asterisk2a + forecast   61

The Bank of England is in denial. Brexit shows people don't act rationally | Robert Skidelsky | Business | The Guardian
Our models of quantifiable risk fail when faced with radical uncertainty. // retail spending binge post brexit and in run-up. // The challenge is to develop macroeconomic models that can work in stormy conditions: models that incorporate radical uncertainty and therefore a high degree of unpredictability in human behaviour. [...] Keynes, for his part, didn’t think this way at all. He wanted an economics that would give full scope for judgment, enriched not only by mathematics and statistics, but also by ethics, philosophy, politics, and history – subjects dropped from contemporary economists’ training, leaving a mathematical and computational skeleton. To offer meaningful descriptions of the world, economists, he often said, must be well educated.
Brexit  UK  consumer  debt  household  credit  card  mortgage  BOE  Austerity  Consumerism  materialism  behaviour  Economics  Economy  rational  book  irrational  living  standard  savings  wage  growth  income  mobility  macroeconomic  forecast  Keynes  history 
february 2017 by asterisk2a
U.K. Faces Short Recession as Brexit Hammers Spending, EY Says - Bloomberg
The U.K. will fall into a “short, shallow recession” around the turn of the year as Brexit hits house prices, jobs and spending [...] it’s slashing its 2017 growth estimate to 0.4% from 2.6% & predicting the BOE will cut interest rates to zero by the end of 2016. Tax reductions are also a possibility [...] as the government scales back austerity to aid an economy reeling from the shock vote to pull Britain out of the [EU]. “We would expect a permanent reduction in the level of U.K. output and productivity.” Business investment will drop 2% next year and the jobless rate will reach 7.1 percent by 2019
GBP  Brexit  British  Pound  recession  ZIRP  QE  austerity  Theresa  May  Philip  Hammond  productivity  productivity  gap  output  output  gap  GDP  business  confidence  consumer  confidence  unemployment  economic  forecast  economic  history  budget  deficit 
july 2016 by asterisk2a
Brexit is a risk to UK growth, says Carney
The Bank of England governor tells the Lords that ‘extended uncertainty’ and an economic slowdown could follow a vote to leave the EU
Mark  Carney  BOE  economic  forecast  George  Osborne  Brexit 
april 2016 by asterisk2a
The economics of Brexit – Politics Weekly podcast
Leave Campaign, so far, has failed to assure voters that we get through the quiet possible tubulences and uncertainty unharmed severely after 1-2 years. [ economic forecasts/predictions are Wall Streets cottage industry ] Brexit for sure would throw Osbornes plan for a surplus in 2020. ... brexit is about less regulation free trade low tariffs, 'get off the back of our City [London bank regulation]' [low tax, higher pay] George Osborne ... // banks have not voiced their voice loudly because that would be seen by people who bailed them out to tune of doubling the deficit, and still own bank shares ie loyds. it could be seen disingenuous, outrageous, as we are still in doldrums, paying off their debt, and suffering through austerity where the most vulnerable are cut away from society.
Brexit  George  Osborne  economic  damage  economic  growth  economic  security  economic  slack  economic  slowdown  economic  harm  macroeconomic  policy  microeconomic  policy  trade  agreement  free  trade  regulation  David  Cameron  Whitehall  Westminster  economic  forecast  Wall  Street  European  Union  Career  Politicians  EEA  free  movement  of  people  immigration  migration  austerity  general  election  2020  general  election  2015  Tories  Conservative  Party  nasty  neoclassical  economics  neoliberal  neoliberalism  Chicago  School  trickle-down  economics  self-regulation  deregulation  regulators  MervynKing  Mark  Carney  BOE  IMF  retail  banking  investment  banking  City  of  London  bank  bailout  GFC 
april 2016 by asterisk2a
Budget 2016: the productivity and prosperity puzzle
It wasn't so much "here's a rabbit from the hat" but more: "look over there - a squirrel!" [...] [Productivity] turned out disappointingly again. And that's knocked back the growth estimates for the economy, as well as for pay, for tax revenue, and for company profits over the rest of the decade.
Britain's not alone in that. But keeping company with the USA on such numbers is not that reassuring. [...] And as that is the main, long-term driver of real pay, it means Britain's standard of living will improve from the recession, but at only two thirds of the rate we've come to expect. [ Recovery ] average year saw only 0.1% per year.
budget2016  OBR  forecast  secular  stagnation  austerity  George  Osborne  Brexit  general  election  2020  Tories  nasty  party  Conservative  Positioning  constituency  Funding  Toff  Career  Politicians  Establishment  Privileged  PIP  tax  code  HMRC  tax  evasion  tax  avoidance  industrial  policy  productivity  gap  productivity  output  gap  income  tax  receipts  job  creation  Service  Sector  Jobs  working  poor  tax  credit  low  income  working  tax  credit  low  pay  wage  stagnation  squeezed  middle  class  self-employment  part-time  Contractor  Zero  Hour  Contract  recovery  economic  history  UK 
march 2016 by asterisk2a
Molly Wood from Marketplace giving insight into market skittishness and investor sentiments - YouTube
value buy (dividends) vs growth stock //&! market triggers & LinkedIn's stock plunge - youtu.be/I9IxYL_xENE //&! youtu.be/9NEYOS3AJsA //&! What are the chances of a market crash? How is today different from 2008? - youtu.be/T1T4z-aEGhw
Wall  Street  Apple  growth  Amazon  economic  history  profit  maximisation  shareholder  value  expectations  forecast  credit  bubble  secular  stagnation  investor  sentiment  emerging  middle  class 
february 2016 by asterisk2a
Osborne's £23bn from the back of the sofa - BBC News
[ from 2010 forecast, deficit should be a surplus by 2016/17 or something like that ] the government's forecaster, the Office for Budget Responsibility, has increased its prognosis of how much the Treasury will raise from existing taxes (not new ones) and reduced what it thinks the chancellor will shell out in interest on its massive debts. In total the OBR thinks the national debt, the aggregate of the annual deficits, will be £23bn lower over the four years to 2020, and just because it is more optimistic about tax revenues and assorted costs. Or to put it another way, George Osborne is today £23bn better off than he thought in July, and without doing anything at all. //&! on.fb.me/1Hq17SP
OBR  UK  forecast  economic  growth  austerity  recovery  budget2015  George  Osborne  David  Cameron  macroeconomic  policy  microeconomic  policy  budget  deficit  general  election  2020  Tories  Conservative  Party  Manifesto  election  campaign  promises  general  election  2015  fiscal  policy  underinvestment  productive  investment  output  gap  productivity 
november 2015 by asterisk2a
BBC News - Met Office three-month forecast was 'not helpful'
In a note to the government chief scientist, the Met Office chief scientist Prof Julia Slingo explains the difficulty of constructing long-distance forecasts, given the UK's position at the far edge of dominant world weather systems. She says last year's calculations were not actually wrong because they were probabilistic. [...] "The creation of the three-monthly outlook relies upon the fact that weather is influenced by the slow variation of ocean conditions (and other processes) which can be predicted months in advance. [...] ,the UK's weather is dominated by the highly variable atmospheric circulation over the North Atlantic, making it much harder to predict what will happen weeks and months ahead." -->> the jet stream "over" UK, just a minor dis-positioning of 1000 miles can change the weather markedly
weather  forecast  complexity  globalwarming  MetOffice  UK  weather  system  weather  extreme  unintended  consequences  butterfly  effect  jet  stream  extreme  weather 
march 2013 by asterisk2a
King adds to gloom over UK economy - FT.com
Sir Mervyn King and other Bank of England policy makers warned MPs on Tuesday that the economic situation had deteriorated so severely that they had ripped-up their forecasts of six weeks’ ago.

In some of his bleakest remarks to date, coming soon after weak public finance figures, he cautioned the public not to think Britain was even half-way through the crisis, which started almost five years ago.

Mr King said, “I have no idea what is going to happen in the euro area”.

“It is impossible to imagine a situation in which you just do not know what the situation will be in a part of the world that is close to you and is half of your trade. And that makes it impossible to engage in any sensible forecasting.”
economy  monetary  policy  ZIRP  QE  BOE  politics  policy  folly  policy  error  uncertainty  forecast  academics  academia  economics  economic  history  economic-thought  economic  model  contagion  EMU  Europe  greatrecession  sovereign  debt  crisis  GFC  UK  MervynKing 
june 2012 by asterisk2a
Bad Models Mistook Housing Bust for Dot-Com Bubble - Bloomberg
The problem with forecasting: it is based on the past, a past model. The world is changing ... every week, every year ...

The problem is that the macroeconometric models used by the Fed -- like those used by the Congressional Budget Office, the White House and others -- had at best a very rudimentary financial sector built into them. As a result, they took into account the macroeconomic impact from the housing bust -- but for the most part didn’t reflect the concentrated loss of wealth and degree of leverage in the financial industry.
In other words, the official models effectively ignored the very distinction that Bernanke highlighted as being crucial to distinguishing the housing collapse from the tech bust. And so the models completely missed the recession’s severity.
economic  model  economist  econometrics  subprime  bubble  dotcom  bubbles  academics  academia  economics  forecast  greatrecession  GFC  economic-thought  economic  history 
may 2012 by asterisk2a
QE3 Or No QE3: The CIA's Take | zero hedge
Further, his clear effort to limit expectations for improvements in unemployment, along with his persistent efforts to focus attention on the longer term, are consistent with his tacit acknowledgement that the FOMC isn’t quite sure what to do at the moment (“a little bit of time to see what is going to happen would be useful to make policy decisions”).
benbernanke  2011  recovery  Fed  monetary  policy  QE-2.0  outlook  forecast  economics 
june 2011 by asterisk2a
UK interest rates 'will not rise until 2013' - BNP Paribas - Telegraph
the Bank of England will achieve little by raising rates from their record 0.5pc low in a bid to rein in the pace of price rises, they argued.
“We do not believe the Bank of England will raise rates this year or next,” said Paul Mortimer-Lee, global head of market economics at BNP Paribas. “There is no point in hiking rates to slow the economy — it’s too slow already and fiscal consolidation will stop it from overheating.“The only reason for a rate hike is to keep inflation expectations and wage rises down. [But] unemployment is already subduing wages.”Mr Mortimer-Lee holds that one-off shocks — rises in the global cost of oil and food, a fall in the pound and the recent rise in VAT — explain away much of the UK’s inflation problem. That should mean CPI inflation will fall quickly next year as these factors ebb away, ending 2012 around the 2pc target.
BOE  ZIRP  monetary  policy  2011  inflation  interestrate  UK  economy  growth  outlook  forecast 
june 2011 by asterisk2a
Euro will break up in next five years, economists say | City A.M.
THE Eurozone is likely to be broken up within the next five years as southern European countries struggle to grow as part of the single currency, a new forecast from an economics consultancy will claim today.
Analysis from CEBR will show that without a euro break-up, growth in southern Europe – including Spain, Portugal and Greece – will be below 1.5 per cent in every year to 2015.
The latest forecasts came as European finance ministers debated the structure of a potential €120bn (£106bn) rescue paskage for Greece, which is widely expected to be the first country to exit the euro as it struggles to remain competitive amid stringent austerity reforms.
“Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency as Greece pulls out, probably followed by other countries,” said Douglas McWilliams, chief executive of CEBR.
PIIGS  economics  economy  growth  outlook  austerity  forecast 
june 2011 by asterisk2a
Standard Chartered: "Three Factors Will Drive Gold To $5,000" | zero hedge
The limited supply comes at a time when central banks have completely changed their tune on selling down their gold stocks and now appear likely to accelerate their net buying programmes. China is way behind the curve. Currently, only 1.8% of China’s foreign exchange reserves is in gold; if the country were to bring this proportion in line with the  global average of 11%, it would have to buy 6,000 more tonnes of gold, equivalent to more than 2 years of gold production. We believe that these factors – limited gold production, buying by central banks and increasing demand from India and China – can potentially drive the  gold price to US$5,000/oz, as highlighted in our commodity team’s earlier report." And what according to Std. Chartered is the best way to capitalize on this undervaluation: "We believe the best ways to invest in the gold cycle are buying physical gold (a safe asset) or investing in junior gold miners...
http://www.scribd.com/doc/57833659/In-Gold-We-Trust-061411
gold  centralbanks  Fed  PBoC  fiat  currency  outlook  forecast  monetary  policy  monetization  2011 
june 2011 by asterisk2a
Boots UK sees slow sales as KKR stays on | City A.M.
 tough conditions look set to persist.
“Looking to the year ahead, we are planning for consumer demand to be subdued and expect governments to continue to seek ways to contain growth in healthcare expenditure,” he said.
retail  UK  outlook  forecast  economy  disposable  income 
may 2011 by asterisk2a
The Complete Overview Of The Setting Economy Of The Land Of The Setting Sun | zero hedge
Increasingly we have come to believe that the real marginal economy over the next several quarters will be neither that of the contracting US, nor that of the rapidly tightening, yet still very much inflationary China, but the (arguably) third largest one: that of Japan. Over the past month we have suggested that in addition to already latent deflationary tendencies, the recent post-earthquake collapse will require a dramatic, and very political intervention in BOJ monetary policies (here and here), in order to avoid a global contraction. Yet as David Koo proposed yesterday, the (infra)structural changes will demand an overhaul so profound that the contraction will be not only severe but likely very extended due to spillover effects into energy commodity demand, thus creating a non-virtuous feedback loop. So for those who are still new to the Japan story, below we present an extended presentation compiled to scare even the most optimistic fan of the land of the setting sun.
Japan  economy  2011  outlook  forecast  economics  policy  monetary  fiscal  sovereign  debt  earthquake  fukushima 
may 2011 by asterisk2a
Ministers admit family debt burden is set to soar | Politics | The Observer
But experts expressed alarm. The Nobel prize-winning economist Paul Krugman, writing on his blog, said: "People have been digging into the details of the government forecast and finding that it relies on the assumption that household debt will rise to new heights relative to income.
"Why? Because the only way the economy can avoid taking a hit from government cuts is if private spending rises to fill the gap – and although you rarely hear the austerians admitting this, the only way that can happen is if people take on more debt."

 "This is the downside of the chancellor's deficit reduction plan. As tax increases and public spending cuts squeeze households' disposable incomes, they will be forced to take on more and more debt in an attempt to maintain their living standards.
UK  austerity  2011  2012  budget  economy  private  public  debt  borrowing  outlook  forecast  recovery  living-standard 
april 2011 by asterisk2a
Europe's Failing Health - WSJ.com
The statistics paint a bleak picture. According to the Organization for Economic Cooperation and Development, the European Union will see an increase in health expenditure of 350% by 2050, whereas at the same time the economy is only set to expand by 180%.
Some work has already been done to estimate the real impact on future expenditures. Friedrich Breyer, a professor of economics at the University of Konstanz in Germany, calculates that in Germany alone between 2020 and 2030 there will be a huge spike in the number of elderly people alongside an enormous drop in young and working-age people. "This will mean a dramatic increase in individuals' payroll tax contribution rates to health care to 20.7% in 2030 and over 23% in 2040," he says. This compares to just 11.4% in 1980.
healthcare  economics  aging  population  elderly  demographics  change  outlook  forecast  crisis  politics  taxation  NHS  UK  reform  freemarkets  debate 
march 2011 by asterisk2a
4 Reasons Home Prices Are Likely To Keep Falling : Planet Money : NPR
It will probably be a long time before prices get back to the heights of the bubble. A study last year looked at more than a dozen financial crises from the past century, and found that home prices tend to remain below their bubbly peaks during the entire decade after each crisis.
USA  subprime  property  2011  outlook  economics  housing  forecast  history  bubble 
february 2011 by asterisk2a
On Rick Santelli's "Meet The Press" Appearance, A $113 Trillion Future Rounding Error, And The Metamorphosis Of The American Dream To A Nightmare | zero hedge
And now for some facts: On February 28, 2001 George Bush said this about his 2002 Budget: “It will retire nearly $1 trillion in debt over the next four years.” Instead, US debt, which at that point was $5.7 trillion, rose to $7.7 trillion. $3 trillion rounding error? Also in the same budget, Bush predicted a $5.6 trillion surplus over the next ten years, which would wipe out all of America's debt by 2011. The latest debt figure was $14.1 trillion. A $14.1 trillion rounding error, or a nearly five fold increase in "rounding errors" in a decade. At this point, the 2021 total debt (including insolvent Social Security) is expected to be $24 trillion. Applying the same rounding error variance to government "projections" means... $113 trillion in debt?
Most jarring, total US Debt to GDP will be over 100% in under 6 months. Paging Reinhart and Rogoff...
USA  sovereign  debt  gwbush  barackobama  presidency  crisis  outlook  projection  forecast  timgeithner  budget  2011  2010  2012  GDP  KennethRogoff 
february 2011 by asterisk2a
Fat Lady Wanted as Guide to Fed Rate Setters: Caroline Baum - Bloomberg
The Fed has econometric models that predict growth and inflation (they’re silent on asset bubbles). It relies on something called the output gap, or the difference between actual gross domestic product (hard to compute) and potential GDP (a moving target), to warn of inflation on the horizon. It monitors headline and core inflation (lagging indicators). It pays a lot of attention to inflation expectations as reflected in the spread between yields on nominal Treasuries and those indexed to inflation. And it keeps a close eye on wages, which are the biggest input cost for service-producing industries.
output-gap  2011  2010  unemployment  USA  Fed  econometrics  inflation  outlook  forecast 
february 2011 by asterisk2a
Will QE2 Impact Equity Market Fundamentals: Consensus And Fringe Views | zero hedge
" Furthermore, Goldman's economic team has already priced in $1 trillion of QE2 in its 2011 GDP forecast of 1.8% (below consensus of 2.5%), meaning at worst the overall economy will continue to operate at negative growth rates,

The bullish argument for equities goes as follows: (1) The Fed buys longdated Treasuries to reduce term premium and lower interest rates across the maturity spectrum; (2) The low yields penalize individuals and corporations who hold cash; (3) individuals and institutional investors re-allocate their savings into higher risk instruments such as equities, high yield bonds, emerging market debt and equity, and commodities; (4) firms pursue new capital spending initiatives and boost employment; (5) asset price inflation has a wealth effect and spurs retail spending; (6) a consequence of lower US interest rates is a weaker US Dollar which benefits US exporters and also stimulates some incremental domestic job growth.
QE-2.0  Fed  2010  2011  GDP  outlook  forecast  QE  monetary  policy 
october 2010 by asterisk2a
Is China's Growth Rate Destined To Be Cut In Half? | zero hedge
A new report by MainFirst Bank provides more ammo to the China bears. In "Why China's Growth Rate May Halve" author Bijal Singh has a very gloomy forecast on the country's growth rate, concluding it may "struggle to grow faster than 6%, given that China is now fully employing the vast bulk of its available urban labour force, and given that the Chinese working age population has stopped growing and is on a declining path."

So, China’s GDP growth is likely to range between 4% and 6%. It is of course possible for China to grow faster, but that would trigger inflation, and possibly political unrest. The Authorities mantra for the future may be “moderate, non-inflationary growth”.
China  outlook  forecast  GDP  growth 
october 2010 by asterisk2a
Pimco's El-Erian Says Industrial Economies Risk `Lost Decade' - Bloomberg
Advanced economies risk a “lost decade” unless policy makers recognize the severity of the wounds left by the financial crisis, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co.

El-Erian, who popularized the phrase “new normal” to describe how growth will be depressed by consumer retrenchment and financial regulation, said governments and central banks haven’t detected the “ongoing paradigm shift” in their economies that will require remedies beyond stimulus programs. Among the fault lines he spots are strained balanced sheets, persistently high unemployment and a misunderstanding of financial markets.

“Having won the war, industrial-country societies are in the process of losing the peace,” El-Erian said in a speech yesterday in Washington during the annual meetings of the International Monetary Fund and World Bank. “If they are not careful, they risk slipping into a lost decade of low growth, high unemployment and welfare destruction.”
new-normal  greatrecession  creditcrunch  USA  2010  2011  2012  barackobama  presidency  economy  lostdecade  Japan  GDP  outlook  forecast 
october 2010 by asterisk2a
On The Ever Increasing Inconsistencies In Reported Economic Data | zero hedge
One can easily draw the conclusion from the data that we have dodged a bullet. But that does not mean we are out of the woods. Employment is a coincident indicator. Leading indicators, such as the ECRI, continue to deteriorate and to levels still consistent with nontrivial double-dip risks. Keep this in mind — private payrolls came in at +97,000 in November 2007 and the “Great Recession” began the next month. In other words, the +67,000 tally we saw today basically tells you nothing about how the pace of economic activity is going to unfold as we move into the fall.
economics  NBER  economic  forecast  outlook  greatrecession  recession  USA  unemployment  indicators  inventory  2010  2011  double-dip 
september 2010 by asterisk2a
Global monetary policy: The central bankers' burden | The Economist
At one end are those, including the OECD and the Bank for International Settlements, who give warning that a prolonged period of ultra-low interest rates risks inflation and resurgent risk-taking (see article). At the other are those who side with the IMF, which last week prescribed a course of fiscal retrenchment for the world, softened with a commitment by central banks to extended easy monetary policy and perhaps even more expansion of their balance-sheets.

Who’s right? The rich world does not seem to be on the precipice of deflation. Among the 18 forecasters surveyed monthly by The Economist, none expects deflation in any big economy next year save Japan. Yet that is a far cry from saying that central banks need to shift their attention to inflation. In fact, inflation in 2011 will be lower than this year, the OECD and IMF agree. In most countries it will be well below 2%, a level thought to provide about the right buffer against deflation.
deflation  inflation  OECD  IMF  BIS  2010  2011  japan  usa  Europe  forecast  recession  depression  monetary  fiscal  policy  risk  double-dip 
july 2010 by asterisk2a
China's chief auditor warns mounting local government debt a risk to economy - Telegraph
Mr Liu said the ratio of debt to disposable revenues at some local governments was over 100pc and in the highest case it was 365pc.
He said the audited debts of 18 of China's 22 provinces, together with 16 cities and 36 counties amounted to 2.79 trillion yuan (£279bn) in 2009.
Victor Shih, a professor at Northwestern University in the United States, believes the sum in 2009 was 11.4 trillion yuan, equivalent to 71pc of China's nominal GDP.
Next year, he is forecasting government debt to hit 96pc of gross domestic product as infrastructure projects continue to eat up cash and produce negligible returns.
"The worst case is a pretty large-scale financial crisis around 2012," he said. "The slowdown would last two years and maybe longer," he added.
China  debt  bubble  economy  outlook  forecast  recession  2010  2011  2012  global 
july 2010 by asterisk2a
Schuldenkrise: Warum Deutschland Europas größter Krisenprofiteur ist - SPIEGEL ONLINE - Nachrichten - Wirtschaft
Kein Euro-Land ist so stark von seinen Ausfuhren abhängig wie Deutschland. Der Export sorgt für 45 Prozent der deutschen Wirtschaftsleistung. Zwar gehen rund 60 Prozent der deutschen Exporte in die Euro-Zone. Doch Firmen, die ihre Waren etwa in Asien oder USA anbieten, können dies nun zu günstigeren Preisen tun.

"Wettbewerbsfähig sind die meisten deutschen Unternehmen ohnehin, so dass die jüngste Abwertung des Euro für echte Preisvorteile im außereuropäischen Ausland sorgt", sagt Stefan Schilbe, Chefvolkswirt bei HSBC Trinkaus. Durch jahrelange Lohnzurückhaltung habe Deutschland die Wettbewerbsfähigkeit zurückgewonnen, die es seinerzeit durch eine zu harte Währung eingebüßt hatte.
Germany  recession  Euro  EMU  PIIGS  may  2010  economy  Europe  competitiveness  competitive  export  double-dip  outlook  forecast  stockmarket 
may 2010 by asterisk2a
Op-Ed Columnist - The Euro Trap - NYTimes.com
But that’s a much harder thing to do now than it was when each European nation had its own currency. Back then, costs could be brought in line by adjusting exchange rates — e.g., Greece could cut its wages relative to German wages simply by reducing the value of the drachma in terms of Deutsche marks. Now that Greece and Germany share the same currency, however, the only way to reduce Greek relative costs is through some combination of German inflation and Greek deflation. And since Germany won’t accept inflation, deflation it is.

The problem is that deflation — falling wages and prices — is always and everywhere a deeply painful process. It invariably involves a prolonged slump with high unemployment. And it also aggravates debt problems, both public and private, because incomes fall while the debt burden doesn’t.

Hence the crisis. Greece’s fiscal woes would be serious but probably manageable if the G...
germany  greece  EMU  europe  infaltion  deflation  monetary  policy  fiscal  2010  outlook  forecast  debt  creditcrunch  creditcrisis  paulkrugman  politics  bailout 
april 2010 by asterisk2a
Economic Correction: Too Much Danger on the Downside
That the Great Correction continues…and that there is far more danger on the downside than there is reward on the upside.
Barron’s Big Money Poll tells us that bonds are the most detested asset class. Frankly, we don’t like them either. But the Great Correction will eventually take a whack at stock prices…and real estate prices…and commodity prices…
…bonds could be the only major asset to escape!
The big money could be dead wrong…just as the small money is almost always wrong. Bonds might go up as the de-leveraging continues.
We’ll wait to see what happens…
outlook  forecast  usa  recovery  2010  greatrecession  deleveraging  april 
april 2010 by asterisk2a
Barack Obama: “if we keep on adding to the debt… that could actually lead to a double-dip” - Credit Writedowns
It has opted for a third Herbert Hoover solution:

The Hoover Status Quo. decreasing aggregate demand and precipitating a double dip recession in order to reduce government deficits. This would cause a wave of defaults and decrease debt burdens through bankruptcy and debt repudiation. Meanwhile they will try to prop up zombie companies and maintain malinvestment. This would simultaneously prevent the private sector from decreasing debt burdens through increased savings and maintain dependency on foreign sources of capital – all without ending the spectre of big government.
we are witnessing crony capitalism on a massive scale. The problem with the liquidation scenario is a lower standard of living and the prospect of geopolitical tension, social unrest, poverty, and war.

The Herbert Hoover solution we are now using leads to a Japanese outcome at best or a Great Depression outcome at worst.
barackobama  economics  public  debt  bubble  outlook  forecast  trend  presidency  recovery  greatrecession  greatdepression  japan  private  revolving  history 
april 2010 by asterisk2a
Don't Blame Unemployment Extension for High Jobless Rate - Real Time Economics - WSJ
San Francisco Fed chief Janet Yellen warned earlier this month the unemployment rate may only tick down to 9.25% by year’s end, before heading to a still high 8% by the end of 2011. If she’s right, that suggests the problem of extended unemployment will be an enduring one. Economists and legislators alike will have to confront again the issue of unemployment insurance, both as a lifeline and as coddling element.
unemployment  forecast  outlook  usa  benefits  recession  recovery  2010  2011  2009  study  research  academia 
april 2010 by asterisk2a
Economist Warns of Public Bubble - Real Time Economics - WSJ
The U.S. economy has traded a public bubble for a private one, according to this forecast by California forecasting firm Beacon Economics.

The firm’s stance is that the $787 billion federal stimulus package and the Federal Reserve’s near-zero interest rates have propped up the economy but will prove unsustainable and are actually exacerbating some of the imbalances that led to the recession. “The nation seems to be trading in its private bubble for a public one, swapping one set of unsustainable economic drivers for another,” the report said.
bubble  public  debt  deficit  budget  usa  2010  outlook  forecast  benbernanke  interestrate  private  treasuries  stimulus  housing  TARP  toxicassets  losses  accounting  property  inflation  savings  consumption  package  greatrecession  recovery  double-dip  recession  deflation  richardkoo  KennethRogoff 
april 2010 by asterisk2a
Economists React: ‘The Consumer Is Back’ - Real Time Economics - WSJ
Overall recent retail sales reports indicate the U.S. consumer may have emerged from the financial crisis with fewer scars than we had feared. While we are not revising our medium-term consumption forecasts at this time, we would certainly acknowledge that the latest data point to upside risks. –Zach Pandl, Nomura Global Economics
consumption  consumer  spending  retail  usa  2010  march  april  outlook  forecast  recovery  greatrecession 
april 2010 by asterisk2a
Consumer Borrowing Fell $11.5 Billion in February - CNBC
The Federal Reserve said Wednesday that borrowing declined by $11.5 billion in February, surprisingly weaker than the small $500 million gain that economists had expected. The February decline was the 12th decrease in the past 13 months as consumers slash borrowing in the face of a deep economic recession and high unemployment.

The February weakness reflected a sizable 13.6 percent drop in revolving loans, the category that includes credit card debt, and a smaller 1.6 percent decline in nonrevolving loans, the category that covers auto loans.

A revival in consumer borrowing and spending is seen as crucial to providing support for the overall economy, which is still struggling to emerge from the worst recession since the 1930s.
borrowing  consumer  debt  private  recovery  2010  usa  revolving  spending  consumption  benbernanke  outlook  forecast 
april 2010 by asterisk2a
FT Alphaville » The next leg of the great bear market has begun…
Balance sheet repair and prudence are the new drivers of the bus, in turn driven by The People (the private sector).
austerity  usa  policy  error  recovery  recession  greatrecession  outlook  comment  2010  2011  forecast  dollar  europe  china  markets  financialmarket  UK  debt  public  private  savings 
february 2010 by asterisk2a
China's economy: Not just another fake | The Economist
China’s property market is certainly hot. Prices of new apartments in Beijing and Shanghai leapt by 50-60% during 2009. Some lavish projects have much in common with those in Dubai—notably “The World”, a luxury development in Tianjin, 120km (75 miles) from Beijing, in which homes will be arranged as a map of the world, along with the world’s biggest indoor ski slope and a seven-star hotel.

Chinese households’ total debt stands at only 35% of their disposable income, compared with 130% in Japan in 1990.
china  japan  2010  2011  outlook  forecast  1980  bubble  debt  public 
january 2010 by asterisk2a
Why Niall Ferguson is still bearish - The Globe and Mail
The stock market rally has been largely due to near-zero interest rates and a weaker dollar. In foreign currency terms there's been no rally.

Excessively loose monetary policy causes asset bubbles and excessively loose monetary policy is what we have now. It's a little early to start pointing figures and calling things ‘bubbles,' however. Many prices are simply returning to their trend growth line after the collapse that occurred a year ago.
NiallFerguson  VAT  USA  2010  2011  2012  debt  economy  outlook  forecast  ZIRP  bubble  dollar  DOW  rally 
november 2009 by asterisk2a
Koalitionsgespräche: Schwarz-Gelb droht gigantisches Haushaltsloch - SPIEGEL ONLINE - Nachrichten - Politik
Deutschen Instituts für Wirtschaftsforschung (DIW) ist der Sparbedarf des Bundes nahezu doppelt so hoch wie vom Kanzleramt angegeben. Der Leiter der Abteilung Staat beim DIW, Viktor Steiner, beziffere den einzusparenden Betrag bis 2013 auf mindestens 75 Milliarden Euro, berichtet die "Bild"-Zeitung in ihrer Dienstagausgabe. "Die vom Kanzleramt genannten 40 Milliarden Euro sind aus unserer Sicht zu niedrig." Nach DIW-Schätzungen müssten Bund, Länder und Gemeinden bis 2016 jährlich 50 bis 75 Milliarden Euro einsparen, mehr als die Hälfte davon müsse der Bund leisten.
.
"Der Höhepunkt wird im Winter 2010/2011 erreicht. Da werden wir 4,5 Millionen Arbeitslose bekommen."
DIW  germany  debt  government  public  FDP  election  hartz-IV  future  generation  2009  unemployment  forecast 
october 2009 by asterisk2a
Ex-Fed chief says economic downturn's end is near - News Wires - CNBC.com
Former Federal Reserve chairman Alan Greenspan says the economic downturn is not quite over but that the end is nearing.

Greenspan says that the health of the financial system has improved significantly. He says the collapse of the financial system is "off the table" after the system teetered for a while.
alangreenspan  forecast  2009  recession  USA 
august 2009 by asterisk2a
Double-Dip Recession Still in the Picture: Roubini - Economy * Europe * News * Story - CNBC.com
The United States, Europe and Japan still face the possibility of a double-dip recession and at the very least will experience below-potential economic growth for the next couple of years, economist Nouriel Roubini told CNBC Monday.
NourielRoubini  recession  2009  roubini  forecast  outlook  china  economics  economy 
august 2009 by asterisk2a

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