Category Archives: Globalization

Pangloss Watch: Japan’s Industrial Production "Surges"

The Japanese have a wonderful expression that I will take some liberty in translating. They use it to signify when someone is trying to claim great distinctions among low levels of activity or achievement. The phrase is roughly “A height competition among peanuts.” Reader DoctoRx flagged this Bloomberg report as a Pangloss item. What is […]

Chinese Exports Fall Nearly 23% in April

So much for the green shoots theory, at least as far as an early Chinese recovery is concerned. From AFP (hat tip reader Michael): Chinese exports fell 22.6 percent in April from a year earlier in the sixth straight monthly decline, state media said Tuesday,… Exports from the world’s third-largest economy totalled 91.94 billion dollars […]

China Cuts Purchases of Treasuries and Foreign Bonds

We’ve mentioned earlier that it was inevitable that China would reduce its purchases of Treasuries, independent of its desire to diversify away from them. With trade falling (although China still has a high surplus) and hot money inflows reversing direction, China has less reason to buy foreign assets. From the New York Times: Reversing its […]

Willem Buiter: "Non-Negligible" Risk of Default by US and UK

Willem Buiter takes no prisoners, In his latest post, “The green shoots are weeds growing through the rubble in the ruins of the global economy”, he dispatches the idea that recovery is around the corner (citing Carmen Reinhart and Kenneth’s latest paper on the resolution of financial crises) and points out that the fiscal state […]

World Economy Falling Faster Than in 1929-1930

Barry Eichengreen, an expert on the Great Depression, and Kevin O’Rourke, take issue with the notion that the current downturn is less severe than the Great Depression. While the slump in the US is not as bad, that mis-states the global picture. Note that many economists expect the US to suffer less than the big […]

Are Competitive Devaluations Starting?

In a world of floating rates, driving the value of one’s currency down takes a bit of doing, but as China (since 1994) and Japan (circa 2003) have demonstrated, central banks can lower currency prices. And trashing one’s currency is part of the standard program recommended for countries facing deflation. The preferred method these days […]

Japan Exports Fall by Nearly Half in February

Note the dramatic fall in Japanese exports in February was relative to the year-ago level, but that does not make the outcome any less ugly. From Bloomberg: Overseas shipments fell 49.4 percent from a year earlier, the sharpest decline since at least 1980, when the government started to keep comparable data, the Finance Ministry said […]

China Trade Surplus Falls To 1/8 Prior Month Level

No details up yet on my cheapie version of Bloomberg, will update when more is in. Recall, however, that many analysts foresaw a fall in China’s surplus. It had stayed at near record levels despite falling volumes of trade overall because imports fell faster than exports. Well, many imports are used to produce exports. As […]

Hoisted From Comments: Is Europe Doing More to Combat Downturn Than Perceived?

Readers may have noticed that Team Obama has put on a pre-G-20 session push to have participants spend more to pull the global economy out of its nosedive. The New York Times gave a short summary: In recent days, the White House has begun signaling that when leaders of the Group of 20 nations meet […]

Wolfgang Munchau: Abandon All Hope…..

While Wolfgang Munchau’s latest comment for the Financial Times, “An L of a recession – reform is the way out,” fell short of being apocalyptic, it was the gloomiest piece I can recall coming from him. Munchau argues that the world is going into what is politely referred to as an L shaped recession, but […]

Former Australian Prime Minister Savages Geithner’s Performance in the Asian Crisis

Paul Keating, former Austrailian Prime Minister, gave an assessment of Timothy Geithners’ performance in the Asian crisis that is sharply at odds with US reports. According to Keating, Geither completely misread the nature of the crisis, that it was the result of hot money flight, but reverted to the standard IMF “country facing currency crisis” […]

Is China’s Wen Whistling in the Dark?

Reader Nivethan pointed to a Bloomberg story, “China Says 8% Growth Within Reach Using $585 Billion Stimulus.” This may be a tad more significant than it appears (I also looked at Xinhua, but got the singular, and probably completely unfair impression that Wen’s speech to the party Congress was of the “give everyone at least […]

Governments Step in to Provide Trade Finance

When trade started falling off in the later half of last year, this blog commented from time to time that the scarcity of trade finance, particularly letters of credit, was playing a meaningful role. That line of thinking was sometimes met with skepticism. Trade related funding has gotten even more scarce and costly, to the […]

Japan Exports Fall By 46% in January, Producing Record Trade Deficit

Japan has been hit by a double-whammy: the global fall in trade, made worse by its (formerly) rising yen. While deteriorating conditions in China generally get more media attention, the falloff in Japan is stunning and serious. Japan has spent more than a decade stagnant, but the overall growth figures mask the fact that the […]

Asian Container Traffic Tanked in January

So much for the theory that the rise in the Baltic Dry Index meant that trade volumes were recovering. From Lloyd’s List (hat tip reader Michael): Asian container ports are bracing themselves for a grim year ahead as they report alarming drops in volumes in January. Box throughput at Singapore, the world’s largest container port […]