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Tuesday, 2 August 2016

Helicopter Money Or Blackhawk Down?


Helicopter money: Are central banks edging closer to dropping cash from the sky? 



The Bank of England is expected to cut interest rates from already historic lows this week as it prepares to avoid a recession following the UK's decision to leave the European Union (EU). The governor Mark Carney surprised many economists last month by not cutting interest rates, but onThursday a rate cut to 0.25% is regarded as a near certainty, and possibly a renewed round of money printing.
Bank rate has been held at a record low of 0.5% since March 2009, and the central bank has so far amassed £375bn of government debt in the aftermath of the financial crisis.

A number of closely watched purchasing managers' surveys and other reports have shown sharp contractions in construction, services and factory output since the Brexit vote.
But many economists argue that central banks are running out of runway to lift fragile economies after the 2007 crisis, even by the unconventional means they have adopted so far.
Some say it is time to take up more radical measures, such as helicopter money. This is a term adopted by the economist Milton Friedman in 1969, to describe the idea of a central bank printing money and dropping in onto citizens in order to kick-start the economy.
Allison Nathan, senior strategist for Goldman Sachs Research said this policy "aims to boost nominal gross domestic product by increasing overall spending on goods and services".
Advocates of this measure say this is a highly effective way of putting "free" money into the hands of ordinary people who will be inclined to spend it, rather than pay off debts.


The message of Rise and Fall is this. For most of human history, economic progress moved at a crawl. According to the economic historian Bradford DeLong, from the first rock tools used by humanoids three million years ago, to the earliest cities ten thousand years ago, through the Middle Ages, to the beginning of the Industrial Revolution around 1800, living standards doubled (with a growth of 0.00002 percent per year). Another doubling took place over the subsequent period to 1870. Then, according to standard calculations, the world economy took off.

In discussing the standards and terms of C&I loans, the report said, "changes to terms on C&I loans for large and middle-market firms were mixed. Specifically, a modest percentage of banks reportedly narrowed spreads of loan rates over the cost of funds, while moderate fractions of banks reportedly increased the premiums charged on riskier loans, on net. Banks also reported that changes in the terms of loans to small firms were mixed: Whereas moderate shares of banks reported having narrowed spreads of loan rates over the cost of funds and having decreased the use of interest rate floors, on net, modest percentages of banks reportedly increased the premiums charged on riskier loans and tightened loan covenants on net."

Given the atypical case for Yamal, laboratory studies Rospotrebnadzor carried out in several stages in compliance with all the rules of diagnosis of anthrax . Used for most of the samples taken from the tundra "negative" - the diagnosis was not confirmed. No anthrax and the girl translated last week in the intensive care unit for a particular observation. Today, the child feels well and is under observation in the ward. Unfortunately, there are positive findings in the research results. The preliminary diagnosis is confirmed by laboratory medical research in eight patients (3 children) Salekhard hospital. Doctors are used intensive treatment and preventative measures for all patients, including those with a negative diagnosis.




What Oil in the $40s Means for Oil Majors



BP and Shell are trading with dividend yields above 7%, while Eni, which cut its… It all seemed to be going so well, but European oil groups have stumbled again. After all, oil prices had ridden a strong, sustained recovery and investor faith was growing that these companies really were tackling costs and changing their business models to suit cheaper oil. But now the bumps are back. Second-quarter results were disappointing and the oil price is down about 20% in the past two months. The results showed that even before prices began to slide, investors and analysts had got a little ahead of themselves, particularly with regard to cash flows. That is far away from how the five companies have been performing. Free cash flows actually have been worsening and recent results took cumulative flows for the past four quarters at the big five down to minus $23 billion, […]

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