Further signs that the Chinese economy is in the throes of a serious downturn. From Bloomberg: China’s exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the People’s Bank of China, said today. “Things are not so good,” Fan said at a forum in Beijing. “November figures will come out soon, […]
Read more...The Nikkei and Topix are marginally in positive territory as of this writing (the Nikkei up a bare five points) retracing earlier gains. The proximate cause appears to be a downbeat revised GDP report. Stocks initially appeared to shrug off the bad news, taking momentum from the Euro/US rally, but upon reflection, have (for the […]
Read more...Be careful what you wish for. Even a successful auto industry restructuring will involve substantial headcount cuts, deepening the recession underway. A Bloomberg story tallies the likely damage; While the loans may spare General Motors Corp., Ford Motor Co. and Chrysler LLC from collapse, shrinking their workforces would sap an already weak economy, said Paul […]
Read more...One thing I have found troubling is the near-unanimity in the US that we must Do Something about the burgeoning economic crisis, and that Something is big time monetary and fiscal stimulus. Near unanimity is almost never a good thing in the political and policy realm, since conditions and options are sufficiently complicated so as […]
Read more...One of the arguments made by bottom-fishers is that not only are stocks “oversold” (a technical notion that reflects recent trading activity, such as trading volumes, price in relationship to various moving day averages) but are also cheap based on fundamental notions of value. We have been somewhat leery of any long-term valuation notions given […]
Read more...A brief and grim interview with Paul Krugman on CNBC (hat tip reader Dwight). Some key points: The indicators are worse than any point during Japan’s contraction Spending is in free fall Unemployment could exceed 10%, meaningful employment recovery may not occur before 2011 Click here to view.
Read more...In the early days of this blog, I’d regularly compare the Wall Street Journal’s reporting of a news story with that of the Financial Times, because in the vast majority of cases, the Journal had either gotten it badly wrong or was putting a very positive spin on a less obviously cheery fact set. That […]
Read more...Even though the markets took cheer from China’s rate cut today, the move appears to be in response to an intensification of its economic woes. From Bloomberg: Some economic indicators in China showed a “faster decline” in November, the nation’s top economic planner said, underlining the urgency of government measures to support growth and employment. […]
Read more...Although the press has started paying attention to the slowdown in growth in China, the focus has mainly been on Pearl River area, which is light manufacturing, primarily textiles, low capital intensity. But as the New York Times reports, the contraction is also hitting sectors where China has made substantial capital investment. The reason this […]
Read more...Even with strong signs that global economic weakness will persist through 2009, investors in energy share hope for an oil price rebound sooner rather than later, and energy stocks staged an even bigger move than the overall market in the last two rallies But the fixation on oil tends to obscure the prospects for the […]
Read more...In case you are starting to look to past crises for clues as to how our financial mess might play out, here is a Great Depression factoid. From Levy Forecast, November 2008 (hat tip reader Scott, no online source): Note that the report itself argues that the US will have a “contained” depression, with deep […]
Read more...Comparisons to the Great Depression and to other nasty past downturns (Panic of 1873, anyone?) are coming fast and furious these days. But one thing that continues to surprise me is the frequency with which the US in 2007-2008 is being compared to the US of 1929-1930. I’ve mentioned in passing that China is in […]
Read more...Let us start with the basics. Like it or not, for GM to go under risks a disaster of colossal proportions. Although Lehman, the biggest bankruptcy in US history, appeared to have an orderly settlement of its credit defaults swaps, the disruption occurred before-hand, as protection writers had to post additional collateral PRIOR to settlement. […]
Read more...This story from the BBC covers largely familiar ground as far as the deterioration of the Chinese economy is concerned, but in contrast to some other articles featured here, stresses the political implications of lower growth. Note that while many in passing observe that lower economic growth could be destabilizing for China, it also appears […]
Read more...One theory I derided earlier was the notion that that there are certain expenditures that do not get cut even when budgets are strained. The subject of my mini-rant last time was the idea that women would not cut back on going to their hair colorist. If people are cutting back on their medications, which […]
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