Kansas is in the middle of a budget brawl, and tax refunds may be on hold if it isn’t resolved pronto. From the Kansas City Star: The Kansas Finance Council was to meet at 1 p.m. today to vote on whether to borrow $225 million from healthy state funds to cover expected payments to schools, […]
Read more...As much as some optimists would like to find evidence of recovery, it is far more likely that the US will see a further deterioration in economic activity. We have not yet seen much in the way of bankrupticies and debt restructuring. Until this sort of thing becomes sadly routine, the bottom is not yet […]
Read more...Japan has long had a two-tier economy: a robust export sector and a comatose domestic economy. With the yen at a high level and trade volumes generally falling, the export sector has gone spectacularly into reverse gear, taking overall growth with it. From Bloomberg: Japan’s economy shrank at an annual 12.7 percent pace last quarter, […]
Read more...I must confess to having read only a bit of economist Axel Leijonhufvud’s writings, but what I have seen, I have liked very much. Leijonhufvud’s current post at VoxEU does a very good job of looking at the economic mess the US is in and assesses policy options. It is a remarkably straightforward piece. Most […]
Read more...It is risky indeed for someone like me, on the other side of the world, commenting on a country with spotty economic data (a function of size and maturity of its information gathering apparatus, as well as possible intent to put lipstick on pigs) to take issue with an emerging consensus. Nevertheless, I will stick […]
Read more...The title of this Telegraph article may strike some US readers as alarmist, and since one of the two authors is Ambrose Evans-Pritchard, a card carrying member of the uber-bear club, it may be easy to dismiss it. But that would be a mistake. I was in Austria in December, meeting with some local businessmen, […]
Read more...I’m sure readers have noticed that talking about the global economic downturn as a depression is suddenly respectable. A mere three months, use of that term would have gotten one branded as a alarmist (even Nouriel Roubini, who has a taste for drama, often used the code of “L shaped recession”). As a result, economists […]
Read more...We’ve been of the view that despite its theoretical advantages, (enabling various liabilities and cliaiims to be restructured more easily) a bankruptcy filing for a big automaker would be likely to lead to liquidation. A pre-pack is impossible for companies of this scale; an article in the Deal laid out the process and contended that […]
Read more...Even a casual market observer like your humble blogger has noticed the dramatic increase in Treasury bond yields from 2.5% on the 30 year bond to over 3.5% in a bit more than a month. I had assumed that the Fed, at its last FOMC meeting, would shed a bit of light on its December […]
Read more...When I was in high school, an enterprising friend regularly gave blood to earn some extra cash (he also had a part-time job, so this wasn’t his only strategy). The economy in 1974 was in a bad recession, but even so, my buddy remarked that the paid blood donors were skewed heavily towards chronic alcoholics […]
Read more...Kenneth Rogoff, writing for Project Syndicate, argues that if China’s stimulus succeeds, it will do so at the expense of intermediate-term growth. He echoes the widely-held view that China needs to move towards a paradigm that gives more weight to domestic consumption. The problem is, however, that a transition will be awkward and is likely […]
Read more...This blog was early to draw a comparison between the US financial crisis and emerging markets crises. As we wrote in March 2008: Although the Journal does not draw this comparison, the US is in very much the same boat as Thailand and Indonesia in 1997, during the emerging markets crisis. And although the US […]
Read more...The financial services industry is full cry in its demands for taxpayers to save its hide. From Bloomberg: Bill Gross, co-chief investment officer of Pacific Investment Management Co., said the U.S. may slump into a “mini depression” unless policy makers spend trillions of dollars to spur growth. “This economy needs support from the government, a […]
Read more...Oof, that key phrase in Martin Wolf’s column in the Financial Times, “Why Davos Man is waiting for Obama to save him,” is only slightly more cheery than, “Abandon all hope, ye who enter here.” Wolf gives a quick recap of Davos, recent international economic forecasts and market developments, which is worth reading, and then […]
Read more...Before we get to the substance of this post, I feel compelled to address the responses I have increasingly been getting when I post on unemployment in China, particularly demonstrations by workers (who often show up to work, find the factory shuttered and themselves stiffed for their last paycheck) and the fact that many of […]
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