RGE Monitor – Weekly Roundup
Check out all the great contributions that were published during the past week on RGE’s Nouriel Roubini’s Global EconoMonitor, RGE Analyst’s EconoMonitor, Finance & Markets Monitor, Peterson Institute for International Economics Monitor, Global Macro EconoMonitor, U.S. EconoMonitor, Emerging Markets Monitor, Asia EconoMonitor, Latin America EconoMonitor and Europe EconoMonitor.
On Nouriel Roubini’s Global EconoMonitor, RGE’s Prajakta Bhide and Christian Menegatti provide an assessment of the current condition of the U.S. housing sector and forecast home price dynamics for each of the 10 cities of the S&P/Case-Shiller C-10 index. They also provide nationwide price forecasts. They conclude that some of the improvements registered on the demand side in the recent months might be of a temporary nature and that home prices might fall further in the months ahead. Don’t miss Forecasting Home Prices in the U.S.
On the RGE Analyst’s EconoMonitor, Adam Wolfe and Rachel Ziemba look at changes in China’s recent bank lending data, which is providing support to the housing market and ask, “Is Fine-Tuning Prompting Too Much of a Property Boom?”
In The People’s Republic Turns 60: A New Era for China? Adam Wolfe examines China’s domestic politics and its place in the global economy. He argues that after the anniversary celebration, China will need to reassess its growth model.
In For Obama’s Diplomacy, the Going Gets Tough, Michael Moran considers some of the major diplomatic and military endeavors that face President Obama, whose success or failure will be pinned to the President despite his relatively short time in office and the fact that these issues were mostly inherited.
On the Finance & Markets Monitor, Joseph Mason argues that fundamental improvements would have to be made, if the Term Asset Lending Facility (TALF) were to be retained as a permanent lender of last resort. See TALF as a Permanent Lender of Last Resort.
In Asset Allocation, Rick Bookstaber takes issue with the notion of being able to construct an all-weather portfolio and argues that there is “no magic asset allocation that protects you from the buffetings of financial storms without it also trimming your sails during fair weather.”
In Giving the SEC Teeth, Barry Ritholtz doesn’t see any evidence of a sincere effort to make the SEC a serious watchdog with teeth, and notes that the problems at the SEC were decades in the making.
Also on the Finance & Markets Monitor:
The CFPA does not need Preemption by Joseph Mason
Is There a Future for the Bank? by Roberto Tamborini
An Inside Look at How Goldman Sachs Lobbies the Senate by Mark Thoma
On the Peterson Institute for International Economics Monitor, Steve Weisman reflects upon what was achieved at the G20 gathering in Pittsburgh as well as the promises that were made by the major economic powers as they consider the path forward with respect to exit strategies, current account imbalances, and financial regulation reform. See Promises, Promises: Will the G-20 Haunt or Help Obama Later On?
On the Global Macro EconoMonitor, John Graham and Kate O’Sullivan return with their quarterly survey of thousands of chief financial officers from around the world, and report that the recovery will be lethargic, with unemployment growth lagging behind the rest of the economy. For the U.S. they see unemployment peaking some time next year, with U.S. firms expecting to fill only about half of their former positions by the end of 2012. Don’t miss Economy Stabilizes but Employment to Lag.
In G20, Not G7* , Agnes Benassy-Quere and Olena Havrylchyk note that the G7 countries of the G20 have been more focused on financial regulation because of the relative consensus on these issues, but with regards to trade, global imbalances, and global governance, the G20 is finding it much more difficult to produce detailed statements.
On the U.S. EconoMonitor, Tim Duy pieces together economic data and signals from the Fed in an effort to predict the course of action that will be taken. See Rushing to the Exits?
In Federal Reserve’s Fisher Says Tightening will be Aggressive, Edward Harrison also looks for signals in the language of the Dallas Fed Chief regarding the Fed’s policy moves.
In The Fed’s Moving Target: NAIRU, Rebecca Wilder considers a shift in the natural (long run) rate of unemployment, which would make the Fed’s job of executing a precise exit strategy that much more challenging.
Also on the U.S. EconoMonitor:
The Public Option Lives On by Robert Reich
Update: War Watch – Iran by Fabius Maximus
Visualizing Industry Job Losses by Barry Ritholtz
The Fed Draining Reserves by Rebecca Wilder
On the Emerging Markets Monitor, Alicia Garcia Herrero suggests that covered bonds would be an appropriate method for housing finance in China given their large future needs. See How Should China Finance the Growth of its Housing Market?: Europe’s Experience with Covered Bonds.
In Currency Futures Liquidity ahead of the Forward Market?, Ajay Shah takes a look at India, which is starting to look like a country where the turnover of the currency futures market is big when compared with the currency forward market, which is quite rare.
On the Asia EconoMonitor, Michael Pettis provides a convincing argument for why he believes there are significant parallels between China today and Japan after the 1987 U.S. stock market crash. Pettis shrewdly points out that productive fiscal stimulus is determined by the economic value of the improvement, and argues that infrastructure spending is not automatically more economically viable in poor countries than rich countries. Don’t miss More Trade Tensions, and the Very Limited Advantage of Relative Poverty.
On the Latin America EconoMonitor, Alejandro Schtulmann takes an in-depth look at the Mexican army and considers the consequences of its increased involvement in the war against the cartels. Read Desertion, Low Morale, and Readiness: Assessing the Mexican Army’s Involvement in the War Against the Cartels and its Impact on Capabilities for Traditional Responses.
On the Europe EconoMonitor, David Smith argues that we should not exaggerate the likely effect of debt aversion or saving on spending, nor should we expect a new age of austerity for Britain. See We’re Still a Nation of Spenders, Not Squirrels.
Manuel Alvarez-Rivera takes an in-depth look at Germany’s 2009 Bundestag Election: a Political Realignment in Progress?
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