Although this New York Times article gives a good overview of how the economic downturn is affecting legal practices, it does a bit of a disservice in implying that law is recession proof. Some types of law are highly cyclical: M&A, and to a lesser degree, securities law. While bankruptcies pick up in downtimes, they […]
Read more...We had pointed out that usage of oil had dropped over 10% during the first oil shock. While the price hike itself led directly to conservation, and this time we have an easing price environment, global economic conditions were not as difficult as today’s. From Bloomberg: Crude oil fell below $59 a barrel in New […]
Read more...A Wall Street Journal article, “Japan Worries It Faces the Return of Deflation,” contained an argument I found unconvincing: In the U.S., some economists say deflation may occur if market conditions deteriorate much further and job losses proliferate. But Teizo Taya, an adviser for Daiwa Institute of Research and a former policy board member of […]
Read more...We have gotten so large to throwing large numbers around in the US thanks to the various Fed facilities that the significance of the Chinese move may not be as obvious as it would otherwise be. $586 billion is a massive number for an economy the size of China’s. Recall our first stimulus package here […]
Read more...The dreary forecast comes from Eric Fishwick, chief economist at CLSA, an Asia-focused private equity firm. His reports in particular contends that the Chinese cannot possibly meet its growth projections for next year. One does not cross the officialdom in China casually. That suggests that either 1) CLSA is quite confident they won’t be making […]
Read more...As Dani Rodrik, who saw this item first, said, “Why do I think this is really bad news?” Remarkably, the article suggests that XIe might not attend the November 15 summit in Washington to discuss the future of the world financial order. This would be particularly noteworthy given China’s strong desire to push for a […]
Read more...The unusually dramatic headline comes from the New York Times. Note this drop was a not a surprise to some analysts such as Gary Shilling, who predicted a marked fall in retail sales, which when you allow for the fact that gas and food are not terribly discretionary, implies much greater declines in apparel and […]
Read more...Brad Setser and Nouriel Roubini have collaborated in research and publishing on currencies but since are working independently. Roubini issues a grim outlook for China (“Roubini Foresees Chinese Hard Landing“). A cornerstone of Roubini’s analysis was that China was export-dependent and exports are falling fast: Note that China is an economy is structurally dependent on […]
Read more...It looks like the perenially optimistic analyst community is finally getting the message that the recession will be nasty. From Bloomberg: Analysts are slicing profit forecasts for U.S. companies in the fourth quarter and 2009 as third- period results miss projections at the highest rate in almost 11 years. “Estimates have been coming down with […]
Read more...One thing I never understood was the assumption among some marketing mavens I know, that certain types of consumer expenditures were simply never going to be cut. Confidence was particularly high regarding how women spent money. “Oh, lipstick always does well in recessions, it’s a cheap pick-me-up.” “Women don’t cut back on hair color” (meaning […]
Read more...Edmund Phelps, a Nobel Prize winner, casts doubts on Keynesian remedies because Keynes himself came to question them. This Financial Times piece provides no answers but raises some interesting questions. But sadly, there may be no answer for the first question he asks: What theory can we use to get us out of the impending […]
Read more...For those living abroad, Small Business Administration sponsors a variety of loan programs that are administered through banks. Despite the name, SBA loans are typically used by the larger end of small businesses, one that might be on the cusp of getting a conventional bank loan or might qualify but find the pricing unattractive. The […]
Read more...A report in the Wall Street Journal today focuses on how even the affluent are reining in their spending, but what I found most intriguing was that the well-cultivated American habit of shopping as self validation appears to be undergoing a sea change. From the Wall Street Journal: The twin currents of an economic downturn […]
Read more...The Wall Street Journal provides yet another indicator of strained consumer budgets. More and more are having trouble paying their utility bills, precisely when the service providers are getting tougher about collections: Utilities are becoming more aggressive about collecting money from delinquent customers, leading to a surge in service shutdowns just as economic woes are […]
Read more...The consumer credit retrenchment is coming even faster and harder than many anticipated. Big box retailers look likely to get coal in their stockings for Christmas as reduced consumer credit limits cut directly into sales. From Bloomberg: Home Depot Inc., Sears Holdings Corp. and other retailers may lose as much as 8 percent of their […]
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