Submitted by Edward Harrison of Credit Writedowns Last week, I highlighted some of the ideas of Australian economist Steve Keen in my post, “Politics and reform: Say I’m a politician….” Keen is of the Minsky camp and he believes that an unsustainable debt bubble has build up in the industrialized world which can only be […]
Read more...During the tense months of the crisis, every so often there would be a story on the looming threat of mounting corporate debt defaults. With more than half the corporate bonds rated junk, thanks to highly-levered takeovers, it wasn’t hard to imagine that a protracted economic bad spell could lead to a lot of defaults. […]
Read more...By George Washington of Washington’s Blog. Inside the beltway and among mainstream economists, Larry Summers has the reputation of being a genius. But Australian PhD economist Steve Keen points out a huge gap in the thinking of Summers – and all neoclassical economists. Specifically, in an essay written today, Keen explains the weakness in the […]
Read more...Submitted by Edward Harrison of Credit Writedowns Back in April I told you I anticipated an uptick in GDP in part because of changes in inventories – massive change in the inventories. At the time, I thought I was going out on a limb by suggesting we could see positive GDP numbers in Q3 and […]
Read more...Let’s see, Leon Black of Apollo Management, which is a very savvy real estate player, warned of a coming “black hole” in commercial real estate six months ago. US bank regulators seem to be taking warnings of his sort seriously only now. The Fed is poking its nose into the portfolios of some banks, oddly […]
Read more...By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Evaluating the recent performance of the Fed is not a straight forward exercise. The turmoil in the financial system, […]
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Read more...The UK business press had been even more optimistic about recovery that its US counterpart, so the less than cheery news about retail sales in London is a blow to the view that the worst was indeed past. One of the reasons shopping had held up so well to date was the English capital’s role […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Back in February, I asked you if we were experiencing a recession or depression. A plurality said it was a depression with a small ’d.’ I agreed and went on to explain why. Since then, things have changed and we seem to be on the verge of what […]
Read more...By George Washington of Washington’s Blog. A 2005 letter in premier scientific journal Nature reviews the research on trust and economics: Trust … plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down. In the absence of trust in a country’s institutions and leaders, […]
Read more...By George Washington of Washington’s Blog. Unemployment is disastrous on both the individual and societal level. Individuals who look for work but can’t find it are miserable. Indeed, most people who lose their job are unprepared for their circumstances.[1] On the national level, high unemployment is both cause and effect concerning other problems with the […]
Read more...Um, this isn’t exactly consistent with the recovery story. From MarketWatch: Employers’ hiring plans for the upcoming fourth quarter dropped to their lowest level in the history of Manpower’s Employment Outlook Survey, which started in 1962. A net -3% of employers said they’ll hire in the fourth quarter, down from -2% in the third quarter, […]
Read more...We’ve commented from time to time on dubious Chinese data releases. But this report from Foreign Policy reports on an interest aspect: that the statistics are not manipulated only in the normal bureaucratic manner (fudging them) but also by getting companies to change behavior so it can be tallied in a more flattering fashion. The […]
Read more...The headline statistic, which comes out of a study by the non-partisan California Budget Project, in isolation sounds worse than it is (which is not to say that this factoid is good, mind you). Labor force participation before the downturn was in the 66%ish range, so this is a meaningful decline (assuming California levels are […]
Read more...Ambrose Evans-Pritchard has not given up on his deflationary views, which until recently were quite an outlier. But some recent data releases give support to his downbeat take. From the Telegraph: CPI inflation has dropped to –2.2pc in Japan (a modern record), -2.1pc in the US, -1.8pc in China, -1.4pc in Spain, -0.7pc in France, […]
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