The financial services industry is full cry in its demands for taxpayers to save its hide. From Bloomberg: Bill Gross, co-chief investment officer of Pacific Investment Management Co., said the U.S. may slump into a “mini depression” unless policy makers spend trillions of dollars to spur growth. “This economy needs support from the government, a […]
Read more...Oof, that key phrase in Martin Wolf’s column in the Financial Times, “Why Davos Man is waiting for Obama to save him,” is only slightly more cheery than, “Abandon all hope, ye who enter here.” Wolf gives a quick recap of Davos, recent international economic forecasts and market developments, which is worth reading, and then […]
Read more...Before we get to the substance of this post, I feel compelled to address the responses I have increasingly been getting when I post on unemployment in China, particularly demonstrations by workers (who often show up to work, find the factory shuttered and themselves stiffed for their last paycheck) and the fact that many of […]
Read more...To be fair, Willem Buiter’s latest post strives for a bit of gallows humor via its title, “YES WE CAN!! have a global depression if we really continue to work at it…,” before getting down to serious business, namely, that the powers that be risk missing the opportunity to salvage the global economy. What makes […]
Read more...Wish I’d written it. From Jesse: We believe that the stimulus is too backend loaded and unimaginative to affect anything sooner. Adding liquidity to the banks is as useful as filling the tank of a car wrapped around a telephone pole. Who are the banks going to lend to? And increased spending on health care, […]
Read more...I am the first to say that I do not understand the whims of the market, but today we saw a pretty schizophrenic display. Attention in the US focused on the Fed’s Open Market Committee statement. Earlier this week, not much was expected, since the Fed is somewhat constrained by fact that the Obama team […]
Read more...The forecast for a global international contraction by the Institute of International Finance is significant because it is the first to project negative growth for 2009. That may seem unexceptional to some readers. However, the IMF is forecasting growth of 1.5% for 2009, which it actually sees as a serious recessionary level. Why? Emerging economies […]
Read more...If you believe the China fourth quarter GDP release, I have a bridge I’d like to sell you. Some analysts see power consumption as a more accurate proxy of economic activity than GDP releases. Consider then the following report from Bloomberg on January 12: Power consumption fell 4 percent in October from a year earlier, […]
Read more...Just do the math. From the Las Vegas Review-Journal (via Calculated Risk and reader Dwight): David Crowe of the National Association of Home Builders said he was quite negative in his housing and economic outlook last year, but not negative enough…. The S&P/Case-Shiller Home Price Index fell 25.3 percent from March 2006 to October 2008. […]
Read more...Color me suspicious (as if that would be news to readers). Fiat and Chrysler have been talking about a deal that by all appearance might get the US automaker off government life support. That is probably a good idea, because if push were to come to shove, Chrysler would be the number one candidate to […]
Read more...When the Federal Reserve went “all in” as wags liked to put it on December 17, with its declaration that it would use “all available tools” to fight looming deflation. The bond and currency markets both took note, with the dollar falling sharply before rebounding and mortgage interest rates falling (nicely done, to get much […]
Read more...Further confirmation of deteriorating economic conditions in China come via its latest employment release. Note that China’s unemployment rate is its “urban” rate, which does not include migrant workers, so real unemployment is certain to be higher. In addition, the level officially projected for 2009 would put it at a 30 year high. That means […]
Read more...We have said from time to time that we had expected growth in China to be lower than mainstream forecasts. Although China is not as export dependent as widely believed, it had been enjoying not only a trade boom, but also a commercial real estate bubble. With two engines of growth in stall, China seems […]
Read more...One of the problems with trying to gauge foreclosure activity is that the data is pretty poor. We discussed this problem last year in “Foreclosure Stats: Pick a Number, Any Number“: We’ve noted more than once that quite a few government statistics near and dear to analysts and investors, such as GDP, inflation, and employment […]
Read more...I know I sometimes go for hyperbole in headlines, but the statement above is accurate. Your humble blogger had expected China (and presumably the rest of Asian) trade to fall in January and February from already depressed levels. While the drop in Chinese exports for December was less than experts expected (imports fell more sharply […]
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