Yves here. The post below from Paul Buchheit makes a persuasive layperson’s case for a financial transactions tax. There is an equally sound case to be made from a financial markets viewpoint.
Read more...Yves here. As readers likely recall, Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst wrote a paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” which revealed serious methodological problems with one of the linchpin papers used to justify cutting government spending even in times of recession. Robert Pollin here discusses some of the bigger issues in the political and economic debates on austerity and the aftermath of the financial crisis.
Read more...The Chinese government, as has been widely reported, is trying to cool growth, in large measure to take the hot air out of its shadow banking sector. But can it engineer its hoped-for soft landing?
Read more...Yves here. One of my colleagues is back from a month in Europe (a lot of travel, and lots of meetings with economists and political types). I need to debrief him more fully, but his short take was Portugal is clearly in crisis, with Spain and Italy not far behind, and that the political train wrecks will hit faster than the economic ones. Although I can’t see how the former won’t accelerate the arrival of the latter.
Read more...Yves here. This post looks at the unwinding of quantitative easing in the UK and raises some concerns.
Read more...Yves here. Because the European slow-motion train wreck is turning out to be particularly slow, it’s almost become background noise in the US, almost a lesser version of the now two lost decades in Japan. But what is happing in Europe is less benign and less likely to be able to continue anywhere near that long.
Read more...Yves here. As has become typical of late, the markets reacted sharply to the release of the FOMC minutes on Wednesday and Bernanke’s remarks later. For a really good effort at parsing the minutes, see Fedwatcher Tim Duy. The one clear conclusion was how unclear the minutes were:
Read more...Yves here. I don’t mean to make an object lesson of the author of this piece, van Onselen, since the point he is making, about demographics as a driver of growth, is valid from the vantage point he is taking (that of investment time horizons, which by nature are comparatively short).
But this perspective is simultaneously frustrating to contend with.
Read more...The financial crisis was brutal for Germany, but the recovery was steep. A key element is the relentless drive to export. But the German “success recipe” looks to be losing its luster.
Read more...It’s conventional to deem local journalism to be dead, but Josh Salman at the Sarasota Herald-Tribune has written well-researched investigative story on bank bidding at foreclosures in his neck of the woods, Big lenders bidding to keep homes, that has national implications.
Read more...By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness
Manufacturing and PMI Data out for Europe overnight and, much like the flash data, the news is getting better but with some serious caveats.
Read more...Satyajit Das reviews three books about our current economic and political woes.
Read more...Yves here. This post is a workmanlike compilation of trends in the driving habits of Americans. Some of the data shows that use of public transportation has been rising faster than population growth…yet budget stresses mean those services are regularly targeted for fare increases and schedule cutbacks.
Read more...Average national income is a notoriously imperfect measure of the average person’s well-being.
Read more...By Leith van Onselen, Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. You can follow him on Twitter at @leithvo. Cross posted from MacroBusiness
Westpac Institutional Bank yesterday released a sobering note (below) on the ongoing income squeeze taking place in the US.
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