Economists Carmen Reinhart and Kenneth Rogoff have been publishing various findings from a large-scale data set they have constructed of past financial crises. They have looked back as far as 800 years, but not surprisingly, most of their output has consisted of analyses of modern crises (you can find some earlier discussions here and here). […]
Read more...Wolfgang Munchau has a good piece in todays’ Financial Times delineating his economic policy wish list for 2009. It has the merit of being to the point and pragmatic. His preamble contains some some striking tidbits. Munchau considers himself relatively optimistic about US housing, despite anticipating a 40 to 50% peak to trough decline, and […]
Read more...The run-up to Christmas sales levels in the US failed to meet low expectations. Now retailers are hoping for a wee bit of salvation in after-Christmas clearance. From Bloomberg: Cutbacks on clothing, electronics and jewelry led U.S. retail sales to drop as much as 4 percent this holiday season as consumers limited purchases to necessities, […]
Read more...Since I am endeavoring to spend some time with my family, forgive me for dispatching this New York Times story, “Dollar Shift: Chinese Pockets Filled as Americans’ Emptied.” The article buys, hook, line and sinker, then- Fed-governor Ben Bernanke’s depiction of so-called global imbalances (the US borrowing from abroad to fund overconsumption; Japan, China, Taiwan, […]
Read more...A not-so-bad Black Friday led retailers to hope that the Christmas selling season might not be as awful as feared. Unfortunately, sales appeared to have petered out in the typically busy last few selling days, in part due to rotten weather in the northern part of the country. From Bloomberg: U.S. retail store traffic fell […]
Read more...In part because the Japanese corporate bond market is no where near as deep and large as its US counterpart, Japanese rating agencies hold far less sway than Moody’s and Standard & Poor’s. Nevertheless, the idea that Japan should write down its vast holdings of Treasuries and support US infrastructure spending (albeit with a few […]
Read more...I am now wondering if Google censors posts (I use Blogger), I put this post up at 1:33 AM, and even had a reader e-mail me that the post had disappeared (with no listing in “Recent Posts” which happens if I put up a post and then remove it). I have a record that it […]
Read more...Price deflation isn’t necessarily a bad thing if it is short-lived and does not lead to downward pressure on wages. But falling wages produces a nasty spiral. Not only do consumers have less to spend, but worse, even if they keep their jobs, they can be legitimately worried about even lower pay packages down the […]
Read more...Despite a not-as-bad-as-feared Black Friday (the day after Thanksgiving), retail sales fell in November. Analysts expect the financial releases next week to show a continued contraction in consumer spending (a broader measure, including services, is due for release this week). And housing data is anticipated to be not-so-hot either. I don’t pretend to have any […]
Read more...Earlier today, George Bush made a surprisingly candid set of remarks, signaling a desire to avoid a disorderly collapse for the large US car manufacturers, and ambivalence about Chapter 11. The stock market started downward, and the trajectory accelerated with Standard & Poors putting GE’s ratings outlook at “negative,” meaning it is at risk of […]
Read more...There had been rumors that Treasury would unveil a rescue plan for the Big Three on Wednesday. The day came and went with no announcement. Tonight we learn, via the Wall Street Journal, that Cerberus has revived merger talks for Chrysler with GM. The possibility of a deal would seem to complicate vastly an attempt […]
Read more...The Fed made official its move to quantitative easing today, and said it will take no prisoners until it has lowered rates and credit spreads further: The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability… The focus of the Committee’s policy going forward […]
Read more...Last winter, we heard a story of a family in Vermont burning antique furniture to stay warm. Even before the economy turned decisively south, payment stress was high, and even if we have mild winter (this week is not an encouraging harbinger), more customers will fall behind. From the Wall Street Journal: One in five […]
Read more...The advocates of having GM and/or Chrysler file for Chapter 11 make their case often implicitly or explicit resting on certain assumptions. The fundamental notion is that Chapter 11 will produce less, or at least no more, economic damage than some combination of rescue funding and auto industry downsizing. Now we are willing to grant […]
Read more...Although talk of deep OPEC production cuts and hopes for an auto industry rescue have given oil prices a boost, the fundamentals are far from out of the woods. Indeed, as OPEC bravely claimed demand and supply really weren’t so far out of whack (was that at effort to set the stage for a less-than-hoped […]
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