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’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,
GBP, GDP and HSBC
Stagflation or not, sterling has responded positively to Wednesday’s GDP release.
From Reuters:
It looks like some punters were expecting a weaker reading and have been caught short. That and the fact that the dollar has fallen sharply against several major currencies (not just sterling) ahead of the FOMC decision and subsequent press conference.
Putting the ‘stag’ in stagflation
Abstracting from the snow
We have an economy
On a plateau
That’s the (Haiku-ised) verdict of Joe Grice, chief economist of the Office of National Statistics, on Wednesday’s UK GDP release.
Down 0.5 per cent one quarter,
Japan, nuclear accident upgrades, economic downgrades
It was a sobering start to Tuesday, after an equally sobering Monday evening punctuated by strong tremors in Tokyo and the northeast, followed by yet another big aftershock and many more nasty tremors throughout much of Tuesday.
The UK’s vanishing productivity (and the data’s gone too)
FT Alphaville loves data mysteries — and there’s something particularly ironic about fourth-quarter UK productivity data not being, erm, produced on time.
Anyway, the UK’s Office for National Statistics said earlier this week that the Q4 productivity numbers scheduled for Wednesday would be delayed until April 7 because of “data quality issues.”
Further further reading
For the commute home, where your liquidity should never be abruptly halted,
- Why the growth rate matters.
- The Apollo IPO price to be launched today.
- Free Exchange vs Money Supply.
- Scatterplot du jour.
One step from high yield – Portugal
More on Tuesday’s downgrade of Portugal (and, to a lesser extent, Greece) from the excellent Harvinder Sian at RBS.
He reckons S&P are spot on with their decision to cut Portugal to BBB- (with the ratings outlook negative) and says there a real risk of a downgrade to junk.
A very special collapse in world trade
How big the fall in world trade in 2008/2009?
THIS big:
According to a new discussion paper published by the Federal Reserve global merchandised trade volumes contracted by a massive 19 per cent during the crisis.
[Gavyn Davies] The world’s economic centre of gravity
Danny Quah at the London School of Economics has recently released a complex but interesting article on the world’s economic centre of gravity.
What’s that?
The author defines it as the spot within the globe which represents the “average location”
[Gavyn Davies] What Osborne did today
So what did the Chancellor actually do today to change macro-economic strategy in the UK Budget?
In one important sense, he seems to have done little or nothing. The path for the structural budget deficit has been left almost exactly the same as it was after the 2010 Budget.
[Gavyn Davies] A very big day for UK economic strategy
This is a very big day for the UK economy, with the MPC minutes at 10.30am [GMT] and the Budget at 12.30pm, so I am going to kick off with that.
I wrote a commentary on UK macro economic strategy for the FT on Wednesday,
SocGen on a ‘reasonable worst case scenario’ at Fukushima
It’s a worse-case scenario — Japan’s “slow motion” Chernobyl.
But not necessarily an unreasonable one.
And Societe Generale’s Friday research is based on comments from UK chief science officer professor,
Goldman sees no earthquake impact on Japan’s GDP
Proving that not even a natural catastrophe and a potential nuclear meltdown can dent Goldman’s unerring global financial optimism — Goldman Sachs has published a Q&A concerning the potential economic effects of Friday’s quake and tsunamis.
China’s Japan syndrome
For those wondering about the wider implications of Japan’s earthquake crisis, don’t go too far. Consider how it will impact China — the country’s top trading partner.
BNP Paribas took a closer look at the effects of ruptured trade flows between the two countries on Monday.
Elasticity *alert* — or, at what point demand destruction?
Bank of America Merrill Lynch is out with a whopper of an oil note on Monday.
Amongst other things, it makes a number of bold predictions, least of all this:
Libya could well be the 8th largest supply shock since 1950
Which brings the team at BoAML,
China as global No 2 – now it’s official
It may sound similar to our earlier post, last August — but this time, it’s really, really official, even “historic” as some US media reports claim. China has decisively and definitively become the world’s No.
GDP growth and equities: a match made in… nowhere?
The Atlantic spots an interesting outlook piece from the Goldman Sachs private wealth group, which argues there is a “negligible, if not zero” chance the US will suffer a Japan-style lost decade (or two).
Irish bank bond haircuts by the numbers
With talk of haircuts for holders of senior Irish bank bonds swirling among politicians and the market, here’s a number-laden note from Goodbody Stockbrokers.
The Irish house has crunched some bond-specific figures in a blockbuster piece of research sussing-out Ireland’s debt sustainability.
Why bank capital is rubbish
How much bank capital is just enough bank capital to survive a crisis?
Reading this Bank of England paper on the issue, you might think the authors are simply arguing that banks ought to be made to hold more loss-absorbing capital (double,
China: Unstoppable powerhouse, or ‘more like us’?
Yes it might well be China’s year, or decade – or century, for that matter. But for now, at least, it’s China’s week, with leader Hu Jintao’s visit to the US generating a frenzy of deals and media coverage.
China: it is big and it is clever
America, an apology: perhaps we were too quick to worry about the 47 per cent of you that believe China is the world’s foremost economic power.
They may have read this cogent post from Peterson’s Arvind Subramanian,
China’s crouching commercial paper, hidden loan targets
As western commercial paper continues to wither, the eastern stuff is on the up.
Bloomberg wrote on Friday about surging commercial paper sales in China — as companies tap the short-term paper instead of getting loans from banks:
European fiscal forecast fail
Surprise! EU members aren’t that good at economic forecasting.
And they’ve only gotten worse in the recent debt crisis.
That’s the take from Fitch Ratings who reckon that between 2000 and 2010 European governments have on average underestimated their three-year fiscal deficits and their public debt by 1.8 per cent and 3.4 per cent of GDP,