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’Chinese New Year and the BDI
Should you be worried about the Baltic Dry Index’s recent sharp selloff? Or should you be more worried about developments in China?
We bring this up because there is apparently somewhat of an après-Chinese New Year effect when it comes to the Baltic Dry Index.
Don’t worry, it’s normal for China’s GDP to appear a little weird
Still confused by China’s better than expected GDP numbers? (Especially given stories like this, and this, and this?)
You’re not the only ones.
Standard Chartered’s Stephen Green and Lan Shen, however,
Post-euro economies, charted
Crystal-ball charts via Mark Cliffe of ING (click to enlarge):
We lay emphasis on “crystal ball” given the long time-frame ING has employed, and the intense difficulty in quantifying the damage which complete break-up would cause to cross-border trade and so on.
Not even in Japan…
Whatever is decided at the Save the Euro summit, it seems certain the eurozone is heading into recession.
But not just any recession, this will be a protracted one reckons Citigroup.
Our economists believe the sovereign debt and banking crises are causing a renewed recession in the Euro Area.
Equities, Japan and next decade
Morgan Stanley’s Graham Secker makes some interesting observations in his 2012 outlook report.
Chief among them is that the investment framework of the last 25 years is increasingly irrelevant and that Japan offers the best guide to what might happen in the equity market over the next decade.
Europe’s grand bargain
Some required reading for us all.
Published in September, the authors of this Occasional Paper, who include Jurgen Stark, spell out their ideas for the future of widely abused Stability and Growth Pact.
UK GDP – As good as it gets?
From the Office for National Statistics on Tuesday:
GDP growth of 0.5 per cent in third quarter. A reasonable pace?
Not really. In fact, there’s good reason for thinking this is as good as it gets for some time to come.
A Goldman guide to the monetary policy playground
Goldman Sachs welcomes you to the modern world.
The US bank has put out a primer on “‘unconventional’ unconventional policies” to guide us through the maze of recent central bank moves from ‘operation twist’ to UK QE2 and the imposition of a minimum rate for the EUR/CHF exchange rate by the Swiss National Bank.
Q3 GDP increased 2.5%
You’ve been waiting with greedy anticipation as analysts ratcheted up their estimates in recent weeks following that August-September period in which we all thought the US economy was sinking back into the abyss.
Ignorance is not bliss: it can ruin your economy
Or, why national accounting issues threatened to send an econo-blogger into a nihilistic vortex of swirling epistemological doubts.
Last week, introducing our interview with the Federal Reserve’s Jeremy Nalewaik about the flaws in measuring economic output,
Compare and contrast – Italy and the UK
First the caveat. The following is written by the chief economist of a big Italian bank. So you can be forgiven for thinking “he would say that, wouldn’t he.”
But Unicredit’s Erik F Nielsen is surely onto something when asks why Italian funding costs are sitting above 5 per cent while investors demand just above 1.6 per cent to lend to the UK government.
The case for GDI: a Q&A with Jeremy Nalewaik
Here’s one for the methodology nerds.
Jeremy Nalewaik is a staff economist at the Federal Reserve who specialises in macroeconomic statistics. His name first came to our attention earlier this year when we read this post at Freakonomics by Justin Wolfers,
The BBB recovery
An early morning helping of doom and gloom, courtesy of Morgan Stanley, which has cut its global growth forecast for 2011-12 by a full percentage point.
The bank – one of the more bearish houses on the Street – reckons the US and Europe are dangerously close to recession because of fiscal tightening and policy blunders,
Dear Mr Chancellor [updated]
It’s letter writing time again at Threadneedle Street.
In truth there’s not much to see in Tuesday’s inflation report from the Office for National Statistics.
Yes, the CPI number is little bit higher than consensus (4.3 per cent) but the RPI number is bang in line with expectations.
Snap news
Breaking pre-market news on Tuesday,
- German GDP slows more than expected in the second quarter, dropping to 0.1 per cent — statement.
- Straumann cuts guidance; cites impact of Swiss franc — statement.
Safe haven alternatives, London property edition
As FT Alphaville and others have duly noted, the search for the ultimate safe haven alternative is on.
RBS now points to one possible alternative, London luxury-home prices.
From their European rates morning research note:
The Fed’s 1.6 trillion ‘somethings’
Chris Cook, strategic market consultant, entrepreneur and commentator, likes to push boundaries when it comes to financial thinking.
He’s at it again on Tuesday in the Asia Times.
UK GDP *pass*
The preliminary estimate of second quarter UK GDP is out, and it’s bang in line with expectations.
And the ONS says quarter-on-quarter growth could have been as high as 0.7 per cent without several “special factors”.
What’s wrong with Greece bailout II…
… in three easy-to-read paragraphs.
From Jacques Cailloux and his team at RBS.
1. Greece Bail Out II now detailed, rolling crisis still likely: The Euro Summit was first and foremost a summit aiming at concluding the negotiations surrounding Greece Bail Out II.
On the matter of misvalued Chinese land
Phew..! What a relief.
The Chinese danger is no more.
As we all know by know, data released on Wednesday categorically confirmed that Chinese growth had defied recent tightening measures by monetary authorities and continued on track in the second quarter at 9.5 per cent (thus saving the world).
Goldman Sachs is hot for soybeans
The latest ‘Commodity Watch’ note from Goldman Sachs continues to paint a bullish picture for most of the commodities complex in 2011 and 2012.
The usual Goldman arguments about how global growth, fueled by Asia,
About that Chinese inflation rate
With China hiking interest rates by 25 basis points on Wednesday, reportedly to counter faster inflation, now is probably a very good time to bring up the issue of the country’s GDP deflator calculation.
Postcard from the Pyrenees
Bears are endangered and misunderstood. Here in the French Pyrenees, with only some 20 left in the wild, the authorities have been trying to introduce some Slovakian bears to the mountains to beef up the population.
Stall speed
FT blogger (and Markets Live contributor) Gavyn Davies recently raised the question of whether the growth rate of the US economy had dropped below stall-speed and was heading back to recession.
He concluded it wasn’t,
Yet to emerge from the depths
This blogger isn’t a fan of the oft-made analogy between the US economy now and the Japanese economy of the early 1990s — an analogy normally used to analyse the possibility of the US facing a similar Lost Decade.
On the brink of a British double-dip
Dramatic, we know. But the ONS has confirmed the economy grew only 0.5 per cent in 2011′s first quarter after its 0.5 per cent fall in 2010′s last three months, and technically…
…That’s also already confirming a double-dip in GDP in absolute terms over the period,
Goldman warns of significant China slowdown
More on those China slowdown fears, which played a part in Monday’s sell-off.
Goldman Sachs has cut its China GDP estimates for this year and next, citing concerns about weaker US growth, higher oil prices (more on that to follow — but the broker now sees Brent at $130 a barrel in 2012) and of course inflation:
Japan’s ‘temporary’ recession?
The news from Japan on Thursday reinforced some of the worst fears about the state of the economy, but not everyone is gloomy — far from it — although the latest growth figures are truly horrible.
As the FT reports:
More on Q1 GDP
Our thoughts are below, but for reference you can click to enlarge these two charts. The first, via RQD Economics, shows the change in each of the categories that contribute to the GDP number:
The second,