Category Archives: Economic fundamentals

Wage Shares Fall in the US, Germany and Many Other Countries While Financial Shocks Hit Emerging Economies

ves here. This Real News Network interview with Yilmaz Akyuz, formerly the Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD), describes how the problems that produced the financial crisis have morphed into new, no less troubling problems. One key part of this discussion focuses on how China has adapted to its considerably smaller trade surplus, and why having Germany as the new excessive exporter poses new perils to the global economy.

Gaius Publius: Rising Inequality – Recovery Occurring Almost Exclusively Among the Wealthy

America’s income inequality has grown so wide that the current “recovery” is driven primarily by the upper fifth of income earners, as revealed by the latest consumer spending data.

Joe Firestone: Dear Dr. Krugman – Please Let Me Explain

Paul Krugman can’t explain why the deficit issue has suddenly dropped off the agenda. Perhaps I can help.

Wolf Richter: Cracks In The Tech Bubble (That Doesn’t Exist)

After having denied feverishly that any kind of bubble exists, people watch incredulously as the hot air hisses out of the very bubble whose existence they’re still denying. And afterwards, everyone had seen it coming. Because cracks had been visible for a long time.

One of the cracks is Twitter.

Philip Pilkington: Paul Krugman Pushes Factually Inaccurate Arguments About Argentina to Support Discredited Monetarist Ideas

Yves here. With Argentina one of the emerging markets economies whose currency has taken a huge tumble, its aggressive pro-labor, redistribution-oriented policies have come under attack (as an aside, one has to note that Turkey, which was touted as a model emerging economy a few years back, is also fighting a currency downspiral). And a predictable by-product is that some of Argentina’s policies have been misrepresented. For instance, it’s widely accused of “living beyond its means”. Yet as this post shows, the government ran surpluses in eight of the past ten years.

Danger of Global Recession After 30 Years of Neoliberal Counterrevolution

Heiner Flassbeck is one of the few economists to get into positions of influence despite being firmly opposed to the prevailing doctrine of neoliberalism. He’s also direct and articulate.

Yanis Varoufakis: Germany’s Choice: Authoritarianism or Hegemony? (*)

For those of us who grew up under totalitarian regimes, it is noteworthy that Europeans are resorting to a time-honoured tradition: telling jokes as a form of defiance.

Market Rout Continues, Proving Abject Failure of Fed’s Forecasts and Policies (Updated)

In case you missed it, it’s ugly out there. US markets swooned as an unexpectedly weak manufacturing report, the ISM, was so bad it couldn’t be attributed solely to bad weather and deepened investor funk.

Emerging Markets Contagion Starting to Hit Eurozone

Emerging markets-related disruption continued overnight, as the Nikkei fell nearly 2%, pounded by the rise in the yen due to its status as a flight currency. Other Asian markets took a hit as well, with only Australia emerging relatively unscathed.

Wolf Richter: No Wonder German Workers Drag Down Retail Sales – And Much Of The Economy

Now we learn one of the reasons Germans are so keen to punish periphery countries. Germans don’t get enough retail therapy!

Ignacio Portes: How the Left Underestimates Chile’s Right-Wing Keynesians

Yves here. Please welcome Igancio Portes to NC. He’s a sophisticated young writer who has a sharp eye for power dynamics and is keenly interested in why the left (the genuine left as opposed to the fake version we have in the US) so often fails to achieve its intended results when it gets control of a government. He’ll be providing posts from time to time on Latin America, which is too often covered in a cursory and propagandized manner in the mainstream English language press.

Former IMF Chief Economist, Now India’s Central Bank Governor Rajan Takes Shot at Bernanke’s Destabilizing Policies

As Bernanke is about to take leave of office, attacks on his policies are becoming louder, thanks to financial markets turmoil resulting from the Bernanke/Geithner approach to the crisis: do whatever it takes to restore as much of status quo ante as possible. The problem, of course, is that status quo ante is what got us in this mess in the first place.

George Mangus Warns of Broad Impact of Emerging Markets Turbulence

In the runup to the global financial crisis, George Magnus, who was then chief economist at UBS, was one of the most insightful commentators and was early to call how bad things might get. He’s back to sound alarms about the emerging markets turmoil.

Mr. Market is Getting Frazzled Over the Fed’s Neglect of Its Pet Wishes

A brief surge of optimism, in the form of a short-lived rally in the belegured Turkish Lira and South African rand after their central banks raised interest rates to try to halt the plunge in currency values, has fizzled. And the Fed reducing its dosage of market tonic, in the form of QE, only soured investors’ already bad mood.

The Emerging Markets Rout Abates….for Now

Journalists and laypeople tend to use stock markets at their proxy for economic and financial market conditions. The performance of US stock markets looked like an encouraging return to a semblance of normalcy after last week’s squall, until a wave of selling in the final hour, with 600 million shares of volume, pushed the major indexes solidly into negative territory. As of this writing, that barometer is still a bit wobbly. Australia was down 1.26% overnight and the Nikkei off .17%. But Chinese and the Singapore markets are up, as are European and the S&P and DJIA indices.

But some of the explanations are less persuasive than others.