RSS feedStimulus
’Chinese decoupling, meet Chinese stagflation
This China decoupling thing was never really going to take off, was it?
From Bloomberg:
China’s economy is highly likely to slow next year and efforts to spur growth will be constrained by inflation and government debt burdens,
Don’t even look at China for help
Chinese premier Wen Jaibao threw some shade on the eurozone on Wednesday, and the US too — insisting they get their own fiscal and monetary houses in order and recognise China as a market economy if they really want to see some investment.
Aliens to save the global economy
Alternative working title: When Orson Welles meets finance.
We discussed Fantasy Fed options on Wednesday. But here’s one from Paul Krugman, which we definitely overlooked — ironically, possibly the most fantastical of all.
Are US banks turning Japanese?
An important question given struggling financial stocks, a stalling US economy, US public sector cuts and concerns over the impotence of QE3. Take your pick, really.
Fortunately it was also a question tackled Friday morning in a special conference call hosted by Nomura’s US banking analyst Brian Foran,
Further further reading
For the commute home, where there is often such a thing as too much information, like the government warning on your favourite bottle of scotch,
- US IPO filings reach 2007 levels.
- When there’s no such thing as too much information.
Some circumstantial copper evidence
Sean Corrigan, chief investment strategist at Diapason Commodities, was the first to detect a correlation between China’s loose monetary policies and copper prices. His basic finding; the greater the amount of loans extended in China,
Government shutdown, economy slowdown?
Well, it’s a start.
The FT reported Monday evening that the House of Represenatives will on Tuesday vote on a two-week continuing resolution (CR) that funds the federal government through March 18 and reduces FY 2011 discretionary authority by $4bn.
QE counter-factuals and counter-arguments
Here’s a pop quiz for macro fans: Federal Reserve asset purchases were equivalent to an X hundred basis point reduction in the federal funds rate and contributed Y million jobs. What are X and Y?
In a recent paper on zero lower bound events and the impact of quantitative easing,
Stimulating, selectively and statistically significantly
The tax cut package is proving stimulative already – at least in terms of encouraging debate in the wonkosphere.
We continue to share the unoriginal view that extending the tax cuts for those earning above $250k will not provide the best bang to buck ratio.
Taxes in wonderland
It takes all the arguing you can do to keep in the same place.
Apologies to Lewis Carroll (who knew a thing or two about bizarre worlds) but after nearly a decade of wrangling, Washington looks like it may decide to retain all of the Bush tax cuts.
Magnus vs Donovan: The emails
Here’s an interesting promo for the new book by UBS senior economic adviser, George Magnus.
To drum up a bit of attention for ‘Uprising: Will Emerging Markets Shape or Shake the World Economy?’ the Swiss bank has released a selection of internal emails between UBS economists (that would be Paul Donovan and Magnus,
Depressant or stimulant?
The inflation/deflation debate has recently morphed into a new form: The austerity/stimulus deadlock.
Some (Paul Krugman, ahem) believe rushing into austerity measures at this point could be a dangerous move.
The end of Japan’s balance-sheet recession
Strong praise for the new Japan prime minister, Naoto Kan, from one Richard Koo.
In his latest note, Nomura’s chief economist thinks the former finance minister literally “saved” the Japanese economy in 1998,
Teun’s tightening tactics
Teun Draaisma’s latest is a veritable treatise of tightening threats.
In it, Morgan Stanley’s chief European strategist warns of the impending switch from stimulus-overload to stimulus-withdrawal — something he’s mentioned before but,
China’s baozi economy
Qin Xiao, chairman of China Merchants Group and of the Asia Business Council, is worried.
He is worried about China — and specifically whether the Chinese authorities will be able to extricate themselves from their loose and stimulus-heavy monetary and fiscal policies of recent months.
Slow US recovery blamed on low demand
Weak demand from battered consumers will be a “major constraint” on the US economy for the foreseeable future, key White House adviser Lawrence Summers said on Monday. Mr Summers, the director of the National Economic Council,
Yesterday it was banks, now it’s cash-for-’fill-in-the-blank’
If the term “cash for clunkers” festooning just about every news website, TV programme and newspaper is starting to drive you mad, think again.
Not since before the financial crisis has a chunk of US government spending been ushered through with so little opposition,
China’s metallic grab
China has released the details of its long-awaited “metal consolidation plan”, which basically amounts to a stimulus/nationalisation package for non-ferrous metal producers in the PRC.
From Steel Guru:
State by state stimulus
From an FRBSF article, showing funds received vs projected 2010 state budget gaps.
Some states, like New York, appear to be making profits while others, like California and Connecticut, look to be in much tighter spots (H/T Econbrowser).
A 15,400,000,000,000 yen boost
This might be a stupid to ask, but when you are talking 14 figures to the left of the decimal point, how does a fiscal stimulus package arrive at 15.4 trillion – rather than 15 or 16?
No matter. Japan on Thursday came out with its biggest stimulus package yet,
The graphic global stimulus
From UBS, showing size of fiscal stimulus against interest rates.
Making the most ‘stimulised’ economies: South Africa, Singapore and China.
China: ‘Can I supersize my stimulus?’
Expectations are growing China could super-size its stimulus package when it votes on the budget next week, especially since the draft currently being considered already foresees a record-breaking fiscal deficit for the country in 2009 of some 950bn yuan (higher than previously expected).
Hire American, or, no foreign bankers for you
Remember the Buy American clause of the proposed economic stimulus?
Meet Hire American.
Apart from the Buy American provisions restricting government spending to US companies, other items in the bill could also give cause for alarm.
Australia’s stimulus redux, this time it’s for real
Okay, okay, so we spoke too soon. Australia’s Senate on Friday pulled a swiftie to pass a A$42bn ($27.4bn) economic stimulus package that it had blocked the day before, following frantic overnight negotiations that landed a vital extra vote to enable the government to override opposition from conservative parties.
Wall Street: not impressed
A financial stability plan – $2 trillion
An economic stimulus – $838bn
Watching Wall Street’s reaction – priceless
Geithner’s plan has not impressed. Light on detail and loaded with caveats, it’s also managed to circumvent the thorny issue of pricing toxic assets.
Rescuing banks, then Treasuries
Yields on US Treasuries are continuing to rise — despite the best efforts of the US to keep them down.
Monument Securities’ Stephen Lewis has this to say about it today:
US policymakers need to take the Treasuries market’s behaviour seriously.
Introducing the ‘submerging markets’ of the UK, US
Mavercon blogger and former Bank of England MPC member Willem Buiter is back with an interesting view of the UK and US positions in the current financial crisis. In fact, he coins a whole new economic classification for them – behold the ‘submerging markets’.
Buy American
“We may likewise diminish our importations, if we would soberly refrain from excessive consumption of forraign wares in our diet and rayment, with such often change of fashions as is used, so much the more to encrease the waste and charge;