The Financial Times reports that the freeze on depositor withdrawals at Russian bank Globex is leading to high levels of withdrawals at other Russian banks, which doesn’t qualify as being a run…..yet. From the Financial Times (hat tip reader Michael): Globex on Wednesday banned depositors from withdrawing their money as confidence in the Russian banking […]
Read more...Griping Online? Comcast Hears You and Talks Back New York Times Economists’ new research shows positive effects of minimum-wage increases PhysOrg A Turkish theater for World War III Chan Akyam, Asia Times. I have no idea how likely the author’s scenario is, but the piece does suggest, if nothing else, that Turkey is going to […]
Read more...Bond maven Bill Gross has raised his estimate of losses from the credit crunch to $1 trillion. One has to note that his firm is a large holder of Freddie and Fannie debt and he issued this pronouncement the day after the GSE rescue bill passed the House and looks certain to become law. Note […]
Read more...We’ve cribbed the title of a provocative post by Satyajit Das at Eurointelligence. He argues that the US’s days of continuing to borrow abroad with little worry as to the consequences may be nearing an end. A good companion piece is Menzie Chinn’s Implications of adjustment to riskier dollar assets in a portfolio balance framework, […]
Read more...As he is often wont to do, Ambrose Evans-Pritchard worries, in dire terms, about the poor prospects for growth and stability, It would be easy to dismiss him as histrionic were it not for the fact that some commentators who have been right so far about the progress of the credit crunch, are also hyperventilating. […]
Read more...Before you break out the champagne on the news that international investors like the US (or more accurately, hate its stocks less than those of other nations), the article does not address the weighting of equities relative to other asset classes (ie, total allocations could still be down due to shifting more capital to commodities, […]
Read more...Ambrose Evans-Pritchard appears to be trying to corner the market in apocalyptic financial news. But his sources aren’t evangelicals, survivalists, or even goldbugs. The experts he cites are with respected financial firms, meaning they don’t sound alarms casually. Even more significant, the terms they are using to describe what might be coming are uncharacteristically dire. […]
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...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 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...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 […]
Read more...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 […]
Read more...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 […]
Read more...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 […]
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