Obama made yet another pitch in State of the Union Address for his gimmies to multinationals known as the TransPacific Partnership and the TransAtlantic Trade and Investment Partnership. Today that idea went down in flames, at least as far as getting the deals done this year are concerned.
Read more...Yves here. This article provide perspective on Obama’s unseemly anxiety to push through the toxic trade deal known as the TransPacific Partnership. the TPP is that it is a crucial part of Obama’s “pivot to Asia” strategy. One of its aims is to isolate China by creating a trade bloc that excludes the Middle Kingdom. The article below helps explain why non-military means of reinforcing US hegemony are particularly important now.
Read more...Yves here. It’s been frustrating to see orthodox economists continue to invoke the Bernanke “saving glut hypothesis” as a significant driver of the crisis. That view was rebutted in gory detail in a 2010 paper by Claudio Borio and Piti Disyatat of the BIS, “Global imbalances and the financial crisis: Link or no link?” (see Andrew Dittmer’s summary here). Not surprisingly, the orthodoxy has chosen to ignore this paper.
A new working paper by Junji Tokunaga and Gerald Epstein, “The Endogenous Finance of Global Dollar-Based Financial Fragility in the 2000s: A Minskian Approach,” builds on the perspective of the Borio/Disyatat paper. Readers should find this summary to be a straightforward, persuasive discussion of an important topic.
Read more...China faces the first big test of its shadow banking system, in the form of a pending default. How is it likely to fare?
Read more...By Clive, a regular Naked Capitalism commenter and self-confessed Japan-o-phile
The headline, in a one liner, is what this article is saying. You may have to take my word for it if you’re not a Japanese reader, but read on to find out why I hope you can.
Read more...Wikileaks has thrown yet another wrench in the negotiations over the sellout-to-multinationals-masquerading-as-trade-deal otherwise called the Trans-Pacific Partnership.
Read more...As we discussed earlier, even though there’s abundant evidence that the Administration’s plans to push through its trade deals, the Trans Pacific Partnership and the Transstlantic Trade and Investment Partnership, are in trouble, the official messaging has been to keep pretending that the pacts are still moving forward smartly.
Read more...We’ve both written and spoken about the wildly mislabeled “trade” deals that the Obama Administration is still trying hard to conclude, despite its abject failure to meet an arbitrary deadline of year end 2013.
Read more...Mexico is doing badly at feeding its own people, thanks to 20 years of NAFTA.
Read more...Yves here. This post is important because even though the Fed is focused on the impact of QE (and hence the taper) on the domestic economy, it’s been getting enough of a hard time from central bankers of leading emerging markets economies that it least has to feign concern credibly.
The Eichengreen/Gupta paper summarized in this post concludes that, quelle surprise, the countries most vulnerable to changes in Fed policy (which really means hot money in and outflows) are those with the biggest financial markets relative to GDP. Curiously, Eichengreen and Gupta fail to note that this means the orthodox advice to developing economies, that financial “deepening” is a Good Thing and therefore should be supported by government policy, in fact reduces financial stability and makes them even more vulnerable to the moods of fickle foreign investors.
Read more...Given the extreme measures the Obama Administration has gone to to keep the pending trade deal known as the TransPacific Partnership under wraps, it’s hard to be certain where things stand. But like the Administration’s failed effort to have the US intervene in Syria, this has the potential to be one of those rare cases where the interests of ordinary citizens prevails.
Read more...A dubious FX trading software operation closes down in New Zealand and sets up shop in Ireland.
Read more...France’s government is struggling to stay relevant….and Groupe BPCE may have provided an answer by telling Germany to pay up or exit the Eurozone.
Read more...How a British Carbon Credit Pusher Got a Listing on a Danish Stock Exchange, Brokered by a New Zealand Financial Company Run by an Australian Residing in Switzerland
Read more...ves here. Pettis highlights the difficulties of restructuring the Chinese economy to feature more small business lending and consumption and calls them “political.” I’m not sure I agree fully.
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