I am overdue on a write-up of a great panel discussion hosted by the folks at RGE Monitor (Nouriel Roubini’s blog/news service). It was all fundamentally oriented, so with the coming holiday weekend and lack of new news, you will not be any worse off for my delay (although I am annoyed that I haven’t […]
Read more...Just as we pointed out yesterday that different markets had differing implicit forecasts of inflation, not surprisingly, so too do analysts. What makes the outlook for inflation a legitimately a difficult call is not merely weighing the inflationary and deflationary factors, but also considering how the various actors might respond. The focus has been on […]
Read more...The warning from the ECB’s chief Jean-Claude Trichet. that the worst of the credit crunch may lie ahead, deserves to be taken far more seriously than other cautionary warnings. First, he has a reasonably good reading on what is happening with European banks (and our sources with inside connections have maintained for some time that […]
Read more...Perhaps I suffer from knowing a bit too much about the financial services industry in general and credit cards in particular due to my consulting work, but I’m amazed at the eagerness of investors to go bottom fishing there. Granted, card players like Discover weren’t making subprime loans, but with prospects for the economy at […]
Read more...The stock market is up so far today on mixed readings of the tea leaves. The Conference Board’s index of leading indicators rose unexpectedly, which elicited some positive reports, but Reuters was not impressed, noting that the 0.1% rise showed weakness but not a formal recession. The Wall Street Journal attributed the rise to analyst […]
Read more...Conventional wisdom is that markets are the best place to get unbiased forecasts, but we see a sharp divergence of views between what TIPS buyers and Treasury traders in general anticipate inflation rates will be versus consumer expectations and the continued high inflows of new funds into commodities. We’ve seen this sort of divergence before. […]
Read more...Willem Buiter argues that the focus on oil and food price shocks, which economists view as relative price changes rather than inflation, is muddying the discussion about inflation. He sees considerable evidence of widespread inflation and it’s central bankers’ fault. From Buiter: Inflation is rising just about everywhere. Why is this and what can be […]
Read more...One of the views widely bandied about is that a weak dollar helps exports, which means primarily manufacturing. Narrowly speaking, thats’ true, but in some respects there is less there than meets the eye. One element we have mentioned is that there are limits near term to how much the US can gain, in terms […]
Read more...I am leery of featuring one writer too often in succession (Martin Wolf is a notworthy exception). However, Ambrose Evans-Pritchard presents a thesis that I thought would lead to some informative reader comments. In “The crisis rotates from America to Europe, and Asia,” Evans-Prichard argues that many of the world’s other large economies will start […]
Read more...A disheartening post from the Economic Policy Institute on the employment outlook for the class of 2008. This weak market, which appears unlikely to improve much for the 2009 cohort, raises troubling issues. Much of the sense of disillusionment in America is coming from the fact that elements of our collective social beliefs are being […]
Read more...It’s one thing when journalists and analysts offer worrisome forecasts about the markets, quite another when someone with good inside knowledge sounds an alarm. Satyajit Das, an expert in derivatives and risk management, best known as the author of Traders, Guns & Money, looks over the financial landscape and does not like what he sees. […]
Read more...A very good (as usual) post by Jeff Frankel takes issue with Council of Economic Advisers chair Ed Lazear’s assertion that the economy is not in recession: It is true that the Commerce Department BEA’s advanced estimate of first-quarter GDP growth was still above zero (+0.6%). But there are three reasons not to take this […]
Read more...Uber-bear Ambrose Evans-Pritchard waxes apocalyptic this week, after finding that Standard & Poors issued a report that was even more pessimistic than he is. From the Telegraph: The avalanche of bankruptcies has begun. Six US companies of substance have defaulted on bonds over the past fortnight, against 17 for the whole of last year. As […]
Read more...What would we do without Brad Setser to give us a hard, analytical look at trade and international funds flows? Setser tells us that the headline news on the trade deficit, namely, that it shrank in March, is misleading. When you dig deeper, and in particular pull out petroleum-related flows, it reveals that real export […]
Read more...In Project Syndicate (hat tip Mark Thoma), Joseph Stiglitz takes on an increasingly common approach among central banks, namely, to announce a formal target for inflation and use interest rate policy to attempt to achieve it. Note the US does not use this approach, although one of the Fed’s responsibilities is to maintain price stability. […]
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