It’s sad to watch America operate in the illusion that it can exercise much influence over the trajectory of its decline. Mind you, that slippage isn’t inevitable if we were willing to course correct and endure an unpleasant period of low to negative growth as we lowered consumption and increased savings. But since that program […]
Read more...Today’s Telegraph has a good piece, “Japan is the next sub-prime flashpoint,” by Ambrose Evans-Pritchard. And before I get to the piece, I want to say a few things about the author. A number of readers detest Evans-Pritchard, and I am at a loss to understand why. He wears his biggest fault on his sleeve, […]
Read more...The Chinese aren’t alone in their dim view of globalization. In fact, a BBC poll (hat tip Dani Rodrik) found that a higher proportion of Chinese are unhappy about the pace of globalization than Americans. One of the nations least pleased with the speed of integration is Australia, another big beneficiary via a commodities boom.
Read more...Willem Buiter continues his quixotic campaign to extirpate lousy economic logic in the US. In a colorfully written post, he ridicules the refusal of any US economist (as far as he can tell) to consider that an American recession is necessary. He points to the obvious fact (commented on repeatedly in this blog) that the […]
Read more...A comment by Kenneth Rogoff in the Financial Times argues that rapidly growing emerging markets exhibit periods of crisis, and China has a long list of possible causes. Yet policymakers, focused on slowing US growth and financial institution stress in the US and Europe, have overlooked the problem that a sudden slowdown in China could […]
Read more...Sunday’s Washington Post has a long article on Japan, “For Japan, a Long, Slow Slide,” that is truly odd. Mind you, on the surface, there is nothing wrong with it. It makes the usual observations: Japan’s population is aging, productivity is falling, the country is losing its economic standing. It give the impression that Japan […]
Read more...Brad Setser has been concerned of late about the implications of China’s (and other central banks) exchange losses on their large and ever-growing holdings of US Treasuries which they buy to fund our current account deficit. Setser, a keen watcher of official data, has also noted that private foreign demand for US securities has virtually […]
Read more...In a succinct and well argued Financial Times comment, Richard Duncan weighs in on the savings glut versus overspending (aka money glut) theories of global imbalances, and concludes it’s the spending, stupid. By way of background, let’s review the two competing notions of the causes of global imbalances, which is shorthand for “nice central banks […]
Read more...Another day, another sovereign investment fund check to an investment bank. How the mighty are fallen. The story in the Telegraph makes clear the proposed Qatar Investment Authority acquisition of 5% of Credit Suisse, worth roughly $3 billiion, is not a done deal but seems likely to go through. And the article goes to some […]
Read more...Since the market meltdown ’round the world is pre-empting a lot of other programming, I thought we’d turn to other important topics. A study looking over 40 years led by UC Berkeley researchers concluded that first world environmental degradation of third-world countries cost them more, in aggregate, than their foreign debt. Indeed, the researchers argue […]
Read more...Brad Setser and Tony Jackson both comment today on the seemingly inexorable rise of foreigner investors in the US, particularly to shore up foundering financial institutions. Setser’s piece is much broader and also synthesizes and comments on recent hand-wringing in the media, so it gets pride of place. However, Jackson’s observation about the maybe-not-so-hot prospects […]
Read more...Peter Dorman at Econospeak provides an awesome little post, “Nonsense on Imported Stilts,” that eviscerates some conventional and widely used assumptions in trade economics: Econ bloggers have really missed the point about Landsburg’s free trade screed. The estimable Dani notwithstanding, the issue isn’t ultimately ethics or even procedural fairness. The problem is that doctrinaire economists […]
Read more...Never ones to miss an opportunity to lose money, the top Japanese banks, finally having recovered from lending against wildly overvalued collateral, and then suffering nearly two decades of working out zombie loans (or more accurately, being insolvent but being allowed to operate anyhow, since reviving the crappy banking sector one has is easier than […]
Read more...The Wall Street Journal reports that Prince Al-Waleed, who salvaged Citi in the early 1990s (its stock was at $9 on its way to zero) is expected to pump equity into the bank again. Note there are some disparities between the Journal’s story and the one in the Financial Times. For example, the Journal says […]
Read more...There are three good and overlapping state of global finance pieces tonight; they all have worthy ideas and I’ll integrate them as best I can. The first is a post by Thomas Palley, “The Subprime – Trade Deficit Connection,” which is a companion piece to th Financial Times article by Stephen Roach yesterday. Roach depicted […]
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