In late summer last year, just in time to accompany the first blast of contraindicated economic reality, Statistics Canada announced that Canadian GDP had contracted in Q2 2015. That followed an “unexpected” drop in Canadian GDP in Q1 which was supposed to be like oil prices and only a “transitory” deviation on the road to ultimate monetary policy success. Even [...]
There was a robust debate inside economics earlier in the recovery period over Okun’s “Law”, the seemingly stable relationship between the unemployment rate and real GDP. The Great Recession was stunningly large in terms of the skyrocketing unemployment rate given that initial estimates for real GDP were bad but not as catastrophic. This was more than a theoretical problem for [...]
If there is any doubt as to the confusion inside the FOMC, one needs only to examine its models. The latest updated projections make a full mockery of both monetary policy and the theory that guides it. Ferbus and the rest don’t buy the labor market story, either, which is why the Fed can only be hesitant at best about [...]
Last week the Federal Reserve updated its quarterly Financial Accounts of the United States Z1 (formerly Flow of Funds) meaning that we can recheck valuation levels of the stock bubble from alternate points of view (data). The most common valuation given by the report is Tobin’s Q which compares the estimated value of corporate equities (liability) to nonfinancial corporate business [...]
During the global end of the Great Recession, Brazilian GDP contracted year-over-year in just three quarters. The worst was about -2.5% in Q1 2009, but by Q1 2010 GDP was rising 9% again. With the latest update today, Brazil’s GDP declined by just less than 6% year-over-year in Q4, representing the seventh consecutive contraction that doesn’t look to be ending [...]
As I often write, in Japan it is far more difficult to hide the failure of “stimulus.” There are varying degrees of visibility in that regard around the QE world, but they all share negative redistribution as the base alloy. That’s why Janet Yellen may be merely uncomfortable and Mario Draghi increasingly brooding, but Haruhiko Kuroda was just pushed to [...]
The advance estimate for Q4 GDP was not appreciably different than the preliminary figures, changing +0.6% into +1.00033%. It wasn’t anywhere close to enough of a revision to meaningfully alter the picture of the 2015 economy. The average growth in 2015 was just 2.40% (until the next revision next month) compared to 2.43% in 2014; while the average of SAAR [...]
I wrote last week about the OECD’s sudden alarm over global growth “flatlining” but I think it important and relevant to further emphasize why. If you go back only to June last year, their economic outlook for the world sounds distinctly familiar. The OECD has cut its global economic growth forecast for this year but says it expects lower oil [...]
If the US consumers and attendant “demand” had been relatively weak entering 2015 producing even at that point questionable conditions that are now admitted as a manufacturing recession, it is increasingly clear that “something” changed around the middle of the year. Obviously, market turmoil that had been largely focused overseas suddenly swung internally to capture US markets once though invulnerable, [...]
As China, Japan is the definition of insanity. GDP fell 1.4% in Q4 2015, marking the fifth contraction out of the past nine quarters and yet the word “stimulus” remains attached to QQE, the Bank of Japan and Abenomics in general. At this point, how much more time and sample size is necessary before calling it a failure? In about [...]
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