The Center of the Universe

St Croix, United States Virgin Islands

MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Archive for December 10th, 2009

Updated: 7 Deadly Innocent Frauds

Posted by WARREN MOSLER on 10th December 2009

Link:

Seven Deadly Frauds of Economic Policy (June 17, PDF Link)

Order 7 Deadly Innocent Frauds of Monetary Policy
$19.95 and Free Shipping in the Continental US!


Posted in Banking, Books, China, Congress, Credit, Currencies, Deficit, ECB, Economic Releases, Employment, Equities, Exports, Fed, GDP, Housing, Inflation, Interest Rates, Mosler 2012, Proposal, Published, Tea Party | 449 Comments »

Sweden

Posted by WARREN MOSLER on 10th December 2009


[Skip to the end]

Notice the order of importance with the reasons given for the recovery.

Unemployment still over 8%.

Fiscal seems well targeted (with the possible exception of employment?).

Swedish Unemployment Falls as Economic Recovery Continues

By Johan Carlstrom

Dec. 10 (Bloomberg) — Swedish unemployment fell in November after the economy grew for two consecutive quarters, boosted by record-low borrowing costs, recovering demand for its exports and a government stimulus.


The non-seasonally adjusted rate, as measured by the number of people claiming benefits, fell to 5.3 percent from 5.4 percent the previous month, the Stockholm-based Public Employment Service said in a statement on its Web Site today. The median estimate of seven economists surveyed by Bloomberg was for the rate to stay at 5.4 percent.


The economy will probably grow a “few notches” faster than the government forecast in November, Finance Minister Anders Borg said last week. The government on Nov. 9 raised an earlier forecast and expects 2 percent growth next year and 3.4 percent in 2011 after a 4.9 percent contraction this year.


Unemployment will peak at 10.7 percent next year, about a year earlier than previously forecast, the government said in November. Industrial production missed analysts’ estimates in October as it fell for a third consecutive month.


Sweden emerged from its first recession since 1992 in the second quarter on resurgent trade demand and record-low borrowing costs. The government has cut taxes and raised
spending on schools, hospitals and roads to boost the economy after the worst economic decline since World War II. The central bank cut its benchmark interest rate to 0.25 percent in July.


Sweden’s unemployment rate, as measured by a survey conducted for Statistics Sweden, fell to 8.1 percent in October from 8.3 percent the previous month.


[top]

Posted in Employment | No Comments »

China News

Posted by WARREN MOSLER on 10th December 2009


[Skip to the end]

Sounds like the risk is that China starts judging it’s lending on finance rather than further public purpose.

Interesting how both are discussed.

HIGHLIGHTS

China’s central bank says to manage credit pace after lending spree

Survey indicates better job prospect

Banking authority reitertates credit quality, pace control

China’s currency regulator to promote trade balance

China’s central bank says to manage credit pace after lending spree
(Xinhua)
Updated: 2009-12-09 13:14

China’s central bank said on Tuesday that more efforts would be made to keep credit expansion in reasonable pace after record lending to echo government’s call to rebalance economic growth pattern.

More credit support should go to promote employment and industries of strategic importance, said Zhou Xiaochuan, governor of the People’s Bank of China.

The central bank would continue to implement the moderately easy monetary policy in 2010 to ensure stable and relatively fast economic development, Zhou said.

The move was in response to the directives of the annual Central Economic Work Conference, which was concluded Monday agreeing to advance economic structure adjustment to lift the quality and efficiency of economic growth.

The central bank would exert more strength to beef up rural development and stimulate domestic demand, as well as enhance balance of payment, and hold down potential financial risks, Zhou said.

Chinese banks lent a record 8.92 trillion yuan ($1.31 trillion) in the first ten months, far exceeding the government’s target of 5 trillion yuan for this entire year, prompting fears of bad loans and unprofitable investment.

Survey indicates better job prospect
By Wang Xiaotian and Ding Qingfen (China Daily)
Updated: 2009-12-09 07:52

Wu Liwei, a postgraduate major in journalism from Renmin University of China, has been trying to find a job for some time. And though the 24-year-old is yet to get a satisfactory offer, Wu said yesterday that she still felt lucky and hopeful.

“Next year looks better than even this year,” Wu said. “A friend who majored in the same subject last year said many big companies had stopped recruiting then.”

But this year, staff from a lot more companies, including big names, visited her university for campus recruitment. “I have attended about 10 such recruitment fairs, and many of my classmates have got offers. I am waiting for the right one,” she said.

Most university graduates like Wu feel the same. And it’s true that China’s recruitment prospects are better now than last year or early this year.

Buoyed up by the ongoing economic recovery and domestic consumption, the willingness of potential employers to hire people in 2010 will be stronger than this year, with companies in second-tier cities showing greater interest, a Manpower survey released yesterday said.

According to the survey, conducted by the world’s leading employment service provider, 19 percent of the potential employers said they would hire people in the first quarter of next year – 2 percentage points higher than in the fourth quarter of 2008, and also the highest since late last year.

Those who aim to cease recruitment in the next quarter add up to only 5 percent of the total, 1 percentage point lower than in the previous quarter and the lowest in a year.

Manpower has done such quarterly recruitment studies in China for five years. This time, it interviewed 4,317 enterprises from home and abroad for the survey.

“Actually, the recovery helped improve China’s labor market from the second quarter of this year,” said Danny Yuan, managing director for Manpower China. “Now, employers are more confident of hiring people next year,”

Xu Zhixue, senior consultant with Beijing-based Zuoyou Consulting Group, a leading local human resource service provider, corroborated Yuan.

Zuoyou’s clients are usually big State-owned enterprises (SOEs) in telecom, aerospace and mining sectors, such as Beijing Mobile. “They (SOEs) were worried over the economic trend and most of them had scaled back their recruitment,” Xu said.

“But since the last quarter, they have recovered their confidence. Now, we are much busier than before,” he said.

China’s economy began showing strong signals of recovery in the third quarter of this year, with GDP growth reaching 8.9 percent. Decline in exports began easing off, too, and the sector is expected to have taken to the growth trajectory in late 2009.

According to Manpower, employers in the finance, insurance and real estate sectors could be the biggest recruiters next year, with the mining and construction industries registering the fastest growth in the past quarter.

The survey also shows employers in cities like Chongqing, Xi’an, Qingdao, Wuhan, and Suzhou expect to see a stronger hiring environment than their counterparts in major cities. top

Banking authority reitertates credit quality, pace control
(Xinhua)
Updated: 2009-12-09 13:25

China’s banking authorities vowed to step up efforts to improve credit quality, and keep credit expansion in reasonable pace after record lending, to echo government’s call to rebalance economic growth pattern.

Chairman of the China Banking Regulatory Commission Liu Mingkang said bank loans should play a bigger role in economic restructuring as he put it the regulator would strictly control lending to industries that were energy-intensive, polluting and had overcapacity.

More credit support should go to promoting employment and industries of strategic importance, Zhou Xiaochuan, governor of the People’s Bank of China told an insider meeting.

The central bank would continue to implement the moderately easy monetary policy in 2010 to ensure stable and relatively fast economic development, Zhou said.

The move was in response to the directives of the annual Central Economic Work Conference, which was concluded Monday agreeing to advance economic structure adjustment to lift the quality and efficiency of economic growth.

The central bank would exert more strength to beef up rural development and stimulate domestic demand, as well as enhance balance of payment, and hold down potential financial risks, Zhou said.

Chinese banks lent a record 8.92 trillion yuan ($1.31 trillion) in the first ten months, far exceeding the government’s target of 5 trillion yuan for this entire year, prompting fears of bad loans and unprofitable investment.


[top]

Posted in BRIC, China | No Comments »

Chinese economist sounds off on US monetary policy

Posted by WARREN MOSLER on 10th December 2009


[Skip to the end]

Right, this is the nonsense that’s been moving the speculators and portfolio managers, but not the underlying fundamentals.

If an asset inflation does materialize it will be for an entirely different reason.

>   
>   (email exchange)
>   
>   On Wed, Dec 9, 2009 at 2:03 PM, wrote:
>   

Yesterday, U.S. Fed Chief Ben Bernanke declared the U.S. economy is facing “formidable headwinds” and effectively vowed to continue printing paper dollars like there’s no tomorrow.

The reaction from China came quickly, as Andy Xie, recently named by BusinessWeek as one of China’s most influential economists, pulled no punches.

Xie accused the Fed chief of “poisoning” the U.S. economy by keeping interest rates near zero and creating a tidal wave of newly printed paper dollars. He warned that the next global crisis will be driven by asset inflation.


[top]

Posted in BRIC, CBs, China | 6 Comments »