Tudo é relativo
Enviado: 22/12/2002 0:38Comentário: por enquanto o mercado de taxa fixa, na europa, ainda apresenta algum potencial de ganhos, mas sobretudo se o raciocínio fôr feito em usd. Os bunds (10 anos) têm um spread relativamente aos 10ybonds de cerca de 20 pontos. Esse spread deve diminuir, e o euro deve continuar a valorizar-se relativamente ao usd.
O "awfully good value" que o Lee Thomas vê nos bunds deve ser visto numa perspectiva do investidor americano. Para um alemão é razoável, para um português já quase não tem interesse.
Depende da moeda, e da taxa de inflação. Estas duas variáveis condicionam imenso as expectativas do investidor.
Deixo aqui uma visão do Lee Tomas (um pouco suspeita, como não pode deixar de ser, até porque a Pimco tem estado compradora de dívida alemã nos últimos meses .....)
----------------------------------------------------
A central feature in many larger German towns and cities is the local Arbeitsamt - the sprawling public sector bureaucracy that supposedly puts the unemployed back to work. Living in Germany, it seems logical to translate Arbeitsamt as Unemployment Office because reducing unemployment is what that organization is all about. At least that is how one of us translated Arbeitsamt when first learning to speak German as a foreign language back in 1989. That was wrong. Arbeitsamt actually translates as Employment Office. But Unemployment Office wasn't too far off the mark. Since then Germany's unemployment has risen in the western states from 2 million to 2.7 million. Add those out of work in the reunified eastern states and 4.1 million people, 10% of the labor force, are unemployed in Germany today.
ECB to the Rescue
Fortunately, the ECB has just cut interest rates. That will fix Europe's unemployment problem, right? Unfortunately, it won't. Put simply, if your labor market does not work well, then you cannot get strong growth just by stimulating demand. Instead, as soon as growth picks up, so does inflation. And inflation may be a chronic, nagging problem even if growth is tepid. That is where Euroland is today: growth is anemic, only 0.8%, but inflation, at 2.2%, is still above the ECB's supposed ceiling of 2%. It has been above the 'ceiling' almost continuously for two years. Now 2.2% is not an intolerable rate of inflation. The ECB's inflation target of 'below 2%' is too low, and probably will be changed as soon as the ECB can decently change it without threatening its credibility. The problem is not that inflation is too high, but rather that inflation has remained stubbornly above target in the face of high unemployment and depressed economic growth. In a different time we called high inflation coupled with slow growth 'stagflation.'
During the 1970s, global stagflation was caused by (choose one or more, according to taste): OPEC; imprudent fiscal and monetary policies; demographics. In Europe today the stagflation comes from 'structural impediments.' Wages are inflexible downward. Protective labor laws prevent firms from shedding labor when times get tough, as they are right now. But companies that cannot fire in bad times will not hire in good times. Some of the highest non-wage labor costs in the world - covering statutory insurances for unemployment, pensions, health and old age care - raise the level of labor costs and prevent some willing workers - mainly the low skilled and the inexperienced - from finding employment. These laws and regulations are well intentioned, but they are worse than unproductive. They are counterproductive.
Ultimately everybody foots the bill for high labor costs. You pay once as a taxpayer, supporting an army of unemployed workers and their families. You pay again as a consumer, offered high prices and indifferent quality, especially in sectors like services where competition is limited and productivity often is low.
Deregulation worked in Europe's markets for telecommunications, electricity and gas. Prices fell, and consumers are better off for it. It seems obvious that the majority would be better off if more competition was brought to the labor market as well, but this is easier said than done. Euroland's largest economies - Germany, France and Italy - haven't exactly warmed to labor market reform. Earlier this year an assassin shot dead the architect of Italy's labor market reform bill. Germany has finally cut the cost of hiring the unemployed. But having given with one hand they took back with the other. They also raised payroll taxes. And in France, the most significant labor market 'reform' recently has been to restrict workers to spending only 35 hours per week on the job.
There are less tangible social costs to no-job policies, too. Chronic unemployment may create a permanent, alienated and discouraged underclass. It certainly contributes to the hostility workers may feel to 'outsiders' who may 'steal' their local jobs, like potential immigrants from the poorer parts of the European Union. Suspicion, parochialism and resentment is exactly the opposite of the spirit of moderation, unity and harmony that is supposed to characterize the new Europe. It is a lot easier to be moderate and welcoming if you don't risk losing your job.
The EMU Conundrum
It doesn't sound like things could get any worse for Germany, but they may.
A little inflation usually makes life easier for businessmen. If you cannot cut wages explicitly, at least a bit of inflation means you can cut wages indirectly, if you resist granting cost of living increases. Without a little inflation to grease the wheels, labor flexibility becomes even more important. Unfortunately, the more mature economies of Europe are going to have to learn to grow with inflation staying low, even if the ECB ultimately relaxes its restrictive inflation ceiling.
When Euroland's 12 nations irrevocably fixed their exchange rates to the euro they gave up sovereignty over short-term interest rates. The ECB now determines a single short-term interest rate for all. However, despite the convergence rules that force countries to get their inflation down before entering EMU, and despite sharing a single monetary policy, regional differences in inflation naturally persist. Inflation is highest in the countries that have the lowest incomes and are growing relatively quickly. If (i) the average inflation rate across Europe is capped by the ECB, and (ii), the less developed, faster-growing parts of Europe have inflation rates above this average, then (iii) the more economically mature parts of Europe, like Germany, must have inflation rates below the average. The rules of the EMU game mean Germany, and the other slower growing parts of Europe, should expect to suffer a chronic deflationary bias. There is no respite in sight. Inflation in Spain may fall as it matures and becomes more like core Europe, but when Europe eventually admits more rapidly growing, relatively high inflation economies in Central Europe to the EMU, the deflationary pressures on Germany will intensify. Even if European inflation drifts up to 3%, German businessmen may have to learn to prosper with only 1% inflation in their home market. Businesses in Germany cannot use inflation as a tool to compensate for inflexible labor markets unless the target for European inflation is radically revised upwards, to perhaps 4% or 5%. The chances of that happening are nil.
So on a secular basis, Germany cannot hope to avoid the increasing pressures to become more competitive, and that means painful reforms. The best Germany can hope for is a favorable window of opportunity to reform its markets - some monetary ease, then good economic times in which Germany can put its house in order. Santa came early: the ECB just cut rates by 50 bp to 2.75%. And while the ECB seems for the time being to be on hold, it looks like European inflation is going to fall sharply during the first half of 2003. (See the chart above.) Who knows, by the second quarter, with inflation running at 1% to 1.5% - well within target - perhaps the ECB will cut even more. Germany will soon have the window of opportunity to act.
If the ECB's critics are right, and Europe's main problem is too-tight money, then the recent cut (and perhaps others to come) should spark a robust recovery. We think optimists who expect that outcome are going to be disappointed. One reason to suspect tight monetary policy is not the main reason why Germany's unemployment rate is so high: just look next door, at the Netherlands. The Netherlands shares exactly the same tight monetary policy with Germany. Both are mature, high income economies. But the Dutch boast unemployment of only 2.7%. Why the difference? The Netherlands has enacted liberal labor reforms that encourage employers to hire and encourage workers to find jobs that suit them. There can be no more dramatic demonstration that labor reforms work than contrasting the experiences of the Netherlands and Germany during the past decade. (See the comparison of unemployment rates below).
-------------------------
(o gráfico indica uma evolução de longo prazo crescente no desemprego na alemanha -cerca de 10% actualmente - contra uma evolução contrária na Holanda que nesta última década conseguiu baixar a taxa dos cerca de 8% para 3%)
-------------------------------------
If we are right, if Europe's main problem is on the supply side, then juicing demand is not going to produce satisfying growth. In other words, if you thought that easier monetary policy was the key to fixing Euroland's jobless stagflation, you are about to be proven wrong. (Or we are about to be proven wrong!) Easy money can only do so much; what Euroland really needs is more competition in its markets for labor, services and goods.
In the recent past, German politicians could blame the ECB's tight-fisted policies for the German economic malaise. Now the ECB has cut, and they may cut again if, as we suspect, the European inflation figures look much better by the end of the first quarter. If, as we also suspect, it doesn't work - German economic growth remains tepid and unemployment remains high - new policies will be needed.
According to one common sense view, Germany needs a spoonful of sugar - an economic boom in Europe - to make the medicine of reform go down more easily. But a case can be made that politicians will fritter away the coming opportunity, just as they did the last time, when the U.S. bubble economy produced the right environment in which to effect German reform. A more pessimistic view is that it may take an economic crisis to force Germany to grasp the economic nettle. In other words, a recession would hurt in the short run, but it may be necessary to get Germany on the road it needs to be on.
Right now Germany lacks the air of desperation that may be needed to catalyze change. Recent scare headlines in the financial press - Germany May Be the Next Japan! - are extreme, but one similarity is telling. Germany today, like Japan a decade ago, is wealthy enough to feel that reform is more optional than obligatory. Germany may need a recession before it finds its own version of Margaret Thatcher or Ronald Reagan, both of whom stepped in as reformers only after their economies decayed to the point that the electorate was willing to try radically new policies. So it may take some 'tough love' on the part of ECB to get Germany onto a post-reform, high growth path. By running tight policy, or even inducing recession, the ECB can force German politicians to push reforms that otherwise would remain on the back burner.
Recessions are bad for people, but they are good for bonds. That makes the European fixed income market look awfully good value.
Dr. Lee R. Thomas, III
Managing Director, PIMCO
O "awfully good value" que o Lee Thomas vê nos bunds deve ser visto numa perspectiva do investidor americano. Para um alemão é razoável, para um português já quase não tem interesse.
Depende da moeda, e da taxa de inflação. Estas duas variáveis condicionam imenso as expectativas do investidor.
Deixo aqui uma visão do Lee Tomas (um pouco suspeita, como não pode deixar de ser, até porque a Pimco tem estado compradora de dívida alemã nos últimos meses .....)
----------------------------------------------------
A central feature in many larger German towns and cities is the local Arbeitsamt - the sprawling public sector bureaucracy that supposedly puts the unemployed back to work. Living in Germany, it seems logical to translate Arbeitsamt as Unemployment Office because reducing unemployment is what that organization is all about. At least that is how one of us translated Arbeitsamt when first learning to speak German as a foreign language back in 1989. That was wrong. Arbeitsamt actually translates as Employment Office. But Unemployment Office wasn't too far off the mark. Since then Germany's unemployment has risen in the western states from 2 million to 2.7 million. Add those out of work in the reunified eastern states and 4.1 million people, 10% of the labor force, are unemployed in Germany today.
ECB to the Rescue
Fortunately, the ECB has just cut interest rates. That will fix Europe's unemployment problem, right? Unfortunately, it won't. Put simply, if your labor market does not work well, then you cannot get strong growth just by stimulating demand. Instead, as soon as growth picks up, so does inflation. And inflation may be a chronic, nagging problem even if growth is tepid. That is where Euroland is today: growth is anemic, only 0.8%, but inflation, at 2.2%, is still above the ECB's supposed ceiling of 2%. It has been above the 'ceiling' almost continuously for two years. Now 2.2% is not an intolerable rate of inflation. The ECB's inflation target of 'below 2%' is too low, and probably will be changed as soon as the ECB can decently change it without threatening its credibility. The problem is not that inflation is too high, but rather that inflation has remained stubbornly above target in the face of high unemployment and depressed economic growth. In a different time we called high inflation coupled with slow growth 'stagflation.'
During the 1970s, global stagflation was caused by (choose one or more, according to taste): OPEC; imprudent fiscal and monetary policies; demographics. In Europe today the stagflation comes from 'structural impediments.' Wages are inflexible downward. Protective labor laws prevent firms from shedding labor when times get tough, as they are right now. But companies that cannot fire in bad times will not hire in good times. Some of the highest non-wage labor costs in the world - covering statutory insurances for unemployment, pensions, health and old age care - raise the level of labor costs and prevent some willing workers - mainly the low skilled and the inexperienced - from finding employment. These laws and regulations are well intentioned, but they are worse than unproductive. They are counterproductive.
Ultimately everybody foots the bill for high labor costs. You pay once as a taxpayer, supporting an army of unemployed workers and their families. You pay again as a consumer, offered high prices and indifferent quality, especially in sectors like services where competition is limited and productivity often is low.
Deregulation worked in Europe's markets for telecommunications, electricity and gas. Prices fell, and consumers are better off for it. It seems obvious that the majority would be better off if more competition was brought to the labor market as well, but this is easier said than done. Euroland's largest economies - Germany, France and Italy - haven't exactly warmed to labor market reform. Earlier this year an assassin shot dead the architect of Italy's labor market reform bill. Germany has finally cut the cost of hiring the unemployed. But having given with one hand they took back with the other. They also raised payroll taxes. And in France, the most significant labor market 'reform' recently has been to restrict workers to spending only 35 hours per week on the job.
There are less tangible social costs to no-job policies, too. Chronic unemployment may create a permanent, alienated and discouraged underclass. It certainly contributes to the hostility workers may feel to 'outsiders' who may 'steal' their local jobs, like potential immigrants from the poorer parts of the European Union. Suspicion, parochialism and resentment is exactly the opposite of the spirit of moderation, unity and harmony that is supposed to characterize the new Europe. It is a lot easier to be moderate and welcoming if you don't risk losing your job.
The EMU Conundrum
It doesn't sound like things could get any worse for Germany, but they may.
A little inflation usually makes life easier for businessmen. If you cannot cut wages explicitly, at least a bit of inflation means you can cut wages indirectly, if you resist granting cost of living increases. Without a little inflation to grease the wheels, labor flexibility becomes even more important. Unfortunately, the more mature economies of Europe are going to have to learn to grow with inflation staying low, even if the ECB ultimately relaxes its restrictive inflation ceiling.
When Euroland's 12 nations irrevocably fixed their exchange rates to the euro they gave up sovereignty over short-term interest rates. The ECB now determines a single short-term interest rate for all. However, despite the convergence rules that force countries to get their inflation down before entering EMU, and despite sharing a single monetary policy, regional differences in inflation naturally persist. Inflation is highest in the countries that have the lowest incomes and are growing relatively quickly. If (i) the average inflation rate across Europe is capped by the ECB, and (ii), the less developed, faster-growing parts of Europe have inflation rates above this average, then (iii) the more economically mature parts of Europe, like Germany, must have inflation rates below the average. The rules of the EMU game mean Germany, and the other slower growing parts of Europe, should expect to suffer a chronic deflationary bias. There is no respite in sight. Inflation in Spain may fall as it matures and becomes more like core Europe, but when Europe eventually admits more rapidly growing, relatively high inflation economies in Central Europe to the EMU, the deflationary pressures on Germany will intensify. Even if European inflation drifts up to 3%, German businessmen may have to learn to prosper with only 1% inflation in their home market. Businesses in Germany cannot use inflation as a tool to compensate for inflexible labor markets unless the target for European inflation is radically revised upwards, to perhaps 4% or 5%. The chances of that happening are nil.
So on a secular basis, Germany cannot hope to avoid the increasing pressures to become more competitive, and that means painful reforms. The best Germany can hope for is a favorable window of opportunity to reform its markets - some monetary ease, then good economic times in which Germany can put its house in order. Santa came early: the ECB just cut rates by 50 bp to 2.75%. And while the ECB seems for the time being to be on hold, it looks like European inflation is going to fall sharply during the first half of 2003. (See the chart above.) Who knows, by the second quarter, with inflation running at 1% to 1.5% - well within target - perhaps the ECB will cut even more. Germany will soon have the window of opportunity to act.
If the ECB's critics are right, and Europe's main problem is too-tight money, then the recent cut (and perhaps others to come) should spark a robust recovery. We think optimists who expect that outcome are going to be disappointed. One reason to suspect tight monetary policy is not the main reason why Germany's unemployment rate is so high: just look next door, at the Netherlands. The Netherlands shares exactly the same tight monetary policy with Germany. Both are mature, high income economies. But the Dutch boast unemployment of only 2.7%. Why the difference? The Netherlands has enacted liberal labor reforms that encourage employers to hire and encourage workers to find jobs that suit them. There can be no more dramatic demonstration that labor reforms work than contrasting the experiences of the Netherlands and Germany during the past decade. (See the comparison of unemployment rates below).
-------------------------
(o gráfico indica uma evolução de longo prazo crescente no desemprego na alemanha -cerca de 10% actualmente - contra uma evolução contrária na Holanda que nesta última década conseguiu baixar a taxa dos cerca de 8% para 3%)
-------------------------------------
If we are right, if Europe's main problem is on the supply side, then juicing demand is not going to produce satisfying growth. In other words, if you thought that easier monetary policy was the key to fixing Euroland's jobless stagflation, you are about to be proven wrong. (Or we are about to be proven wrong!) Easy money can only do so much; what Euroland really needs is more competition in its markets for labor, services and goods.
In the recent past, German politicians could blame the ECB's tight-fisted policies for the German economic malaise. Now the ECB has cut, and they may cut again if, as we suspect, the European inflation figures look much better by the end of the first quarter. If, as we also suspect, it doesn't work - German economic growth remains tepid and unemployment remains high - new policies will be needed.
According to one common sense view, Germany needs a spoonful of sugar - an economic boom in Europe - to make the medicine of reform go down more easily. But a case can be made that politicians will fritter away the coming opportunity, just as they did the last time, when the U.S. bubble economy produced the right environment in which to effect German reform. A more pessimistic view is that it may take an economic crisis to force Germany to grasp the economic nettle. In other words, a recession would hurt in the short run, but it may be necessary to get Germany on the road it needs to be on.
Right now Germany lacks the air of desperation that may be needed to catalyze change. Recent scare headlines in the financial press - Germany May Be the Next Japan! - are extreme, but one similarity is telling. Germany today, like Japan a decade ago, is wealthy enough to feel that reform is more optional than obligatory. Germany may need a recession before it finds its own version of Margaret Thatcher or Ronald Reagan, both of whom stepped in as reformers only after their economies decayed to the point that the electorate was willing to try radically new policies. So it may take some 'tough love' on the part of ECB to get Germany onto a post-reform, high growth path. By running tight policy, or even inducing recession, the ECB can force German politicians to push reforms that otherwise would remain on the back burner.
Recessions are bad for people, but they are good for bonds. That makes the European fixed income market look awfully good value.
Dr. Lee R. Thomas, III
Managing Director, PIMCO