At Project Syndicate: Reply to Krugman's critique of my comment on Rogoff's denouncing straw-man vulgar Keynesianism http://t.co/U7qPSOn2m1
15 minutes ago
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JP Morgan’s Global PMI Shows Another Substantial Contraction In February
The performance of the worldwide manufacturing sector remained very weak in February. Although the JPMorgan Global Manufacturing PMI rose further from December’s record low, at 35.8 it was still well below the critical no-change mark of 50.0. Rates of decline eased for production and new orders, but accelerated to reach a new survey record for employment.
“The PMI edged higher for a second successive month in February. The data are still pointing to marked declines in output and new orders, but the gains in these indexes indicate that the rate of contraction has begun to ease in global industry. Production cuts are likely to remain deep near-term while companies reduce inventory.” David Hensley, Director of Global Economics Coordination at JPMorgan
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Eurozone Inflation Expectations Fall As The Output Gap Rises
It’s a depressing spectacle: on both sides of the Atlantic, policy-makers just keep falling short — and the odds that this slump really will turn into Great Depression II keep rising.
In Europe, leaders rejected pleas for a comprehensive rescue plan for troubled East European economies, promising instead to provide “case-by-case” support. That means a slow dribble of funds, with no chance of reversing the downward spiral.
Oh, and Jean-Claude Trichet says that there is no deflation threat in Europe. What’s the weather like on his planet? Paul Krugman, yesterday
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What This Weekend’s EU Summit Did And Did Not Achieve
Well reading the press this morning it would be fairly easy to reach the conclusion that nothing really happened yesterday in Brussels, and that a great opportunity was lost. The latter may finally be true, but the former most certainly is not.
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“There Is No Deflation Threat In Europe” – Jean Claude Trichet – Oh Really!
He’s at it again. Last year he was busily trying to worry us all that inflation was set to get completely out of hand among the 16 countries who make up the eurozone. Now the President of the European Central Bank, Jean-Claude Trichet, is hard at it on another tack and is busying himself trying to convince us that there is no credible deflation threat facing these countries. Apart from getting it wrong on both occasions, the common point here would be a certain inbuilt “inflation bias”, a bias which was earlier called “the original sin of the Bundesbank” by nobel prize winning Italian economist Franco Modigliani.
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Italian Business Confidence and Retail Sales Fall As Bond Spreads Rise
Italian business confidence fell to a record low in February as concern that the fourth recession in seven years will damp orders more than offset lower oil prices and borrowing costs. The Isae Institute’s business confidence index dropped to 63.2, the lowest since the index was created in 1986, from a revised 65.4 in January.
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Russia’s Economy Declines At An 8% Annual Rate In January
Russia’s economy contracted at an annual rate of 8.8 per cent in January, according to the latest statement by the Russian economy minister. This data point, which provides us with the latest confirmation that a very sharp contraction is now taking place in Russia, follows last week’s announcement by economic development minister Elvira Nabiullina, economic development minister, that the economy shrank by 2.4 per cent between December and January. Industrial production also fell 16 per cent year-on-year in January, while there was a 17 per cent decline in construction.
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US Fiscal Deficit Projected At 12.3% of GDP In 2009
According to the 2009 budget Barack Obama is sending to congress today, the United States will have a $1.75 trillion deficit this year. The figure represents 12.3 percent of estimated gross domestic product, double the previous post-war record of 6 percent in 1983, and the highest level since the deficit totaled 21.5 percent of GDP in 1945, at the end of World War II. It seems the numbers are about to start getting let out of the bag, and it will be interesting to see how the markets react. You can find many more details here.
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Japan’s Exports Collapse In January
Japan’s exports plunged by 45.7 percent year on year in January, producing a record trade deficit, as recessions in the U.S. and Europe, and a sharp downturn in China crushed demand for the country’s machinery, cars and electronics. A drop of this size is truly staggering.
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Let The East Into The Eurozone Now!
“It’s 20 years after Europe was united in 1989 – what a tragedy if you allow Europe to split again.”
Robert Zoellick, World Bank president, in an interview with the Financial Times
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Europe’s Economic Contraction Intensifies In February
Hopes that Europe’s battered economies might be about to turn themselves around took another sharp knock today (Friday), as the preliminary flash reading on the purchasing manager survey signaled that activity in both the manufacturing and the services sectors are contracting at a new record pace in February.
