Archive for the ‘Economy’ Category
Unfinished business (1): US banks
In a perceptive “Heard on the Street” column, the Wall Street Journal notes that credit continues to contract, despite government stimulus and Federal Reserve monetary expansion. The Journal says that a more thorough restructuring is needed if the US is to avoid a Japan-style “lost decade”. Bank loans and leases have fallen by 10.5% since the […]
Roubini on financial reform
Here is Nouriel Roubini speaking recently about financial industry reform. Reasonable, and goes further than the legislation currently being proposed. However, I think we need to be skeptical about how much good breaking up the large institutions will do for preventing another meltdown. As long as the productive economy is undynamic, finance will grow relatively; and as […]
Will eurozone crisis go global?
Interesting BBC discussion on the potential global implications of the eurozone crisis, with British economist Philippe Legrain, Italian politician Emma Bonino and Irwin Steltzer of the Hudson Institute. I doubt if enlightened government action is enough to stop economic fallout from the necessary deleveraging. And beyond the short-term crisis, the only way to get over the negative impact of deleveraging is […]
US economy’s artificial growth
James Bianco has an interesting post over at The Big Picture, entitled, “How much economic growth is ‘artificial’?” The answer: a lot. Bianco highlights the findings from the recent Congressional Budget Office report, Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from January 2010 Through March 2010. He concludes […]
Global exposure to European default
There’s more discussion of how the European sovereign debt crisis is global in scope. Tony Barber of the Financial Times writes about a Royal Bank of Scotland report, published on Monday, that suggests that banks outside of southern Europe have much greater exposure than previously thought. RBS estimates that institutions outside of Greece, Portugal and […]
Why Mrs Europe is bashing the bankers
Angela Merkel’s unilateral decision to ban “short selling” shows how deluded and divided the political class is. Read my spiked article in full here.
If you don’t know what to do, ban short-selling
German chancellor Angela Merkel joined the ranks of Western politicians who blame short-sellers for market woes. On Wednesday, the German government acted unilaterally to impose a temporary ban on “naked” shorting – that is, selling shares and bonds that are not owned or borrowed. Specifically, the ban is on sovereign defaults swaps, eurozone government bonds and […]
Crash talk
There’s a lot of talk going around today about an imminent market crash. Get a load of what investor and renowned Dow Theory Letters author Richard Russell has to say (via Pragmatic Capitalism): Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get […]
Will the US gain from Europe’s crisis?
Economist Tim Duy thinks so. Duy says the Eurozone’s problems will be a “net positive” for the US: Bottom Line: The European crisis, by keeping US interest rates in check and oil prices low, may do more to help the US recovery than hurt it. In the process, however, we would expect the flip side […]
Roubini: “new stage in the crisis”
Here is an interview with Nouriel Roubini, conducted by Jon Snow of Britain’s Channel 4 News. Roubini says: We’re at the new stage of the crisis. Initially the crisis was excessive debt and leverage of the private sector, houses and financial institutions. Now we’ve socialised many of the private losses, we’ve put them in the balance sheet of the governments. So […]