Lousy economic conditions are leading many consumers to postpone car purchases. Lower levels of industry sales will increase the bleeding at GM and Chrysler. One factor I have not seen mentioned much in any of the bailout discussions is whether we might see a reversal of the long-term trend of an increasing number of cars […]
Read more...Note the wording Goldman used in describing the implications of the decline in income tax revenues in China, via Bloomberg (hat tip reader MIchael): “Tax data show much sharper deceleration in income and consumption in the past few months than suggested by official retail sales or income growth figures,” Goldman Sachs analysts Joshua Lu, Caroline […]
Read more...Japan has been hit by a double-whammy: the global fall in trade, made worse by its (formerly) rising yen. While deteriorating conditions in China generally get more media attention, the falloff in Japan is stunning and serious. Japan has spent more than a decade stagnant, but the overall growth figures mask the fact that the […]
Read more...In case you managed to miss it, Japan has taken a huge fall in its relative economic standing by more or less standing still for almost a generation. The comparative fall is 30%. And even though visitors to Japan do not see the superficial signs of distress (infrastructure is well maintained, people are neatly dressed, […]
Read more...Economy could begin to recover in April, claims Gordon Brown Telegraph. Subhead: “The economy could begin to recover as early as April 2, Gordon Brown has signaled.” If by “recover” one means “temporarily looks as if it is no longer getting worse,” even I might agree that is possible. From Merrill Lynch’s Fund Manager Survey […]
Read more...Ah, today the Financial Times reminds me of the way it was back in early 2007, when it was clearly heads and shoulders above any US paper. Wonder why I have fewer days like that, It isn’t improved reporting by the US media (although they are further down the curve). I suspect that the FT […]
Read more...As the economy weakens, big ticket items like cars are particularly hard hit. And GM’s offer of 0% financing, which lead to a brief flurry of buying, apparently wasn’t enough to offset the trend of broad-based consumer retrenchment. There is a bit of disparity in reporting. The Wall Street Journal tells us GM now says […]
Read more...Kansas is in the middle of a budget brawl, and tax refunds may be on hold if it isn’t resolved pronto. From the Kansas City Star: The Kansas Finance Council was to meet at 1 p.m. today to vote on whether to borrow $225 million from healthy state funds to cover expected payments to schools, […]
Read more...As much as some optimists would like to find evidence of recovery, it is far more likely that the US will see a further deterioration in economic activity. We have not yet seen much in the way of bankrupticies and debt restructuring. Until this sort of thing becomes sadly routine, the bottom is not yet […]
Read more...Japan has long had a two-tier economy: a robust export sector and a comatose domestic economy. With the yen at a high level and trade volumes generally falling, the export sector has gone spectacularly into reverse gear, taking overall growth with it. From Bloomberg: Japan’s economy shrank at an annual 12.7 percent pace last quarter, […]
Read more...I must confess to having read only a bit of economist Axel Leijonhufvud’s writings, but what I have seen, I have liked very much. Leijonhufvud’s current post at VoxEU does a very good job of looking at the economic mess the US is in and assesses policy options. It is a remarkably straightforward piece. Most […]
Read more...It is risky indeed for someone like me, on the other side of the world, commenting on a country with spotty economic data (a function of size and maturity of its information gathering apparatus, as well as possible intent to put lipstick on pigs) to take issue with an emerging consensus. Nevertheless, I will stick […]
Read more...The title of this Telegraph article may strike some US readers as alarmist, and since one of the two authors is Ambrose Evans-Pritchard, a card carrying member of the uber-bear club, it may be easy to dismiss it. But that would be a mistake. I was in Austria in December, meeting with some local businessmen, […]
Read more...I’m sure readers have noticed that talking about the global economic downturn as a depression is suddenly respectable. A mere three months, use of that term would have gotten one branded as a alarmist (even Nouriel Roubini, who has a taste for drama, often used the code of “L shaped recession”). As a result, economists […]
Read more...We’ve been of the view that despite its theoretical advantages, (enabling various liabilities and cliaiims to be restructured more easily) a bankruptcy filing for a big automaker would be likely to lead to liquidation. A pre-pack is impossible for companies of this scale; an article in the Deal laid out the process and contended that […]
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