segunda-feira, 18 de novembro de 2013

Dinheiro público vai para bancos privados que investem em títulos públicos, e o povo?

Bundesbank diz que bancos da Europa investem em títulos públicos e não no mercado e com isso a crise bancária e econômica na Europa se torna endêmica. É a velha história, dinheiro público vai para bancos que investem em títulos públicos, enquanto o povo fica desempregado.

Ambrose Evans-Pritchard escreveu sobre isso hoje, em um texto muito bom, mas um pouco contraditório, ao pedir mais dinheiro público nos bancos.

Bundesbank says Italian and Spanish banks still hooked on home state debt

The Bundesbank always like to spoil the party. Tucked away on page 33 if its November monthly report is a reminder that the banking systems and sovereign states of southern Europe remain stuck in a vicious circle:

Italian banks have increased their holdings of Italian public debt from €240bn to €415bn since November 2011 (+ 73pc).

Spanish banks have raised their holdings of Spanish debt €166bn to €299. (+81pc). Ditto Irish banks, up 60pc; and Portuguese banks, up 51pc.

The EU summit pledge made in June 2012 to end this dangerous and incestuous linkage has come to little. As the Buba report said testily, "the mutual dependency of the banks and the state sector has grown most in those countries where the links were already particularly high at the start."

It is not a crisis as such. It is a chronic malaise. There is still an acute credit crunch for small business in Italy and Spain. The banks are hunkering down and living off their coupons from the state, even as the rest of the economy screams for credit. Their appetite for sovereign debt – boosted first by the ECB's €1 trillion long-term loans (LTRO), then by Mario Draghi's debt backstop (OMT) — is touted as a sign of recovery, but it is equally a sign of deformed EU policy.

Note too that these banks are buying the bonds of sovereign states where the debt trajectory is rocketing upwards, an effect made worse by Euroland's slide towards deflation. Italy's public debt has jumped from 119pc to 133pc of GDP since 2010, and average maturity has been sliding for two years as the treasury relies more heavily on short-term debt backed by the ECB. Spain's debt has risen from 62pc to 94pc. The longer the banks keep betting on this state debt, the greater the risk.

We heard this morning from the Bank of Spain that bad debts in the Spanish banking system have reached 12.68pc, the highest since records began half century ago. Loans under water have reached €188bn.

Daragh Quinn and Jaime Hernandez at Nomura warn that a number of Iberian banks look vulnerable under the Texas Ratio. This is the rule of thumb used in America's S&L crisis in the 1989 when 130 banks failed in Texas. The ratio is calculated by taking bad loans and property assets divided by tangible equity and total provisions. A ratio above 100pc typically leads to failure.

Nomura says the ratio for Banco Popular is 123pc (up from 109pc last year). Nationalised Bankia is off the charts of at 372pc. Sabadell is near 100pc.

As for Italy, the Banca d'Italia's Financial Stability Report this month says the banks are facing a "rapid increase in non-performing loans, principally to businesses, as a result of the protracted recession." Banca d'Italia warned that tensions could "resurface next year" as the ECB's three-year loans draw to a close.

Nothing has really been resolved. There will be a crunch in 2014 when the ECB carries out its next stress tests, with no proper EMU-wide backstop yet in place, or likely to be in place. Eurozone ministers agreed last week to "burden-sharing" rules that put investors in the front line for the first hit if there is a shortfall in bank capital.

Fair enough, but ex-ECB board member Lorenzo Bini-Smaghi says this risks repeating the sort of error made by Angela Merkel and Nicholas Sarkozy at the walk on the beach in Deauville, when they famously changed their minds and decided to impose a haircuts on holders of Greek debt (against vehement ECB advice) – without first putting in place any safety net to deal with the panic that was sure to follow.

The national governments will have to swallow the next layer of losses, if necessary with a loan from the ESM bail-out fund, even if they are dire trouble themselves and cannot safely take on more debt.
We don't know yet whether this burden-sharing (or bail-in) will be limited to junior debt, or senior debt as well as the Germans want. Nor do we know exactly what will happen to depositors (Cyprus again?), when push comes to shove. This is surely a recipe for trouble.

A monetary reflation blitz along the lines of Abenomics in Japan would make it a great deal easier to cope with this bad debt legacy. All the ECB has to do is to is target nominal GDP growth of 5pc a year (easily within its power) — or 5pc M3 growth, to mimic the effect – and a big part of the problem would disappear.

As I have written many times, the health of banking system and debt structure in both Italy and Spain is a simple mathematical function of the denominator effect. The higher the nominal GDP path, the easier it is to outgrow the debt burden. A real central bank can achieve this with a flick of the fingers. If it wants.

Italy and Spain are formidable countries. They are entirely savable within EMU under expansionary policies, yet all too easily lost under contractionary policies.

If I were an Italian or a Spaniard, I would have a few caustic words to say about the Bundesbank's report today. Had Frankfurt not pushed for two premature and destructive rate rises in 2011, and had it not opposed any pre-emptive stimulus over recent months to avert incipient deflation, and had it not let eurozone M3 money growth go negative over the last five months, the banks in Italy and Spain would now be in far better shape.

terça-feira, 12 de novembro de 2013

"Perdão pelo Quantitative Easing"

Bom, posso me orgulhar de já ter dito há muito tempo que os QEs não iam dar certo: é dinheiro barato para quem já tem, e não alavanca a economia. Em suma, bolha financeira. 

Foi o Rerum Novarum quem me ensinou isso.

Andrew Huszar: Confessions of a Quantitative Easer

Andrew Huszar
Nov. 11, 2013 7:00 p.m. ET

I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs. 

The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."

My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed's trading floor? The job: managing what was at the heart of QE's bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.

This was a dream job, but I hesitated. And it wasn't just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank's credibility, and I had come to believe that the Fed's independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp. I could also see that they desperately needed reinforcements. I took a leap of faith.

In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.

It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash. 

From the trenches, several other Fed managers also began voicing the concern that QE wasn't working as planned. Our warnings fell on deaf ears. In the past, Fed leaders—even if they ultimately erred—would have worried obsessively about the costs versus the benefits of any major initiative. Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street's leading bankers and hedge-fund managers. Sorry, U.S. taxpayer.

Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank's bond purchases had been an absolute coup for Wall Street. The banks hadn't just benefited from the lower cost of making loans. They'd also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed's QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.

You'd think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany's finance minister, Wolfgang Schäuble, immediately called the decision "clueless."

That was when I realized the Fed had lost any remaining ability to think independently from Wall Street. Demoralized, I returned to the private sector.

Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.

And the impact? Even by the Fed's sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn't really working.

Unless you're Wall Street. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.

As for the rest of America, good luck. Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long? Experts like Larry Fink at the BlackRock investment firm are suggesting that conditions are again "bubble-like." Meanwhile, the country remains overly dependent on Wall Street to drive economic growth.

Even when acknowledging QE's shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces). The implication is that the Fed is dutifully compensating for the rest of Washington's dysfunction. But the Fed is at the center of that dysfunction. Case in point: It has allowed QE to become Wall Street's new "too big to fail" policy.

Mr. Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director. In 2009-10, he managed the Federal Reserve's $1.25 trillion agency mortgage-backed security purchase program.

terça-feira, 5 de novembro de 2013

A Ética do Trabalho sendo Destruída pelo Governo - Livro "Recessão da Redistribuição"

O professor de economia da Universidade de Chicago, Casey Mulligan, discute no livro acima o impacto de ajuda de governo aos pobres na ética do trabalho, no incentivo para se trabalhar. A gente ouve muito falar disso quando se discute o bolsa família no Brasil.

É um assunto que me interessa bastante.

Recentemente, prof. Mulligan escreveu sobre o assunto no jornal Wall Street Journal, com ênfase na nova lei de saúde dos Estados Unidos, a "lei assinatura" do governo Obama, conhecida como Obamacare.

Vejamos o texto de Mulligan no Wall Street Journal abaixo (neste texto, ele menciona um artigo dele publicado no National Bureau Research, clique aqui para acessá-lo)

Casey Mulligan: How ObamaCare Wrecks the Work Ethic

A new wave of redistribution will arrive in America on Jan. 1, primarily thanks to the Affordable Care Act. The president's health-insurance plan forces those who hire, work and produce to pay full price for health care, while creating generous discounts for practically everyone else.
This second redistributionist wave of the Obama era will follow a first wave of tax hikes, additional unemployment benefits, food-stamp expansions, waived work requirements for welfare benefits, etc. These measures were supposed to be temporary, intended to help people cope with the recession. The recession officially ended in mid-2009, but many of the administration's measures continue.

Regardless of whether redistribution is achieved by collecting more taxes from families with high incomes, levying employment taxes on businesses, providing more subsidies to families with low incomes, or all of the above, an essential consequence is the same: a reduction in the reward for working. In a National Bureau of Economic Research paper issued in August, I quantify the combined effect of the two redistribution waves and higher payroll taxes on the financial reward for working.

The chart nearby shows an index of marginal tax rates for non-elderly household heads and spouses with median earnings potential. The index, a population-weighted average over various ages, occupations, employment decisions (full-time, part-time, multiple jobs, etc.) and family sizes, reflects the extra taxes paid and government benefits forgone as a consequence of working.
The 2009-10 peak for marginal tax rates comes from various provisions of the "stimulus" programs in the American Recovery and Reinvestment Act of 2009 and the extension of unemployment benefits to 99 weeks in some states. At the end of 2012, the marginal tax rate index reached its lowest value since 2008: 43.9%. A little over a year later (January 2014), the index will be close to 50%, driven up by the expiration of the payroll tax cut and multiple provisions of the Affordable Care Act. The ACA employer penalty, delayed until 2015, adds more than a percentage point in that year alone, while other ACA provisions strengthen their disincentives for the various reasons cited above.
The Affordable Care Act signup page on the website
By 2016, the index exceeds 50%, which is at least 10 percentage points greater than it was in early 2007.
The 50% rate is even higher than the rates that prevailed when the so-called Recovery and Reinvestment Act's redistribution was at its peak. Without new federal legislation and a departure from the strategy of forcing workers and employers to finance everyone else's health care, the new 50%+ rate will not be a peak, but rather a new normal for tax rates.
To appreciate the added burden that the two redistribution waves put on the labor market, look at what people keep, on average, when they decide to retain or accept a job, or to take on a longer work schedule. Before the recession, a decision to work would benefit public treasuries by an amount equal to 40% of the compensation from the job. The worker and his family got the other 60%.
In the years 2015 and beyond, full-time workers with median incomes will keep only half of the compensation created by their decisions, with the other half going to the government in the form of additional taxes and savings on subsidy payments. By keeping 50% rather than 60%, workers will find that the reward for holding a job will have fallen a damaging 17%.
Advocates of redistribution try to perpetuate the income-maximization fallacy that business continues as usual as long as tax rates are less than 100%, because receiving even 1% of your compensation is supposedly better than getting no compensation at all. But even if full confiscation were the only way that taxes would depress the labor market, recall that the nearby chart is just an average: The average rate rising to 50% and above involves millions of people with rates far higher.
America absolutely must have taxes and safety-net programs, even though they reduce the reward for working. But advocates for the recent program expansions have failed to acknowledge that redistribution necessarily increases marginal tax rates and contracts the labor market.
Don't be surprised if the second redistribution wave coincides with a recessionary double-dip.
Mr. Mulligan is a professor of economics at the University of Chicago and the author of "The Redistribution Recession" (Oxford, 2012).