From the Financial Times: For the last three years the world’s biggest economies – the US, eurozone and China – have been living up to the infuriating euphemism so beloved of policymakers: “kicking the can down the road”. They have been avoiding the tough decisions that are required to address their fundamental economic, financial and … Read more
The thinly traded equity markets took off today on the strength of some very good November numbers out of the Census Department on the U.S. home building sector (also, among a few other things, an absence of bad news from Europe – but that’s another matter). The numbers were quite good on both the starts and permits side, showing annualized, … Read more
Two weeks ago on Wednesday night, after the Chinese markets closed, the People’s Bank of China announced that it had cut the minimum reserve requirement by 50 basis points to 21% for the large banks, and lower for the smaller banks. With the announcement coming just hours before announcements by the Fed, the ECB and … Read more
At a time when many eyes look hopefully towards the ECB for the kind of action which may prove to be the salvation of the much beleaguered Eurozone other, more critical, ones are casting themselves back over the recent track record of the institution itself, and asking what, if any, responsibility the Frankfurt-based bankers have for having … Read more
Earlier this week, I appeared on Bloomberg, and the interview was posted online under the cheerful headline “Chovanec says China faces harder landing than expected.” I know, I’m a bundle of Christmas cheer these days — but as I said at the Economist conference a few weeks ago (in an allusion to Game of Thrones), … Read more
In yesterday’s AM Reads, I linked to Millionaire’s Island — a longish discussion about Job creation by Henry Blodget at Business Insider. An interesting discussion, but a flawed argument. This error comes up frequently in the way employment is measured. As it turns out, entrepreneurs end up “creating” less jobs than you think. Yes, they … Read more
The EU answer to rebalancing portfolio and trade flows within the Euro area (EA) without currency devaluation is recession and deflation. They call this ‘internal devaluation’ – shifting relative prices by reducing domestic demand in the debtor countries, thereby shifting the terms of trade. Marshall Auerback calls it ‘infernal devaluation’. Marshall’s right. Today we got more … Read more
The most widely watched U.S. inflation indicator, the seasonally adjusted all-items CPI for urban consumers, fell in November at an annual rate of 0.23 percent. The decrease was small enough that it will hit the headlines as no change, based on the rounded monthly data reported in the press release from the Bureau of Labor … Read more
Niklas Blanchard sends us to the BBC where “top economists” are sharing their most important economic graphs of the year. Here, for example, is an interesting graph from Vicky Price of FTI Consulting: Price explains its importance: “For a long time the perception was that the creation of the euro meant sovereign risk was effectively … Read more
From Project Syndicate: The outlook for the global economy in 2012 is clear, but it isn’t pretty: recession in Europe, anemic growth at best in the United States, and a sharp slowdown in China and in most emerging-market economies. Asian economies are exposed to China. Latin America is exposed to lower commodity prices (as both … Read more