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 […]
Read more...Asian markets are keying off the ugly day in the US, with deflation fears at the fore and equity markets having broken through the lows of last month, which had been widely touted as support levels. The Nikkei is down 570 points, or nearly 7%.. The Hang Seng is down 5.5%. Mainland Chinese indexes are […]
Read more...We have been mystified at the utter silence on behalf of our friendly foreign funding sources at their willingness to be patsies to continue buying Treasuries when the outlook for the dollar is far from rosy. The US’s funding needs are going to escalate sharply due to the need to pay for rescue programs. And […]
Read more...Financial Times columnist Lucy Kellaway once wrote, “No management idea is too ridiculous not to be tried in practice.” That observation may apply to economic ideas as well. Just last week, when discussing economic stimulus programs, I stressed that to be effective, they needed to lead to consumption. If, as with the tax rebates of […]
Read more...It’s always a bit dangerous to generalize from one data point, even if if it is a big data point, like Long Beach, one of America’s most active commercial ports. Nevertheless, the New York Times uses it to present a vivid image of the economic, and in particular, trade slowdown. One focus is how imported […]
Read more...Some observers of the fall in US consumer spending have noted that despite the overall contraction, some merchants, such as Wal-Mart, are reporting solid sales gains. They infer that buyers are still spending, but have downtraded radically so as to reduce their total expenditures. While one needs to take care in generalizing from the US […]
Read more...It’s the collateral damage… think of all those innocents who had nothing to do with GM’s recidivist mismanagement who will nevertheless be hurt This probably will not go down as a classic (say, the Apple 1984 commercial or the “Harry and Louise” campaign that helped torpedo the Clinton health care plan). And there is a […]
Read more...I have not made a formal tally of Roubini’s various lists of why the economy is going (and will continue to go) to hell in a handbasket, but recent sightings suggest his typical list is eight to twelve reasons. However, in his latest missive, on the subject of why the consumer is toast, Roubini outdoes […]
Read more...Yet more evidence that consumers are hurting. From the Wall Street Journal: U.S. retail sales took a record dive in October as consumers afraid for their jobs continued a retreat heading into the holiday shopping season and cut back spending on a wide variety of goods ranging from cars to furniture to electronics. Separately, U.S. […]
Read more...This front page New York Times story on factory closings in the Pearl River delta covers ground already discussed in some detail on this blog. However, its report gives more detail on the resulting labor unrest. From the New York Times: For decades, the steamy Pearl River Delta area of southern Guangdong Province served as […]
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