The German word for election, Wahlen, comes from the word “choice”, and in this general election there wasn’t really one. And that’s too bad for the rest of Europe.
Read more...Overnight market action shows that nobody really has a clue about the Fed taper any longer.
Read more...In China, things are not looking pretty.
Read more...Yves here. It’s intriguing that “our economic model is based too much on the housing market” is becoming a meme a mere six years after housing bubbles in most advanced economics were a major driver of the global financial crisis.
Read more...While it’s a relief to have Larry Summers out of the running for the Fed chairmanship, it’s also important not to labor under any delusions about Janet Yellen, the nominee presumptive.
Read more...By Leith van Onselen, Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. You can follow him on Twitter at @leithvo. Cross posted from MacroBusiness
It’s all about the FOMC meeting at 04:00 AEST tomorrow morning and to be honest nothing else really matters. Ben Bernanke speaks 30 minutes later at 04:30 AEST and the chairman’s speech will also be highly watched, potentially increasing volatility across the board.
Read more...Yves here. This post may strike some readers as a bit wonky and a bit too well-fitted to the woes of the Eurozone. Varoufakis argues that it has broader applicability. And consider: our Richard Smith has speculated that the US civil war was really the result of a strained currency union. I’m not terribly knowledgeable about the economics of 19th century America (I studied England and France during that period instead) but on a first pass, Varoufakis’ ideas appear to have some relevance for that period as well.
Read more...By Sameer Dossani, an advocacy coordinator at ActionAid International, a development NGO dedicated to ending poverty. Cross posted from Triple Crisis
While much of the media coverage around the G20 leaders summit has been about the failure of international diplomacy in Syria, the formal agenda was around one issue: growth. But focusing on growth is a bit like treating strep throat with asprin. You may alleviate some of the symptoms, but you’re not treating the source of the problem.
Read more...Cities have seen dizzying home-price increases that are giddily reported and infused with pandemic housing hype and trillions from the Fed into a self-propagating force. But what happens when it hit the immovable object of higher mortgage rates?
Read more...Yves here. While this post focuses on a newly-released Department of Energy forecast, and forecasting is always a fraught exercise, there’s good reason to see it as realistic. It reflects the power of inertia and entrenched interests. If anything, you’d expect the DoE to present a hopeful outlook on the growth of eco-friendly power sources, given how often Obama talks about “green energy” and “green jobs,” but the authors appear to have steered clear of undue optimism.
Read more...Anyone surprised by the housing recovery is simply blind to the context that the Federal Reserve has administered a bazooka full of aid and comfort over the past few years. They bought up enough mortgage bonds to force interest rates to near-record lows, boosting the fortunes of asset holders. And in so doing they made housing an attractive investment product, bringing lots of Wall Street cash into the REO-to-rental play, at least for a short while. That predictably increased demand and put housing prices on their current trajectory.
Read more...Another good week for Europe as the latest PMI data shows the tentative recovery is gaining pace.
Eurozone manufacturing recovery gathers pace in August
• Final Eurozone Manufacturing PMI at 26 – month high of 51.4 in August (July:50.3)
• Growth improves in Germany, the Netherlands, Italy, Austria and Ireland.
• Input prices broadly unchanged since July
The Obama administration, for reasons that pass all understanding, has been running a campaign of leaks disparaging one of Obama’s few senior female appointees, Janet Yellen. Her high crimes include not being a protégée Bob Rubin and doing exceptionally well in economic forecasting. Rubin wants the job of Fed Chair to go to his top protégée, Larry Summers. Yellen, as Vice Chair of the Fed stands in the way of Rubin’s ambitions. (Rubin is too toxic to take the Chair directly.) The administration has been leaking primarily to the New York Times’ Binyamin Applebaum. His latest article contains this remarkable statement, without analysis…
Read more...By Dan Kervick, who does research in decision theory and analytic metaphysics. Originally posted at New Economic Perspectives.
Some people believe in endogenous money. They believe we live in a monetary system is which money is generated and extinguished as part of the ordinary flow of everyday economic activity. The economy tends to generate the money it needs in order to satisfy the exchange desires and saving preferences of participants in the economy, and to extinguish the money it doesn’t need.
The endogenous money picture is in some considerable tension with the idea that the monetary system is controlled by the government. The alternative exogenous money picture holds that the issuance and destruction of money is a task reserved for government alone, and that the total amount of money present in the economy is therefore a government policy choice.
Read more...No debacle is allowed to interfere with Chancellor Angela Merkel’s efforts to hang on to her job, and any debacles get swept under the rug at least until after the elections on September 22. Every time uppity opposition voices stir up some controversy, it’s brushed off, denied, ridiculed, or minimized – and it has worked admirably well so far.
Even Edward Snowden’s revelations day after day in Der Spiegel – which had received copies of documents detailing German involvement in NSA spying activities, among other sins – were successfully shuffled off. Though the discussion continues to be heated, it is, like in the US, a bi-partisan debacle, compromising political figures from both sides. The scandal is spreading and festering, but apparently without political fallout.
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