Perhaps it’s merely the result of drafting in a bit more haste than usual, but the latest offering by Nouriel Roubini, “The delusional complacency that the “worst is behind us” is rapidly melting away…and the risk of another run against systemically important broker dealers,” is unusually heated in tone, to the point where it distracts […]
Read more...Some readers have suggested increasing tariffs as a way to reduce our trade deficit and shield US workers from foreign competition. High energy prices may be having the same effect. Increased transportation costs are leading companies to rethink how they source their products and shift to local producers where possible. A Financial Times story discusses […]
Read more...Economic Policy Institute discusses a troubling pattern. Historically, when the economy went south, a larger proportion of workers retired early. It isn’t clear whether they were offered packages, were sacked, or left for other reasons (say their job was redefined and they no longer enjoyed it), but the point is they left the workforce. Now […]
Read more...More signs of high gas prices leading to reduced demand. The Bloomberg article is written somewhat unclearly. The 2.7% fall in retail gas purchases is in comparison to the prior year.. From Bloomberg: U.S. gasoline demand fell 2.7 percent last week, a sign motorists are cutting back on vacation plans as pump prices touchrecords, a […]
Read more...The cold water Yankee crowd is not going to like the latest word from the IMF, which sees the US economy at close to a stall level on growth for the next six months. It believes that diminished demand will alleviate inflationary pressures and endorsed the idea of standing pat on interest rates for now. […]
Read more...In a VoxEU post, Guillermo Calvo argues forcefully that rising commodity prices are the result of excess liquidity rather than supply and demand. From VoxEU: Here, one of the world’s leading macroeconomists argues that the explosion of commodity prices is the result of a very real global financial storm associated with excess liquidity in several […]
Read more...Ah, just when you thought it might be safe to venture into the markets again, RBS sends out a red alert, warning private clients to prepare themselves for a full fledged rout in equities and bond markets in the next three months, with the S&P losing 300 points, or nearly a quarter of its value, […]
Read more...How little resolve our central bank has. We said we thought Fed was unlikely to raise rates, or if it did, it would be at most 25 basis points between now and year end., which falls in the category of being cosmetic. The central bank has been particularly, one might say unduly, attentive to the […]
Read more...It’s one thing to read an apocalyptic alarm from, say, a blogger or a newsletter writer. It’s quite another to see it coming from an analyst at a large institution, in this case AIG. Bernard Connolly is deeply critical of central banks, not just of their recent actions but also of their very existence, and […]
Read more...A solid column from Bloomberg’s Caroline Baum on what she sees as the market’s irrational expectations for the Fed. Key points: Investors focused on Bernanke’s remarks about inflation and the dollar, when he also stressed the less than robust growth outlook The last time the central banks said it saw inflationary risks predominating it wound […]
Read more...The Financial Times’ John Authers, who called a market turn in bonds in early June of last year, sees another major shift in sentiment on the outlook for inflation and the dollar: For months, through all the volatility of the credit crisis, one bet has been enough to make profits. It is very simple: bet […]
Read more...As much as I respect and am in agreement with Nouriel Roubini’s views, he often, no doubt unintentionally, comes off as unduly enthusiastic about the prospect of carnage. His last offering goes through the litany of bad news that hit Friday: the rise in unemployment, the rise in oil (stoked in part by fear that […]
Read more...I’ve been quite taken with Thomas Palley’s few but very high quality posts, particularly since they have often made bold, persuasive arguments. Today, however, he does himself a disservice by giving a well written but conventional (among US academic economists) defense of the central bank’s conduct. Note that he deals only with monetary policy (he […]
Read more...An article in today’s Wall Street Journal, “Insider Joins Critics of the Fed, Faulting Credit-Crisis Programs,” discusses at some length a recent speech by Richmond Fed president Jeffrey Lacker in which he took issue with some of the Fed’s recent financial services industry rescue efforts. The article itself failed to do justice to his speech, […]
Read more...A reader forwarded me a Morgan Stanley fixed income research report wrap, which included a discussion of the role of gasoline and oil price subsidies in certain developing countries. The price gives an good overview of the role these defacto consumer price discounts have played, and argues that they will have to be cut back […]
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