Post Tagged with: "Economy"
[Premium] Daily commentary: More Chinese stimulus in the works
Yesterday I wrote about Chinese trade growth plummeting. This is having a negative impact on economic growth. The Chinese authorities get that. And so they have decided to boost demand
Spain: EU estimates for contraction now considerably deeper
This is not a good day for Spain. The day began with the EU Commission revising its estimates for the Spanish economy. The contraction is now expected to be considerably deeper. Spain unveiled its new efforts to address the banking problems. It is the fourth one since the crisis began and the second one since Rajoy became PM. Spain is forcing the banks to boost their loan loss provisions on real estate loans by 30 bln euros. They have already put aside about 54 bln euros. The Center for European Policy Studies warns that bank losses could be as high as 380 bln euros. Moody’s estimates Spanish bank losses could be around 305 bln euros
Chart of the Day: Euro zone GDP by country
This chart was attached to a very good front page article in today’s Wall Street Journal by Marcus Walker on How a Radical Greek Rescue Plan Fell Short. The article gives a blow-by-blow account on how the Greek crisis has unfolded and a detailed view on where each of the Greek and European leaders stood on various issues involved in Greece’s debt restructuring. The chart itself demonstrates the enormous gulf between the size of the German economy and other economies in Europe, giving some sense of why the Germans (and the French) have come to dominate European policy discussions
[Premium] More on the mean-reverting economic surprise index
A few of the investment banks have a macro or economic surprise index. In March I mentioned Barclays’ version. This month I wanted to highlight Citi’s version and what it is telling us about the US economy
Video: Ron Paul vs Paul Krugman
Here is the video everyone is talking about, Ron Paul and Paul Krugman debating the economy and economic policy. Enjoy
[Premium] Expect a weak US jobs report in May
The jobless claims came out again today and the numbers were weak
Chart of the Day: Demography, China’s Achilles heel
The Economist: “Over the past 30 years, China’s total fertility rate—the number of children a woman can expect to have during her lifetime—has fallen from 2.6, well above the rate needed to hold a population steady, to 1.56, well below that rate”
Keen: Instability in Financial Markets
Steve Keen’s talk at INET is now up on the web (hat tip BT). His talk is billed as a primer on Hyman Minsky. In it, Steve argues that one cannot model Minsky using a New Keynesian or traditional neoclassical approach because of the reliance of these modelling approaches on the economic equilibrium assumption. Keen sees this assumption as the major flaw that cannot be remedied using standard modelling approaches
Chart of the Day: Economic Depression in the Euro Zone Periphery
“The chart also shows that the current economic situation is much weaker in several euro-area periphery countries. The recession in Greece has yet to end, and real GDP is now more than 17 percent below its prior peak. While a recovery recently appeared to be under way in Ireland, real growth is still 12 percent below peak. Portugal’s economic contraction during 2008-09 was less severe than that for the euro area. However, Portugal’s recovery faltered in mid-2010, and the economy has been contracting since then. Spain also experienced a milder recession than the euro area, but its recovery began later and has been progressing at a slower pace, leaving it around 4 percent below peak.”
You Can’t Handle the Truth!
Remember the scene in A few Good Men where Colonel Jessup (Jack Nicholson) and Lieutenant Kaffee (Tom Cruise) trade insults? Following some pretty intense questioning, Kaffee yells at Jessup: “I want the truth”. With the deadly glare that only Jack Nicholson can muster, Jessop retorts: “You can’t handle the truth”. I was reminded of this rather famous moment in film history when a long time reader of the Absolute Return Letter asked me recently: Why don’t you tell the truth about the UK economy? Why don’t you tell it as it is – that the situation in the UK is worse than it is in the eurozone? I decided to take up the challenge from the reader. I am not sure that I actually agree that the UK is in a worse position than most eurozone countries; it is worse in some respects but better in others. More about this in a moment
[Premium] Daily commentary: On teaching economics
There has been a lot of back and forth in the financial and economics blogosphere about the centrality of financial institutions and their facilitation of private debt accumulation leading up to the Great Financial Crisis. It seems to me that the economics profession had a hand in this given economists were almost uniformly unable to foresee the crisis. We relied on them for economic counsel and forecasts and they failed. The right approach in dealing with such a fantastic failure would be to re-examine their models
US Manufacturing Surprises to the Upside
The Institute for Supply Management (ISM), the US purchasing managers’ index (PMI) for March increased to 53.4 from 52.4 in February, beating expectations of 53. It’s the 32nd consecutive month that the index has been at least