Category Archives: Russia

Will Japan’s Lost Decade Become the Norm?

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 […]

Are Trichet’s Rate Hikes 1930 All Over Again?

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 […]

BIS Warns of Deepening Contraction (Not for the Fainthearted)

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 […]

Another Food Supply Worry: Peak Phosphorus?

Some optimists on the agriculture front, such as Nobel prize winning economist Gary Becker, have argued that increasing the productivity of farming would solve the problem of skyrocketing grain and food commodity prices. Only roughly 30% of crop-raising is done according to advanced techniques; if much of the rest of the land under cultivation was […]

Did the Iraq War Cause High Oil Prices?

An oil economics specialist, Mamdouh Salameh, who advises the World Bank and the UN Industrial Development Organisation, contends that oil prices would be at less than 1/3 of their current level had the US not invaded iraq. We’ve noted before that Iraqi reserves somehow gets overlooked, which is odd. Iraq’s production has fallen further than […]

Russia’s President Deems Environmental Problems a Security Threat

PhysOrg reports that Russian president Dmitry Medvedev said that pollution could make certain parts of the country uninhabitable, possibly as soon as a decade from now. As much as China’s horrific pollution gets occasional attention in the West, Russia’s environmental woes win less scrutiny. Yet a seven-year study published in 2006 found that three of […]

Mohamed El-Erian’s Odd Piece on Global Imbalances

Full disclosure: I’m normally a fan of Mohamed El-Erian, former head of Harvard Management, now co-president of bond giant Pimco. But his current comment in the Financial Times, “How best to manage global imbalances,” struck me as more than a tad disingenuous. Let’s go through the article: Whatever happened to the debate on global payments […]

Oil Runup Exceeds Dot-Com Bubble

Faithful readers, I hope you don’t mind if I am less chatty than usual today, since I had some competing obligations, plus some of the material on offer stands on its own. In the “pets.com redux” category, a reader pointed out this Wall Street Journal story: Excitement over oil is surging in Brazil…. After creating […]

Traders Versus Roubini on Inflation, Dollar

The Financial Times’ John Authers, who called a market turn in bonds in early June of last year, sees another major shift in sentiment on the outlook for inflation and the dollar: For months, through all the volatility of the credit crisis, one bet has been enough to make profits. It is very simple: bet […]

Japan: Fundamentals Warrant Oil Only at $60 a Barrel

Forgive me if you’ve heard this one before, but a classic Wall Street joke illustrates an important concept. On a slow day in the markets, trader A decided to open bidding on a can of sardines. He offered it at $1. It was snapped up by B at $2, who sold it to C at […]

Has the Fed Painted Itself in a Corner?

Without a doubt, the Federal Reserve now faces the most difficult financial and economic climate in our collective memory. And it is increasingly apparent that its options are constrained. Although it is premature to arrive at definitive judgments, it’s nevertheless worth asking whether some of these limitations were unwittingly self-created. Friday’s market rout, triggered by […]

International Energy Agency Calls for Much Higher Carbon Prices

The International Energy Agency has determined that for greenhouse gas emissions to be reduced to the level recommended by the Intergovernmental Panel on Climate Change (and some contend that report was too conservative), carbon prices would need to be $200 a ton, more than four time the price now in effect for the EU carbon […]

Negative Real Interest Rates ‘Round the World Bode Ill for Inflation

While some writers in the US have taken note of the fact that the Fed’s rate cuts have propelled the US into negative real interest rate territory, until recently, the role of overly-permissive monetary policy in inflation-fraught countries like China and the Gulf States has gotten comparatively little attention. Last week, the Economist devoted an […]

High Euro Leading to Fall in Long-Term Investment

Policymakers in Europe have been worried about the appreciation of the euro, which makes local goods less competitive in international markets. Another cost of the currency’s strength is that foreign direct investment has plummeted, as producers shift funds to nations that now have a cost advantage. From the Telegraph: Long-term private investors are pulling their […]