We’ve been seeing an even higher than usual amount of skepticism on China’s official data releases, as if such a thing were even possible, given the general dim view of Chinese government data. Some observers, including yours truly, had looked to electrical usage as a better barometer of economic activity. Well, it turns out that […]
Read more...Submitted by Edward Harrison of Credit Writedowns If you recall, at the end of May, I wrote a post “Both initial claims and continuing claims now pointing to recovery” that said jobless claims data were pointing to an imminent recovery. The general gist of my argument was recovery would come by year’s end or early […]
Read more...It was mathematician Benoit Mandelbrot who first discovered in 1962, by crunching 100 years of cotton trading data, that markets have “fat tails” or more extreme risks than the standard models predict. A less oft cited finding of Mandelbrot’s was that markets have memory, in colloquial terms. Calm days tend to be followed by calm […]
Read more...Even though China keeps putting out cheery official numbers, its purchases of commodities are down, suggesting there is less to its stabilization than meets the eye. It’s early to say that this is conclusive, but there is a good bit of other anecdotal information and some firmer information raising questions about the true state of […]
Read more...Comstock Partners has a new newsletter out, and it makes a cogent case that there is no pretty way out of our over-leveraged mess. The disheartening bit is not only the narrative but a series of charts. One, on debt to GDP, show that it has risen in the last year (debt was roughly $49 […]
Read more...If you think US economic data leaves a lot to be desired, just remember that it looks stellar in comparison to what comes out of China. The latest China fun facts versus relentlessly upbeat official figures roundup comes with the help of reader Michael. First is that China has been reporting decent growth, with the […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Below is a post I penned earlier this week about double dip recessions. The Volcker Whip-inflation-now induced double dip in 1980-1982 is the best precedent for today. What could tip us into a secondary relapse? A lot of things: commodity prices, oil, higher interest rates, commercial real estate, […]
Read more...Gideon Rachman has a pretty gloomy piece in the Financial Times on the lousy state of affairs in the Baltics. Short story, like a lot of places, they went on a monster debt bender and now have an awful hangover. Rachman suggests that Baltic woes could blow back and hurt Europe’s recovery. The trigger would […]
Read more...Satyajit Das, of Traders, Guns & Money fame, is keeping tabs on what he calls GFC plot lines, or what one might also call The Search For The Guilty. The latest caught in the dragnet is…economists! But Das thinks some of the books still miss key issues. From Das: Just when I had finally worked […]
Read more...In a Financial Times comment. Michael Pettis gives a well-reasoned and glum forecast for Chinese growth, namely, that it is unlikely to exceed 5% to 7% over the next few years. The reason he sets forth is that China was able to show growth rates in excess of domestic consumption growth thanks to US exports. […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Down 1.5% was the consensus expectation. But Q1 was revised down to minus 6.4% from 5.5%. The GDP Deflator for Q2 came in at 0.2%, which shows that disinflation risks tipping into deflation still. The dollar is weaker and the short end of the treasury curve is up […]
Read more...A new dynamic appears to be emerging on the housing front. Heretofore, foreclosures were strongly correlated with where the mania had been most acute. California, Florida, and Arizona in particular showed dramatic declines in prices. But now as those markets have corrected to a considerable degree, foreclosure activity is now starting to be a function […]
Read more...We’ve been told that one of the reasons China is allegedly faring less badly than might be expected, given than big creditors tend to take it on the chin worse in global crises than debtors, who can simply default, is that its economy was actually more reliant on domestic capital spending than exports as a […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Citigroup has just released a forecast which is very troubling in regards to employment and growth in the Spanish economy. With unemployment already having hit 17.9%, Citigroup expects layoffs to increase this to 22% in 2010. Below is my translation of the Spanish-language article in Finanzas. The stabilization […]
Read more...Submitted by Edward Harrison of Credit Writedowns. I just read a CNBC story which fails to mention CNBC’s involvement in the apparently erroneous report that Nouriel Roubini has suddenly become more bullish. Is this omission justified? The controversy centers on statements Roubini made regarding the timing of a technical recovery in the United States. Yesterday, […]
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