The Jackson Hole conference starting today is expected to include a talk by Ben Bernanke on the benefits and costs of further monetary easing, which in ZIRP-land means quantitative easing. Gavyn Davies put up a good short list of arguments made against QE at the Financial Times, and most do not look terribly persuasive. One […]
Read more...The yen reached a 15 year high overnight as the Japanese Finance minister’s efforts to talk the currency down appear to have backfired. From MarketWatch: Strong words against a strong yen from Japanese Finance Minister Yoshihiko Noda failed to prevent the Japanese unit from rising to fresh multiyear highs…. Noda said that recent currency moves […]
Read more...Beijing-based fiance professor and commentator Michael Pettis gives a typically sobering outlook in a Financial Times comment today, seeing the seemingly irresistible force of trade surplus countries’ resistance to shifting towards more internal generated demand colliding with the immovable object of trade deficit countries’ inability to tolerate the high unemployment rates that result for a […]
Read more...John Plender in his comment at the Financial Times, “Great dangers attend the rise and fall of great powers,” does a fine job given the space constraints of discussing the fraught process of changes in global economic and political leadership. I thought it would be useful to quote Plender at length, with some additional observations, […]
Read more...By Marshall Auerback, a portfolio strategist and fund manager who writes at New Deal 2.0 In a post titled “China Cuts US Treasury Holdings By Record Amount,” Mike Norman makes the excellent observation that while China is moving its money out of Treasuries, interest rates are hitting record lows. In other words, the sky still […]
Read more...The Fed seems to be exhibiting a pretty bad case of “if all you have is a hammer, every problem looks like a nail” syndrome, particularly when it has (or perhaps more accurately, had) other tools at its disposal. In case you somehow missed it, global markets got a bad case of deflation heebie jeebies […]
Read more...This post appeared originally on July 27, 2007 Warning: this post is only for those with sound constitutions. Tim Lee, head of a financial economics consultancy, tells us in a Financial Times article what a carry trade unwind will look like (answer: very nasty) and what it would take to prevent it (the Japanese have […]
Read more...By Kati Suominen, Trans-Atlantic Fellow at the German Marshall Fund in Washington, cross posted from VoxEU The global crisis has led some to question the dollar’s place as the dominant currency. This column discusses three camps in the literature: those advocating a new synthetic global currency, those arguing that a new reserve currency will emerge, […]
Read more...Look, I love the Financial Times, but even the pink paper has its off moments. Today, the FT reports, with the journalistic equivalent statement of a straight face, a patently ridiculous statement from China’s State Administration of Foreign Exchange: China has delivered a qualified vote of confidence in the dollar and US financial markets, ruling […]
Read more...We’ve warned for some time that the eurozone’s sure-to-fail muddle-through approach to its structural challenges was rattling investor confidence. Worse, its insistence on wearing an austerity hairshirt was not only committing Europe to deflation, but had high odds of sucking the global economy down along with it. Given how fragile the recovery is in advanced […]
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...Simon Schama tonight warns in the Financial Times that revolutionary rage is close to the boiling point in Europe and the US : Historians will tell you there is often a time-lag between the onset of economic disaster and the accumulation of social fury. In act one, the shock of a crisis initially triggers fearful […]
Read more...Ouch. The media has been fixated with the euro versus the dollar, and has paid less attention to some of the dramatic action on other fronts. Mrs. Wantanabe seems to be shedding risk, big time.
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Many market analysts, commentators and economists claim to be having a hard time finding a metric in which the US is in better financial shape than Greece. Ken Rogoff, for example, recently warned that a Greek default would usher in […]
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