Wellie, lots of commentators (see here and here for a sampling) have taken note that Timothy Geithner contradicted himself royally today in his Congressional testimony. And mind you, this was WRITTEN testimony, so one cannot give him the benefit of the doubt (such as that he did a bad job of tap dancing when faced […]
Read more...The 30 year Treasury bond has fallen from roughly 140 to its current level of 125-ish, so absent an intensification of deflation worries, one might surmise that at least some of the air has come out of the Treasury bond bubble. One might also take the view that the Chinese played this one astutely (or […]
Read more...Willem Buiter, who had a ringside seat at the Iceland meltdown, warned that the UK could follow back in November: With the pound sterling dropping like a stone against most other currencies and credit default swap rates on long-term UK sovereign debt beginning to edge up, this is a good time to revisit a suggestion […]
Read more...This blog from time to time has commented on deteriorating economic conditions in China, and expressed the view that the slowdown is likely to be worse than most mainstream forecasters have anticipated (although the projections are now being revised downward). That sort of post has often lead to reader comments that a lower level of […]
Read more...We have said from time to time that we had expected growth in China to be lower than mainstream forecasts. Although China is not as export dependent as widely believed, it had been enjoying not only a trade boom, but also a commercial real estate bubble. With two engines of growth in stall, China seems […]
Read more...Predicting the demise, or at least the marginalization of the euro is a popular pastime for some writers (Ambrose Evans-Pritchard of the Telegraph, one of our favorite deflationistas, engages in occasional euro-bashing). Similarly, quite a few investors I know think the euro has no hope of serving as a reserve currency. particularly because some eurozone […]
Read more...Even though China’s trade surpluses continue at record and near record levels (imports are falling faster than exports), China’s foreign exchange reserves are not even close to keeping pace. Readers may recall that a massive amount of money flowed into China, a good bit of it disguised (FDI was one of the suspect categories) because […]
Read more...While it would be easy to dismiss this move by the People’s Bank of China to inch away from dollar based invoicing, the fact is that the use of other currencies for denominating trade transactions has been on the rise. We cited this Globe and Mail story back in February: The chief executive of jewellery […]
Read more...Ah, when it rains, it pours, We Americans get news that the US federal deficits are over the trillion mark even before Obama and Congress pull out the checkbook in an effort to buy some prosperity, when we also are told, via the New York Times, that China, our biggest creditor provider, is likely to […]
Read more...Reader Michael sent a host of updates on China, which might collectively be called, “Lousy China News Wrap.” And I don’t think he was cherry picking The eye-catching one was a coded story on capital flight from China, “China warns of risks from “abnormal” cross-border capital flow,” from Xinhua. The reason that capital is exiting […]
Read more...We have worried out loud that the policy remedies being pursued by the US amount to trying to restore the status quo ante to as great a degree as possible, particularly in trying to resturn US overconsumption to something approaching its former levels. Although it may be difficult to work two agendas, crisis response and […]
Read more...In past times of geopolitical stress, the dollar has generally rallies as investors move to safer havens. That behavior was not evident today as investors fretted about possible escalation of conflicts in the Middle East and South Asia. The euro went up a teeny bit, the yen faded slightly, the pound retreated. So where did […]
Read more...One of the ugly features of the Great Depression that in many (but not all) cases worsened the severity of the contraction was that countries adopted “me first” policies with little regard to their broader ramifications. The poster child of this pattern is Smoot Hawley. Although there is some dispute among economists as to whether […]
Read more...Admittedly, China announced a raft of worst than expected economic data yesterday, even when analysts anticipated further weakening in November. So the comment by the head of China’s central bank, that further rate cuts may be coming sooner rather than later, would seem to be entirely predictable. But one has to wonder at the timing. […]
Read more...Further signs that the Chinese economy is in the throes of a serious downturn. From Bloomberg: China’s exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the People’s Bank of China, said today. “Things are not so good,” Fan said at a forum in Beijing. “November figures will come out soon, […]
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