We’ve said that if oil prices don’t retreat significantly before year end, airlines will be asking for bailiouts. One travel agent who is a wholesaler tells me that premium seats (business and first class) are seriously undersold. That’s a major blow in combination with skyrocketing fuel costs. From Reuters (hat tip reader Saboor): There will […]
Read more...Ambrose Evans-Pritchard in “Monetarists warn of crunch across Atlantic economies” in the Telegraph points to a troubling development: a fall over last few months in M1 and M2 in the US, UK and EU. Many have criticized the Fed for “printing money” of late. But the evidence suggests otherwise. First, all of the cash injections […]
Read more...Blomberg columnist William Pesek plays out a line of thought that may have occurred to some readers: what if the resolution of the credit crisis and global imbalances isn’t a nasty recession or punishing inflation but Japan-like protracted low growth, with stagnant to deteriorating living standards? This idea may not be as much of a […]
Read more...Since I seldom am the bearer of upbeat news, I thought I’d pass along the cheery forecast from market strategists at Lehman and Deutsche Bank, namely, that the Standard & Poor’s 500 index will have its best six months since the second half on 1982 in the second half of 2008. I happen to remember […]
Read more...Wolfgang Munchau, in his latest Financial Times comment, “Recession is not the worst possible outcome” takes up a theme near and dear to our and many readers hearts: that policies to avoid recessions do more damage in the long run than letting slumps run their course. Munchau is hard on economists, but not the purely […]
Read more...The headline above, which comes from an article in the Telegraph by Ambrose Evans-Pritchard, might benefit from a better image. “Blowing up” doesn’t seem the right image to describe an economy at risk of a sudden drop in growth. But something more fitting, like engines going into stall, might have taken too much space. Aside […]
Read more...Readers have taken to throwing brickbats when I post material that suggests that raising interest rates (at least in advanced economies) might not be a good move right now. We’ve said before that the reason the Fed kept rates too low too long was it looked at inflation as strictly a domestic phenomenon and ignored […]
Read more...The report Tuesday of worsening conditions in the auto market has led to a deepening of gloom on the employment front. Many private sector forecasters now expect workplace conditions to weaken well into 2009. In fact, these forecast might prove to be optimistic. Housing will probably not bottom before 2010 at the earliest, and given […]
Read more...The greybeards are not only chastened by the state of the economy, but as the example of Eli Broad illustrates, they are speaking up about it. That’s telling, because there is an unspoken rule in American business to stay upbeat, lest you unnecessarily scare investors and consumers who supposedly aren’t sophisticated enough to handle bad […]
Read more...The newly-released annual report of the Bank of International Settlements sounds as if it is unusually lively reading. Most official documents strive for an anodyne tone, while this one appears to be unusually blunt. However, while some reporters have their hands on it, the report is not yet up on the BIS website, so those […]
Read more...Consumer sentiment in the UK is pretty much on the same low footing as in the US. Our consumer sentiment hit the lowest level since May 1980. But the UK housing recession started after ours. Does that mean the Brits face up to reality faster than we do, or could their economy be on a […]
Read more...Larry Summer’s latest comment at the Financial Times, “What we can do in this dangerous moment.” is troubling both for its analysis of our economic mess and its remedies. Start with his first paragraph: It is quite possible that we are now at the most dangerous moment since the American financial crisis began last August. […]
Read more...Although it’s probably obvious to readers of this blog that the economy is going to become a bigger and bigger issue as the election approaches, campaign strategies often are not as responsive to changes on the ground as one might imagine. Perhaps the most stunning example was a comment in the Financial Times on Friday […]
Read more...A story in the UK’s Times give a recap of the gloomy forecasts for the US and world economy, including a particularly cheery prediction by a SocGen strategies that foresees that the Dow will drop to 4500 and the S&P 500 to 500. Not included in this forecast is a grim warning from Barclays and […]
Read more...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 […]
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