Back in February I posted an article called “The bullish argument for the global economy” highlighting Goldman Sachs’ Chief Economist Jim O’Neill’s bullish view for the economy. O’Neill believed in February that a economic rebound was certainly possible due to fiscal and monetary stimulus. Paul Kasriel has made similar arguments.

While I do agree that fiscal and monetary stimulus have been great and may induce a cyclical rebound, I wanted to point out that he mentioned the Philly Fed Survey and the ISM surveys as potential leading indicators of recovery.

ShareMarshall Auerback here. Remind me again what Larry Summers was talking about when he spoke of the US as being a “nation of laws”, where “sanctity of contract” is sacrosanct?
In a case of first impression that could have far-reaching implications, a bankruptcy judge in California recently determined that municipalities that file petitions under Chapter [...]

ShareThis comes from Win Thin, a senior currency strategist at Brown Brothers Harriman:
Mexico President Calderon is now saying that Mexico stands ready to take a $30-40 bln IMF credit line. This was a surprise to us, and we view this as a negative for Mexico since no country until now has gone to the [...]

ShareThis clip is very much in line with my thinking from a previous post.

ShareIf you want to know what a modern-day depression looks like, try Ukraine.
Growth in the ex-Soviet state, hit by shrinking markets for its steel and chemical exports, stood at 5.8 per cent of gross domestic product in the same period of 2008. ”We were ill-prepared to confront the crisis and its first blow was painful [...]

ShareYou might have thought house price declines were slowing. I certainly had hoped so. The latest data from January 2009 from the S&P/Case-Shiller index suggests this is wishful thinking as year-on-year declines hit another record of 19%. The decline was not only steep, but very broad-based.
Data through January 2009, released today by [...]

ShareObama’s Mid-Term Election – Nate Silver on 2010 Congressional Elections Do Democrats need an economic miracle to avert a serious setback in congressional elections next year? The stats guru’s new model shows that Obama will need about a 65-percent approval rating to hold the mid-terms.
Wagoner encircled, exits GM with $29m handshake
Bradford & Bingley reveals chief earned [...]

ShareIn the wake of recent statements by Chinese officials about the dollar and dollar assets (see our previous comments here, here and here), it does seem like the Chinese are avoiding dolar-based transactions:

China and Argentina have made a tentative agreement to swap $10bn (£7bn) worth of their currencies.
The move, which allows both countries to bypass the [...]

ShareThe website You Walk Away has become pretty popular because it teaches mortgage holders how to dump their properties on banks and get out from under their mortgage without losing everything. Apparently, banks are getting into the act too — and walking away. That leaves some people holding the bag when they didn’t [...]

I like the fact that President Obama has drawn a line in the sand and signaled that no more funds will be given to U.S. automakers without their presenting a viable long-term plan for restructuring. Ultimately, the automakers cannot survive merely as a result of government largesse, but through the discipline of a competitive auto market.

In my view, the American automakers are viable companies which can produce cars that sell well. It is their poor operating cost structure and disastrous balance sheets which make them bankrupt organizations. This should mean they are prefect candidates for restructuring.

Nevertheless, other aspects of Obama’s treatment of the automakers are troubling. The dichotomy between how the big three automakers are being treated and how the big banks are being treated plus the sacking of a CEO at a critical juncture leave a lot of questions.