Chart of the day: tax burden in the US and globally

Despite the widespread view in the US that taxes are high, taxes in the US are relatively low both in the global and historical context. These two charts from the Globe & Mail make that plain

From cautious optimism to caution

I am more cautious than optimistic on risk assets and the global economy. From where I sit global growth prospects are not improving; they are weakening

Global Manufacturing Slips Back Slightly In March

By Edward Hugh Evidence which would enable us to assess the full economic impact of the Japanese earthquake and tsunami is still hard to come by. There is a lot of talk of supply chain disruptions, but little in the way of detailed evidence to back up assertions of the more anecdotal kind. Even the

Economic Facts of Life about Global Energy

Oil spills, coal mining disasters, concerns over Middle East revolutions and now nuclear meltdowns. What do all these events have in common? As I have written earlier, they are energy-related. They all have to do with desperate efforts to find energy fuels to supply the world’s ever-growing demands. Where is the concern over the horrific civil war now commencing in the Ivory Coast? After all, its population is more than three times larger than Libya’s. Forget it, no oil

Kyle Bass on Japanese Insolvency and Systemic Risk in the Global Economy

Here’s more from the CNBC session with Kyle Bass, Managing Partner of Hayman Capital Management. David Faber introduced the topic as a discussion about tail risk and the "end of the world" trade. Bass took exception to that characterization saying that he was more concerned about a debt "restructuring that has to happen for the world to grow again". He says, "so far what we have seen is total credit market debt in the world in the last ten years has gone from $80 trillion to $200 trillion." That’s not sustainable.

It was interesting to see at the outset of the Bass clip I am putting up below that CNBC ran through a similar thesis regarding Japan. During the quantitative easing last decade, Japan saw a tremendous cyclical rally. But when policy stimulus was withdrawn, the market hit new multi-decade lows. Stimulus without reform leads to a policy cul de sac. For Japan, Bass says the country has been effectively insolvent for years and is in this false period of "homeostasis" only because its population buying 10-year bonds with a 1 interest rate handle expects deflation.

Davos leaves Nouriel Roubini downbeat about policy coordination and Egypt contagion risks

Piggybacking off of my last post highlighting Nouriel Roubini’s talk with Simon Constable, I wanted to present three videos from Roubini’s appearance on NBC Europe this morning. In the earlier pre-Davos Wall Street Journal interview, Roubini was pointing out that great risks still remain in the global economy. He highlighted the need for policy coordination

Why our Fundamental Approach to Banking Regulation is Inherently Unsound

By William K. Black (cross-posted from Benzinga.com) Greetings from the North American Securities Administrators Association (NASAA) annual enforcement conference in Charleston, S.C.  I’m giving the keynote address Monday.  I’ll discuss the NASAA members’ exceptionally important and often effective role against securities fraud in future columns.  This column, however, deals with “safety and soundness” banking regulation.  

Economic Themes at the Start of 2011

BBH’s currency strategy team reviews the major economic issues in the four investing regions of note: the US, Europe, China and other Emerging Markets. In the US growth is accelerating. In Europe, the economy struggles with a sovereign debt crisis. In China growth is moderating. And in the Emerging markets, officials wrestle with capital inflows from abroad

Chart of the Day: Tax revenue as a percent of GDP by country

Only in Germany and Turkey did tax revenue rise as a percent of GDP last year amongst the twelve countries in the Economist’s graphic below. This is testimony to how deep the global downturn was. While it is unclear whether this graphic includes state and local taxes, in 2009, no developed economy collected as little in tax revenue as did the United States

Chart of the Day: Market Share of GDP and Foreign Exchange Reserves

Whether or not we are witnessing the end of the debate in Europe or simply another milestone on the way to The United States of Europe is a question for a dissertation, not a blog. In the meantime, these questions lead us to consider the current global monetary standing of “the member states whose currency is the dollar.” Below is the shrinking market share of the US Dollar as the world’s reserve currency since 1999…and the growth of the euro. And below is the United States’ shrinking market share of global GDP (in constant dollars) currency since 1969…and the growth of China and India. These are all changes that have occurred along the sweep of economic history, and for relatively short intervals at that. Far be it for us to draw conclusions on such large matters with such little data, but here are two: historical secular trends are hard to stop, and one of the greatest global economic advantages is scale

Timothy Geithner’s Letter to the G20 Finance Ministers

I will be on BNN today at 12 Noon ET talking about the G20 amongst other topics, so I wanted to highlight this issue. Here’s the text first (with added bolding) and then a few comments: First, G20 countries should commit to undertake policies consistent with reducing external imbalances below a specified share of GDP

Are the BRICs decoupling?

We have heard this de-coupling theme for quite a few years now. The theory is that high-growth emerging markets are becoming less reliant on the U.S. and therefore are immune to exogenous shocks from the U.S. The video from Russia Today TV below explores this topic. I spoke to RT America for this segment and