In our previous post, we looked at which sectors of the US economy tend to be responsible for contractions in real output. After toiling away in table 1.5.2 of the National Income and Product Accounts, we produced this chart:
Despite accounting for less than a fifth of economic activity on the eve of the last downturn, changes in spending on residential construction, business investment in equipment, and household consumption of durable goods accounted for basically all of the decline in real GDP, just as they did in 1973, 1980, and 1990. Read more
BoE governor-to-be Mark Carney made a speech titled ‘Guidance’ last night. It was all about communications strategies, for both companies and central banks — a very interesting topic for students of monetary Jedi tactics.
Carney stressed at the beginning that his talk would be about guidance, and not containing guidance. Tee hee! However, he did drop the N-bomb and when a central bank governor talks in positive terms about a non-mainstream monetary policy framework, it’s… interesting. Read more
We already discussed at length the evolving and (yet again) disappointing relationship between jobs and profits growth, along with the not-so-anomalous-in-context swings in productivity growth these past few years.
But it’s worth mentioning one more time given this morning’s crapadocious jobs report and the start of earnings season on Monday. Read more
Israel’s central bank had just cut interest rates at pixel time on Monday, easing by 25bps to a 2.25 per cent policy rate.
Why’s this one so important, we hear you ask. Read more
1. The central bank bashing doesn’t start and end with Bernanke.
Central banks just about everywhere make fantastic political punching bags, and the popularity of this tactic is growing. For example:
Chart via Citigroup, bouncing off the latest UK GDP revisions downward (hat-tip Bond Vigilantes):
Having floated the idea that the Federal Reserve should target a nominal level of GDP, Goldman’s top economist Jan Hatzius is none too pleased that Ben Bernanke shot the suggestion down in Wednesday’s post FOMC presser.
He’s not happy with Bernanke’s response that the benefits of the Fed’s current framework — by which he means the Taylor Rule — have been demonstrated because he thinks the Chairman could do so much better. If only he would listen to Goldman: Read more
Anything Lord Wolfson can do…
LONDON, Oct 19 (Reuters) – A leading British businessman is offering a 250,000 pound ($390,000) reward for economists who can come up with the best plan for countries to quit the European single currency zone. Read more
Yes, we know what happened today: gold down, dollar up, 10-year Treasury yields climbed to 2.30 per cent.
We heard. Jeeeeest a bit less room for Bernanke to let us down on Friday. Read more