The unrelenting economic decline in China is finally getting the attention of economists and the media as something more than a big problem “for them.” Imports declined by 18.8% in October after having contracted by 20.5% in August. On the export side, Chinese goods sent abroad fell 6.9% year-over-year in dollars which confirms that the contraction is not China’s alone [...]
For those inclined to see only the positive side, the current downdrift in at least manufacturing globally still holds no special distinction. Either it is to be dismissed as a trivial concern unconnected to the “real” economy or, more blatantly, it doesn’t matter because it only means more “stimulus.” Thus, the positive side can never lose as every negative account [...]
Stocks rallied strongly last week in response to comments by Mario Draghi that signaled a willingness, a determination in fact, to engage in more monetary stimulus. In fact, Draghi seemed to promise - once again - to do "whatever it takes", offering to consider "a whole menu of monetary policy instruments" in saying that the ECB was now "vigilant". One [...]
While on the other side of the Pacific economists try to decipher what China has truly gotten itself into, over the Atlantic the Europeans are admitting that trillion is again not “enough.” As I have written repeatedly, the adjectives attached to QE depend on the tense. Ahead of time, peering into the unwritten future, QE “will be” powerful and able, [...]
Concurrent to more survey-based indications of a US manufacturing slowdown, economists have been quick to blame overseas problems such that it leaves a “strong” US economy as a baseline. On the other side of that equation, China’s manufacturing likewise is rapidly declining but somehow with the same point of blame. Both Chinese PMI’s were decidedly weak, with the private version [...]
The Japanese economy sank yet again, more than suggesting there is no recovery from the “inflation”-led recession that began six months before any tax change. Almost right from the start of QQE, Q4 2013, Japan’s GDP has either been contracting or barely rising. The net result is the monetary hole left behind by so many flawed theories. Primary among them, [...]
The problem with sentiment surveys is, as I am becoming a broken record, that they don’t often mean what they are taken to mean. At best, they are relative measures of changes and potentially, if captured and refigured just right, inflections. With innumerable problems encapsulated into not just their construction but the idea of a PMI in the first place, [...]
In looking through the CBO’s litany of economic projections, past and present, I wrote yesterday that the major economic problem started to become clear by what was missing. The main orthodox models all view economic potential in much the same fashion, as if the economy exists completely upon a curve of inflation and employment, whereby the intersection of those two [...]
Leave it to a self-described socialist to undermine his own argument. Decrying the apparent overabundance of personal hygiene and fashion, presidential candidate Bernie Sanders took to confounding as to how many ways evil capitalism could produce odor-altering products but leave so many so hungry. You don't necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs [...]
Austerity has become a loaded concept, not the least of which has been tied to the very growing desire of issuers of past policies to delink them with our current situation. Primary among those is Ben Bernanke who has taken to blogging as a sort of obvious attempt at rehabilitation. Last week, I think, he really came out the worst [...]
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