Category Archives: Globalization

Ireland Brinksmanship with the EU: Slow Motion Bank Run May Be Giving Government Leverage

In negotiations, understanding where you have leverage relative to your counterpart is key. Ireland appears to be engaged in a quiet staredown with the EU, evidently with the objective of securing a rescue of its banks rather than its government. In case you managed to miss it, Ireland is in the midst of a long […]

Auerback: G20 Post-mortem – “Chimerica” has been a Chimera

By Marshall Auerback, a portfolio strategist, hedge fund manager, and Senior Fellow at the Roosevelt Institute who writes at New Deal 2.0. A disastrous trade war may be coming our way. There has been a considerable amount of discussion about current account imbalances in light of last weekend’s failed G20 summit. For the most part, […]

Alford: The Fed Tests The Thesis That Two Wrongs Don’t Make A Right, But Three Do

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. In reaction to the OPEC-engineered oil price spikes of the 1970s, which economists would depict as external negative supply […]

Auerback: How Do You Say “Hypocrite” in German?

By Marshall Auerback, a Senior Fellow at the Roosevelt Institute, and a market analyst and commentator; first posted at New Deal 2.0. Before throwing rocks at the U.S. for its spending, Germany should take a look at its own crumbling glass house. Okay, I did a few years of German language study, so I know […]

Costello: On Trade

By Joe Costello, former communications director for Jerry Brown’s 1992 presidential campaign and senior adviser for Howard Dean’s effort in 2004; first posted at Archein “You going to liberate us girls from male, white, corporate oppression?” Tell em like it is, Fear of a Female Planet Fear baby Let everybody know — Sonic Youth When […]

QE2: Bernanke Cuts Geithner Off at the Knees

The Fed’s announcement of $600 billion of intermediate and long Treasury purchase, informally dubbed QE2, teed off a peppy rally in stocks, and led to further weakening of the dollar. These trends were already well in motion thanks to the central bank’s winks and nods that it was going to embark on another round of […]

Guest Post: Currency Wars and Emerging Markets

By Richard Portes, Professor of Economics at London Business School and President of CEPR, first posted at VoxEU The threat of a currency war between the US and China is one of the main concerns for the G20 ahead of this month’s meeting in Seoul. This column say that while policymakers appear to grasp some […]

Is the US Taking Too Much of the Brunt of the Crisis Aftermath?

Before readers throw brickbats at me, I’m just acting as the messenger for two articles, one by Harvard’s Kenneth Rogoff, the other by the Financial Times’ Martin Wolf. Each points out that the US is taking a proportionately bigger hit than other big economies post crisis, particularly in terms of unemployment. And this is actually […]

Germany Draws Line in the Sand on Eurozone Bailouts, Insists Bondholders Take Pain

The contradictions of the Eurobailout mechanism were bound to be resolved at some point, smoke and mirror and insufficient firepower relative to the magnitude of the problem will only take you so far. The eurozone rescue operation, although it looked like it was aimed at so called Club Med, aka PIGS sovereigns (Portugal, Ireland, Greece, […]

Eurozone Worries Rising?

There are more news sightings that point to heightened worry about Eurozone sovereign debt/bank woes. A spate from Bloomberg this AM. Normally, when I can come close to doing one-stop shopping on relevant topics on Bloomberg, it’s a sign of anxiety. The first is “EU Bows to German Call for Permanent Debt Mechanism.” This piece […]

Have the US and China Kissed and Made Up?

The recent jousting between the US and China had the look of a full on row. And the spectacle at last weekend’s G20 seemed to offer further confirmation, with Geithner proposing a cap on current account surpluses that was aimed at China above all. But now the Financial Times tells us that relations are already […]

Richard Alford: The Labor Market, the Trade Deficit, And The 800 Pound Gorilla

Yves here. One thing I have noticed on posts that discuss the US labor market and trade is reflexive and frankly somewhat dogmatic defeatism. The position seems to be “China and Bangladesh have such cheap labor, there is no way we can compete.” This view is simplistic. First, in capital intensive industries, direct labor is […]

Geithner Pushes for Cap on Current Account Surpluses

In all honesty, the news report out of the G20 strikes me as such a weird idea that I don’t know what to make of it. From the Financial Times: During an all-night meeting in South Korea of finance ministers from the G20 group of countries, the US called on nations to cap current account […]

“A currency war the US cannot win”

Yves here. This post cites a number of recent Western commentaries on China’s currency policies; I suggest, for one stop shopping, you read Martin Wolf comment, “Why America is going to win the global currency battle.” There are several points in the argument below that are curious, to say the least. One is the notion […]

Satyajit Das: Weapons of Choice in Trade Wars

By Satyajit Das a risk consultant and the author of the Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives During the European debt crisis, in a matter of days, the dollar strengthened by around 10%. The weakness of the Euro and resultant appreciation of the Renminbi by over 14% reduced […]