George Magnus, senior economic advisor at UBS, provided a reading of the Chinese central bank’s announcement on its currency policy over the past weekend. He sees it as political, “symbolic rather than substantive.” He also contends that China needs to make significant policy changes. From the Financial Times: It would be churlish not to acknowledge […]
Read more...As we noted last week, Spain has forced the hand of other Eurozone bank regulators by declaring it will release the results of recent ECB stress tests, which earlier were to be published only on an aggregated basis, not bank by bank. There is still a good bit of confusion as to what happens next. […]
Read more...By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Calls for global rebalancing are back in vogue, while the debate about the appropriate stance of domestic policy heats […]
Read more...The Chinese central bank made a vague announcement about its currency policy on its website today, which the officialdom, on cue, treated as a major move (to wit: “China vows increased currency flexibility” at the Financial Times, “Chinese say they intend to free up their currency,” Washington Post).) As we describe below, this “announcement” is […]
Read more...This post appeared as an op-ed in Mint, India’s second largest business newspaper. The financial market upheaval that started in May is a stark reminder that the conditions that produced the global financial crisis of 2007-08 have not been resolved. The sucking sound of deflation emanating from Europe and the creaking of bank balance sheets […]
Read more...Tonight brings an odd pairing: Lord Skidelksy, the highly respected biographer of Keynes, and Ambrose Evans-Pritchard, who is generally of the Austrian persuasion, both continuing, as each has, to object to the extreme measures in the process of being implemented in the eurozone. Now before you say that they are both Brits, and therefore suspect […]
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Read more...Martin Wolf, in today’s Financial Times, uses modern monetary theory (!), also known as the fiscal balances approach, to explain why calls for fiscal belt tightening are premature. Let’s provide a little background, courtesy Rob Parenteau of the Levy Institute: …if we divide the economy into three sectors – the domestic private (households and firms), […]
Read more...I’ve been quite mystified at all of this “double dip” recession talk, even though I suppose it beats the “V shaped recovery” talk. Both presuppose that we had a recovery underway, the real sort, not the type that is mainly the artifact of inventory restocking, halting and sometimes covert stimulus, (like hiring unprecedented numbers of […]
Read more...Before European readers get upset about the discussion of continued concerns about the eurozone, some of its eager defenders appear to subscribe to an extreme form of indeterminacy. If you recall the famed Schrodinger’s cat, the indeterminacy of the position of an electron is made (somewhat) more comprehensible by a thought experiment in which a […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). It Always Ends in the Same Way … No one, including the IMF, seriously believes that the austerity program announced by Greece will work. Argentina had debt […]
Read more...A fresh Gallup poll reports that Americans are most worried about….federal debts (hat tip Marshall Auerback via the Atlantic): Gallup also provided a tally of how members of each party view the issue: It would appear the ground has been laid rather effectively for (among other things) an assault on Social Security and Medicare. As […]
Read more...It is not a sign of intelligence to repeat a course of action and expect different results. Yet our officialdom is doing pretty much just that on the economic front. Treasury and the Fed in particular seem quite pleased with their success in patching up the financial system with duct tape and baling wire and […]
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0 (and happens to be Canadian). For once, Canada is making the news for the wrong reasons: The government of the United Kingdom has braced the country for cuts in government spending of up to 20 per cent as the new […]
Read more...Martin Wolf, the Financial Times’ influential economics editor, takes issue with the austerity fad that is sweeping governments in advanced economies. From his comment: Against this background, what would a big tightening of fiscal policy deliver? In the absence of effective monetary policy offsets, one would expect aggregate demand to weaken, possibly sharply. Some economists […]
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