Tag: trade

Merkel goes to China to halt German economic slowdown

Merkel goes to China to halt German economic slowdown

By Sober Look The yield spread between US treasuries and German government bonds hit a new high last week (see chart). Was this divergence in rates simply a response to the ECB action last month (see post) in combination with stronger jobs data in the US or is there more to it? Part of the answer has been softer than […]

Marc Faber: China’s Malinvestment Unwind ‘Will Be a Disaster’

Marc Faber: China’s Malinvestment Unwind ‘Will Be a Disaster’

Marc Faber appeared on Bloomberg Television yesterday to discuss the Chinese economy. While Faber generally seems to be a long-term bull on China, he had some disquieting things to say about the extent of malinvestment in China due to the recent round of government stimulus and infrastructure-oriented investment. Faber told Trish Regan and Matt Miller “I think that we had […]

Russia and China’s challenge to US hegemony

Russia and China’s challenge to US hegemony

Recent economic and geopolitical events should be seen through a longer-term strategic lens. During the Cold War, we lived in a bipolar world dominated by the US and its Allies on one side and the Soviets and their vassal states on the other. Ever since the Soviet Union and the east bloc collapsed, there has been a lot of talk […]

More on the failure of Abenomics

More on the failure of Abenomics

My contention has been that the first two arrows of Abenomics gave the Japanese economy a short window to bring the Japanese labour market back to full employment, re-ignite wage gains, and institute structural reforms. In my view, Abe has not used this window effectively and the stock market and economic gains of the beginning of 2013 are going to recede. Last month I predicted Abenomics would ‘fail’ as Japanese GDP growth slips below 0.5%. We are well on that path.

More on the Ukraine conflict

More on the Ukraine conflict

Today’s links carry a widely-diverging set of opinions about the moral issues surrounding the situation in Ukraine. But since this is a finance site, I want to discuss the economic issues. I continue to believe the Ukrainian situation will have only a modest impact on the global economy unless war breaks out. Moreover, Europe’s trade linkages to Russia make sanctions a trickier subject for Europe than the US. Expect to see diverging views within NATO and no meaningful economic penalty as a result.

The growing mess which will be left behind by the Abenomics experiment

The growing mess which will be left behind by the Abenomics experiment

Japan’s deflation problem is overdetermined – there are multiple causes at work, any one of which could account for the observed phenomenon. Those who have been following the debate can simply choose their favourite – balance sheet recession, liquidity trap, fertility trap – each one, taken alone, could be sufficient as a cause. But I would here like to use the term “overdetermination” in another, less technical, sense, since it seems to me Japan’s problem set is overdetermined in that we always seem to be facing at least one more problem than we have remedies at hand.

BoE Shatters Quiet Session

BoE Shatters Quiet Session

– The big event today is the BOE’s Quarterly Inflation Report and the updated economic assessment and forward guidance; sterling is outperforming
– Carney indicated that the new forward guidance would look at a broader range of economic indicators, without being too specific
– Italian Prime Minister Letta was to announce a new coalition pact yesterday, but PD head Renzi withheld support
– Japan reported a dismal December machinery orders data, a proxy for capital investment
– China reported news that seemed, well, over the top