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!
Read more...Category Archives: Economic fundamentals
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.
Read more...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.
Read more...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.
Read more...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.
Read more...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.
Read more...Will China Stop Taper?
That is the question today. Let’s first ask markets.
Read more...Ann Pettifor on Combatting the Despotic Power of Finance
Economist Ann Pettifor discusses how economies around the world moved from using borrowing to support productive investments to fueling speculation and consumption, and how that led to the financial crisis. She also describes how the post-crisis response to the debt overhang isn’t merely ineffective but in fact counterproductive.
Read more...China Credit Worries Rise as Large Shadow Banking Default Looms
China faces the first big test of its shadow banking system, in the form of a pending default. How is it likely to fare?
Read more...Gail Tverberg: How the EIA, IEA, and Other Researchers Are Modeling the Wrong Growth Limit
Why the real constraint on energy production isn’t the availability of resources, but the cost of developing them, and how these neglected investment constraints have big ramifications for “peak energy” and economic growth generally.
Read more...Wolf Richter: The Next Tire To Drop On The US Economy
After the last few years of strong sales growth, the US auto industry may be headed for a world of hurt. If that happens, the US economy would suffer too.
Read more...Has the Developed World Hit “Peak Car Use”?
Yves here. While this piece provides a solid overview of the fallen status of cars, it misses an obvious contributor to the lack of enthusiasm for them among the young: with weak incomes and in many cases, heavy student debt loads, an automobile is too large an expense relative to what they get out of it.
Read more...Wolf Richter: How the Fed’s “Wealth Effect” Quack Medicine Hurts Renters and With Them, Consumption
The Fed is explicitly relying on the wealth effect to stimulate spending. It’s theory is that if asset values rise, people will feel richer and spend more. But that’s not exactly how this movie is playing out.
Read more...Can Chile Reform the Neoliberal Model?
Chile is often a social laboratory that gives an advance view of what is coming……
Read more...The BLS Report Covering December 2013: A Bad Report
Yves here. In case you missed it, there was a great deal of consternation at the surprisingly low level of job additions in Friday’s employment reports.
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