Even a casual market observer like your humble blogger has noticed the dramatic increase in Treasury bond yields from 2.5% on the 30 year bond to over 3.5% in a bit more than a month. I had assumed that the Fed, at its last FOMC meeting, would shed a bit of light on its December […]
Read more...When I was in high school, an enterprising friend regularly gave blood to earn some extra cash (he also had a part-time job, so this wasn’t his only strategy). The economy in 1974 was in a bad recession, but even so, my buddy remarked that the paid blood donors were skewed heavily towards chronic alcoholics […]
Read more...Kenneth Rogoff, writing for Project Syndicate, argues that if China’s stimulus succeeds, it will do so at the expense of intermediate-term growth. He echoes the widely-held view that China needs to move towards a paradigm that gives more weight to domestic consumption. The problem is, however, that a transition will be awkward and is likely […]
Read more...This blog was early to draw a comparison between the US financial crisis and emerging markets crises. As we wrote in March 2008: Although the Journal does not draw this comparison, the US is in very much the same boat as Thailand and Indonesia in 1997, during the emerging markets crisis. And although the US […]
Read more...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 […]
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