Category: Economy
On the IMF bailouts, Greek defaults and Canadian household debts
Below is the link to my latest appearance on BNN with Howard Green and Ryan Avent. Quick thoughts here
Full text: Indonesia regains investment grade from second ratings agency
Just as Europe and the US are suffering massive downgrades, other countries are seeing their risk profiles improve. Indonesia is a perfect example
Some Thoughts On IMF Resources
We think markets are getting too bulled up on the IMF headlines today. As the saying goes, “Show me the money!” Until then, we remain skeptical that the IMF will be able to obtain the extra funding it desires. Even if the IMF does get the extra financing, will it make a material difference? IMF/EU programs for Greece, Ireland, and Portugal have not been able to halt the crisis
Monti, The Full Version
Fortunately the ECB has deep pockets, and as I argue in this post, these will probably suffice to keep short term bond yields down to acceptable levels, and help the banks fund themselves and recapitalise. What the ECB’s LTRO’s won’t do is get new credit moving (one significant part of the initiative involves banks in the troubled periphery economies not having to write down the asset side too much too quickly, so there will be little room for “creative destruction”)
Fear Factory: Jon Stewart on Foxconn
This is grim. Bill Black has the analysis; he thinks this is a criminogenic environment of control frauds
Chart of the Day: The Ultimate European Government Debt Chart
Check out the below graphic which shows General Government Deficit/Surplus as % of GDP on the Y axis, Government Debt as % of GDP on the X axis, and the Government Debt in Euros as the size of the bubble. Pretty cool!
Jim O’Neill: Chinese GDP numbers are “a blow for the hard landing guys”
There has been a lot of discussion about whether China’s growth will slow enough to be considered a hard landing and what that would mean for the global economy and investors. Below is an account from Bloomberg featuring Goldman Sachs Chief Economist Jim O’Neill that is more in the soft landing camp. O’Neill also talks about the European sovereign debt crisis and Greece
China GDP grows at 8.9% in quarter through December 2011
That’s a full percentage lower than Q1 2011. So clearly the Chinese economy has slowed in reaction to both global slowing and the Chinese authorities’ attempts to cool asset and price inflation
The Massendowngrade Effect
Perhaps the main point to take to heart from the events of the last week is the way the recent ECB liquidity measures have apparently been able to stabilise the debt crisis, at least for the time being, even while it is not clear that they will have the same success stabilising the deterioration in the respective real economies
Protest and Nationalism in Eastern Europe
Since the possibility of further social tensions leading to nationalism is something on my radar screen, I thought I would post these videos from Euronews. In a good economy, these issues are nothing to get concerned about. But in a bad economy, especially one wracked by austerity and unemployment, tensions will have political consequences
Full text: S&P European Sovereign Downgrades
The following is the text of the S&P ratings statement associated with a review of the euro area sovereign credit ratings
Chart of the Day: U.S. Gasoline Consumption Tanks in 2011
A chart of gasoline consumption and oil prices for the years 2000-