onsdag 18 mars 2015

När de som ska värna om den finansiella stabiliteten abdikerat

"Given how hard it is to accumulate capital and how easy it can be to lose it, it is astonishing how many investors almost single-mindedly focus on return, with a nary of thought about risk. Lured into their slumber by the 'Greenspan-now Bernake-put', an investment mandate of relative and not absolute returns, as well as a four-year period of generally favorable market conditions, investors seem to be largely oblivious to off the radar events and worst-case scenarios. History suggests that a reordering of priorities lies in the not too distant future." (Seth Klarman 2007)

(de som ska värna om den finansiella stabiliteten är centralbankerna eller i Sveriges fall, vår kära Riksbank. Jag ser ingen anledning till att skriva ner mina egna tankar om den monetära politiken när andra mer kompetenta individer redan beskrivit allt som finns att beskriva. Den mer positiva aspekten är att citering tar ganska lite tid att "skriva ner".)

En bekant till mig beskrev nationalekonomi som vetenskap enligt nedan:

"Nationalekonomi, läran om antagande" (person x)

Centralbankerna fortsätter missförstå faktumet att ekonomin är ett komplext system. De vägrar dra lärdomar från tidigare kriser och den misslyckade monetära politiken de senaste 15 åren. Flera år innan finanskrisen bröt ut sänkte FED räntan kraftigt, vilket i hög grad bidrog till fastighetsbubblan. FED ville väl och trodde att den lägre räntan skulle lösa en serie problem, men räntesänkningen fick konsekvenser ingen kunde föreställa sig. Räntesänkningen bidrog till en av de största fastighetsbubblorna någonsin.

2012 letter Seth Klarman

"If economics were a hard science like chemistry, you’d mix a little of this with a bit of that and the concoction would lead to strong economic growth, full employment, rising home prices, buoyant financial markets, and low inflation every time. But economics is a soft science, and real life simply doesn’t work so predictably. Though economists might wish otherwise, economics is, at its core, behavioral.  Modern economies are too complex to be reliably modeled; their connections and correlations are lose and imprecise, the second- and third-order effects largely immeasurable the fickle vagaries of individual and aggregate human behavior utterly unknowable. Put an economist in a powerful government job and provide levers that can be pulled to start the printing presses, set reserve requirements, fiddle with the Fed funds rate, expand the Fed’s balance sheet, and deliver indecipherable communiqués, and that economist will feel compelled to pull those levers. He or she, like a monkey with a typewriter, might even give us Shakespeare (or Adam Smith) on occasion. But mostly that economist will spout gibberish, a mélange of untested and potentially counterproductive measures that unleash all manner of unintended consequences." (Seth Klarman, 2012 letter) 

"Bernanke and Draghi seem intent on buying back bonds indefinitely, whether or not their actions deliver an economic recovery and in spite of any unpleasant side effects. It is clear after four years and counting that their efforts have not delivered as predicted. Only a zealot would continue on with a plan that is not working and, in defiance of reason, massively expand it. But for Bernanke and Draghi, coming up short only seems to steel their resolve. In the words of The Wall Street Journal’s Richard Barley, “quantitative easing, a shocking development when first implemented, has now become mainstream.” The greatest danger? How swiftly market participants have come to accept such actions as normal. What could possibly go wrong? Well, just about everything: markets distorted, future returns diminished, moral hazard snuffed out, new bubbles inflating, caution abandoned, inflation unleashed. When investors come to believe that downside tail risk has been extinguished, it emboldens them to pay higher prices, there by accepting more risk with less return. In this case, such excesses are not a mere side effect. As crazy as it seems, especially given who the masterminds are, reckless investor behavior is, in fact, the planned objective. But unlike most plans, there is no fallback position and no feasible exit. Why is no one asking hard questions about these policies? lf they are the proper responses to economic conditions, why haven’t they worked as predicted? Why, four years in, are things so bad that efforts must be redoubled?" (Seth Klarman, 2012 letter)

Men Seth Klarman beskriver situationen ännu bättre i ett senare brev;

Q3 2012 Shareholder Letter

"It is clear that someday the Fed will decide that the economy has strengthened sufficiently to end and then potentially reverse QE and zero-rate policies. Any possible sale of trillions of dollars of securities owned by the Fed, at such time would most likely be at a substantial loss given that interest rates would likely have risen and bond prices have fallen. Also, when people with a 30 year, 3.5% mortgage seek to move at a time when new mortgages now cost 5% to 6% or more, buyers will pause, reducing demand and driving house prices lower.QE3 may deliver a dose of helium to housing prices, but eventually helium leaks out of balloons, and gravity pulls them to earth. What kind of policy is this: untested; inflationary; eroding free market signals; diverting more of the country's resources toward housing at the expense of priorities such as infrastructure, technology, or science and medical research; and inevitably only a temporary fix with no enduring benefit?

Finally, we must question the morality of Fed programs that trick people (as if they were Pavlov's dogs) into behaviors that are adverse to their own long-term best interest. What kind of government entity cajoles savers to spend, when years of under-saving and overspending have left the consumer in terrible shape? What kind of entity tricks its citizens into paying higher and higher prices to buy stocks? What kind of entity drives the return on retirees' savings to zero for seven years (2008-2015 and counting) in order to rescue poorly managed banks? Not the kind that should play this large a role in the economy." (Seth Klarman, Q3 2012 Shareholder Letter)

Q3 2013 Shareholder Letter

"Is it possible that the average citizen understands our country's fiscal situation better than many of our politicians or prominent economists?

Most people seem to viscerally recognize that the absence of an immediate crisis does not mean we will not eventually face one. They are wary of believing promises by those who failed to predict previous crises in housing and in highly leveraged financial institutions.

(...) When an economist tells them that growing the nation's debt over the past 12 years from $6 trillion to $16 trillion is not a problem, and that doubling it again will still not be a problem, this simply does not compute. They know the trajectory we are on.

When politicians claim that this tax increase or that spending cut will generate trillions over the next decade, they are properly skeptical over whether anyone can truly know what will happen next year, let alone a decade or more from now.

They are wary of grand bargains that kick in years down the road, knowing that the failure to make hard decisions is how we got into today's mess. They remember that one of the basic principles of economics is scarcity, which is a powerful force in their own lives.

They know that a society's wealth is not unlimited, and that if the economy is so fragile that the government cannot allow failure, then we are indeed close to collapse. For if you must rescue everything, then ultimately you will be able to rescue nothing.

They also know that the only reason paper money, backed not by anything tangible but only a promise, has any value at all is because it is scarce. With all the printing, the credibility of our entire trust-based monetary system will be increasingly called into question.

And when you tell the populace that we can all enjoy a free lunch of extremely low interest rates, massive Fed purchases of mounting treasury issuance, trillions of dollars of expansion in the Fed's balance sheet, and huge deficits far into the future, they are highly skeptical not because they know precisely what will happen but because they are sure that no one else--even, or perhaps especially, the  policymakers—does either." (Klarman, Q3 2013)

Det är sorgligt hur den monetära politiken allt mer  visar en total avsaknad av långsiktighet. Centralbanker försöker medvetet/omedvetet blåsa upp tillgångsbubblor över hela världen, vilket de har lyckats förhållandevis väl med. Tyvärr kan centralbanker inte lösa några av de strukturella problemen och den monetära politiken kommer självfallet få långsiktiga konsekvenser.

Det är viktigt att komma ihåg att den höga tilltron till centralbankerna idag på INTET sätt är ny, utan denna överdrivna tilltro har uppstått flera gånger tidigare genom historien. Inför finanskrisen var också tilltron stor till centralbankerna och vi måste sannerligen var i en ny "centralbanksekonomi" om alla dessa felallokering som sker inte medför några konsekvenser.

Jag tvivlar på att centralbankerna kommer hinna höja räntorna innan bubblorna som byggts upp i världsekonomin brakar samman. Vi kan alltså gå in i en djup recession med räntorna i botten och rekordhöga skuldnivåer, men mest av allt ingen förmåga att förmildra fallet. Förmågan att förmildra fallet är begränsad då stater redan har uttömt förmågan stimulera genom ökad belåning och centralbankerna har satt räntorna till noll. Vi balanserar på en knivsegg och risken är att ekonomin inte gör vad centralbankerna önskar, fallhöjden i ett sådant scenario är större än vad de flesta vågar föreställa sig.

Kort sagt:
Vägen till framgång när man investerar är att villkorslöst BTFD (Buy The Fucking Dip) och BTFATH (Buy The Fucking All Time High), för oavsett vad som sker med värderingarna på börsen och den makroekonomiska utvecklingen så kommer centralbankerna alltid säkerställa att mindre begåvat beteende (självcensur) inte får några som helst konsekvenser. Vilken fantastisk marknad eller hur? det är nästan som om det vore för bra för att vara sant?

4 kommentarer:

  1. spännande tider vi lever i! Det verkar onekligen för bra för att vara sant att centralbankerna kan trolla fram tillväxt utan att skapa andra problem.

  2. Bra inlägg. Klarman framstår dessutom som en väldigt klarsynt person! Dagens situation faller på sin egen orimlighet, verkar det som.

    1. Investerare som Buffett och Marks är duktiga på att formulera sina tankar, men Klarmans skrifter är på en helt annan nivå. Jag gillar inte när tilltron är så här stor till centralbankerna, speciellt eftersom deras "track record" är väldigt dålig.