to embrace debt-deflation in repentance. Greenspan Ain't No Austrian (Or Libertarian) On The Downside Greenspan has no intention of listening to the whining and pining of Austrians for a purge. He is self-admittedly a macroeconomic hermaphrodite when it comes to bubbles: hands off when they are inflating, and hands on when they are deflating. As noted, I don't share this philosophy with Greenspan, and said so unambiguously and forcefully while the bubble was bubbling, in the very first edition of Fed Focus in September 1999,2 and in testimony before Congress in March 2000.3 I didn't, however, pound the table for Greenspan to hike the Fed funds rate to abort the equity market bubble (and its associated bubbles in business investment and corporate leverage), as many critics of Greenspan did at the time, and continue to argue today. Rather, I advocated that the Fed hike margin requirements for the (initial) purchase of stocks on debt. And my rationale was simple: the equity bubble was a New Economy affair, in which stocks were valued as lottery tickets, while Old Economy stocks - and the Old Economy itself - were not bubbling, but actually languishing in the deflationary wake of the 1997-98 collapse in emerging market countries. Thus, I believed then, and believe now, that hikes in the Fed funds rate were the wrong tool to arrest irrational exuberance in New Economy stocks, carrying unnecessary "collateral damage" for the Old Economy. Or, as I testified before Congress: "I know of no economic model that postulates a high interest elasticity of demand for lotteries! Virtually every economic model incorporates, however, a high interest elasticity of demand for the goods and services of the Old Economy." Thus, using the interest rate tool exclusively to thwart wealth creation in New Economy stocks carries grave risks for the Old Economy. It makes no sense to try to get the attention of gluttons by starving anorexics. It's bad macroeconomic policy, and it is also morally wrong." Mr. Greenspan didn't agree, of course, and pedantically (as in, "won't you please shut up") rejected calls for a hike in margin requirements. But at least I can take some solace that I was in good company in making the call: Yale Professor Robert Shiller testified along side me, literally days before his Irrational Exuberance hit the book stores; he kindly gave me an "author's copy" from his briefcase. Bob has gone on to great fame, of course, and rightly so: it was a great book, not because he called the equity market top (he didn't; he'd been bearish since 1996!), but because he articulated, and documented, a "behavioral" approach to understanding bubbles. John Maynard Keynes' "animal sprits" matter, and matter hugely. On the upside then, of course, and on the downside now. Fed Rate Cuts Work When/Where Uncle Sam Works Which brings us back to the matter of whether the Fed should or will cut the Fed funds rate again at Tuesday's FOMC meeting. True to his word during the bubble, Mr. Greenspan became very hands-on once it blew up (after maintaining he had nothing to do with blowing it up, of course!): he slashed the Fed funds rate from 6 1/2% to the current 1 3/4% within a year. Bravo for him, and the U.S. economy. Easy monetary policy is indeed "working" where it is manifestly supposed to work: the residential real estate market, a (the last remaining?) pillar of the Old Economy. Property prices are rising, and credit is both abundant and cheap for buying property. Animal spirits are indeed alive and well in that sector, and Mr. Greenspan rightfully takes both credit for and pride in the outcome. Too much, I think, though that is not really meant as a criticism. Housing finance in America is actually a quasi-governmental function, not a "pure" capitalist function. Fed easing works very well to promote housing, because housing leverage in America is funded by financial intermediaries that fund themselves on the good name of Uncle Sam -- otherwise known as "we the people." I'm talking about Aunt Fannie Mae and Uncle Freddie Mac, of course, who've done a marvelous job of implementing their federally-chartered mandate to provide a steady supply of funding to the housing sector: the agencies get the privilege of "implicit" backing from Uncle Sam, which affords them access to capital market credit at tight spreads to LIBOR (negative out to five years!), with the quid pro quo responsibility of channeling those funds into property loans. They take their responsibility very seriously and execute it faithfully, and well. It's a sweet deal for them, a sweet deal for American households, and a sweet deal for capital market investors. It's a too-big-to-fail arrangement, which "we the people" demand from our government. We also pay for the arrangement, of course, in that "we the people" are on the hook as taxpayers, if the agencies ever get into trouble, just like we are on the hook for deposit insurance. It's a deal with ourselves, the outcome of the democratic process. Yes, it is fraught with moral hazard, but then, government-supported financial intermediation is always fraught with moral hazard: the free rider problem, in which the upside of risk-taking accrues to the individual, but (most) of the downside accrues to the community of individuals. The existence of moral hazard is not, however, a sufficient case for rejecting implicit or explicit government backing for financial enterprise. "We the people" retain the right to enter into risk-sharing arrangements, despite the rantings of "pure" capitalists about the evils of moral hazard. We have done so with both deposit insurance and housing finance in this country, and I submit that an overwhelming majority of Americans ("we the people" again!) applaud the results. Bottom Line Further cuts in the Fed funds rate would/will certainly stimulate housing, as housing financing runs through a too-big-to-fail conduit. Further cuts in the Fed funds rate would not/will not, however, materially abort the risk of a debt-deflation meltdown in a corporate sector suffering from Post Bubble Disorder.4 Cutting that risk would/will require that the Fed roto rooter the conduit through which its lender-of-last- resort function is supposed to flow: bank liquidity lending, and most importantly, banks' commitment to liquidity lending. But how can the Fed get banks to re-engage in underwriting corporate default risk when they don't want to, you ask? The answer, it seems to me, is quite straightforward: just tell them to do it! But will they listen, you ask? Yes, they would, I submit, particularly if Mr. Greenspan were to declare that he is also instructing his bank examiners to act counter-cyclically, not pro-cyclically, in evaluating capital and credit-reserve policies. As an additional incentive for banks to unclog their lending pipes, Mr. Greenspan should publicly call for Congressional investigators to call off their find-a-crook dogs. The time for bank regulators to get tough is when times are good, not when times are bad. They didn't, of course, during the bubble years, but that is not a rational justification for getting tough now. If counter-cyclical is good for Fed funds policy, then counter-cyclical is good for bank regulatory policy, too. Interestingly, famed economist Henry Kaufman applied this logic just this week5 in calling for a cut in margin requirements for stocks, after having been a fellow traveler with me and Bob Shiller in advocating a hike in margin requirements during the bubble years. Henry surprised me on this score, even though his logic was perfectly reasonable: regulatory policy should be counter- cyclical and since margin requirements are a regulatory tool, a cut certainly wouldn't hurt to break infectious risk aversion (though unlike the case of a hike, it would be less likely to "work," for proverbial "you can lead a horse to water, but…" reasons). What Henry should have advocated, if I may be so presumptuous, is a counter-cyclical easing in the implementation of bank regulatory policies. Renewed bank appetite for corporate liquidity lending, outright and on a contingent basis, is the necessary condition for truncating debt-deflation risk, not cuts in the Fed funds rate. Not that I'm necessarily against further cuts in the Fed funds rate. (I've often been accused of never meeting a Fed funds cut that I didn't like, and there is some truth to that.) My point is that if all the Fed does is cut the Fed funds rate, the risk of a debt-deflation melt down will remain the dominant risk in the macroeconomic outlook. Restarting the rate-cutting engine, alone, would be the start of a journey to zero Fed funds - not in real terms, but nominal terms. Hello, Sir Greenspan-san! Indeed, since Fed funds cuts "work" through the government-supported housing finance sector, the dominant risk of a Fed funds-only policy of "accommodation" is an unrelenting deflationary bust in the corporate assets and an accelerating inflationary boom in residential property prices. The Austrians are right that fighting busted bubbles with new bubbles is a lousy way to run a railroad. They are wrong, however, in arguing that busted bubbles should be allowed to bust in Mellonesque fashion. The right approach is to directly contain the deflationary fallout of the busted bubble, without inflating one somewhere else. And the conventional Fed tool of changes in the Fed funds rate ain't the right tool, even when applied counter-cyclically. It's time for the Fed to act unconventionally, and break the conventional pro-cyclical pattern of bank lending and bank regulatory policy. Further cuts in the Fed funds rate would be easy, but not wise. In contrast, opening up the banking system conduit for the Fed's lender-of-last-resort function will not be easy, but wise. Yes, I remain a Principled Populist, who believes in the power of "we the people" to protect ourselves from our capitalist selves. Modificato da - gz on 8/14/2002 12:8:44

 

  By: GZ on Mercoledì 07 Agosto 2002 12:52

nel 90% dei casi la FED quando inizia a alzare i tassi lo fa di continuo per 6 o 12 mesi con un minimo di 4 e un massimo di 7 o 8 rialzi consecutivi Viceversa quando inizia a abbassare i tassi Non è mai successo che tagliasse i tassi per 11 mesi di fila come l'anno scorso ha fatto da gennaio a novembre e poi dopo altri 8 mesi ricominciasse, come sarebbe se ora li taglia di nuovo Quando si dice che gli investitori sono spaventati dalla "doppia recessione" si intende proprio che accade qualcosa di anomalo

 

  By: polipolio on Mercoledì 07 Agosto 2002 11:51

GZ, in effetti dall'ULTIMO taglio il mercato è sempre risalito. Ma chi l'ha detto che abbiamo già visto l'ultimo prima del rialzo? Personalmente ho il sospetto, confortato da qualche indizio, che l'economia sia pronta a "ripartire" dopo che si toglierà tutti, collettivamente, il piede dal freno. I dati USA più recenti, tuttavia, non sono confortanti. Siccome sono un imbecille ottimista li vedo un po' come una crisi di partenza (causa sostanziale: se parti scattando è probabile che hai qualche esitazione; causa tecnica le rilevazioni di numeri con forte variabilità sono meno affidabili) Intanto, però si vocifera di un nuovo taglio di zio Al. E se ci sarà un nuovo taglio le tue induzioni sulla statistica storica sono, quantomeno, anticipate.

 

  By: usemlab on Venerdì 02 Agosto 2002 04:52

e a me in televisione quando mi ci chiamano?? mi sento pronto... ma voglio un antagonista Francesco

La prima volta dal 1948 - gz  

  By: GZ on Venerdì 02 Agosto 2002 02:48

Oggi e ieri sono usciti dati economici molto deboli che hanno indotto le TV a mandare in onda Steve Roach di Morgan Stanley che aveva previsto a inizio anno che la recessione stata arrivando ORA e non che era già passata l'anno scorso. Ha ripetuto che gli ultimi dati mettono l'economia sull'orlo della recessione. In un ottica non di qualche giorno o settimana ma di sei mesi o un anno la cosa che preoccupa e fa pensare che possa avere ragione è che sono 50 anni che non si vedeva un comportamento simile delle borse. Questa è la tabella completa che mostra che dal seconda guerra mondiale le 14 volte che la FED ha tagliato i tassi il listino è sempre salito (in media del 18%). Con una sola eccezione su 14 volte, tra l'ultimo taglio dei tassi e il primo rialzo dei medesimi (insomma alla fine di un ciclo di ribasso dei tassi) il listino è salito e in media il guadagno è stato di un +18%. Nel NOVEMBRE 2001 la FED ha terminato un ciclo di 8 tagli consecutivi dei tassi. Quindi da quella data si dovrebbe aspettarsi un rialzo. Sono passati 8 mesi e siamo a -25% sull'S&P 500. Siamo cioè sotto di un -38% rispetto al risultato medio che in 14 altre circostanze simili si è verificato dal 1948. Non è ancora finita però, perchè la misurazione che mostro conta la % di variazione del listino fino al momento del prossimo RIALZO dei tassi. E questo momento è ancora lontano. Ma al momento siamo usciti completamente dalla media degli ultimi 50 anni Edited by - gz on 8/2/2002 0:53:58