Berlusconi insisted that Italy’s economy was broadly prospering.
“The restaurants and vacation spots are always full, nobody thinks there is a crisis,” he said.
Daily Archives: November 4, 2011 @ 1:07 pm (Friday)
Payrolls and a Fed rant
Utter failure of policy.
The Fed was certain it knew what Japan had done wrong and wasn’t going to make THOSE mistakes.
So it
Cut rates much more aggressively.
Said it would do whatever it takes.
Figured out how to do its job as liquidity provider after only 6 months of alphabet soup programs.
Did heaps of Quantitative Easing.
Did the twist.
And now, realizing its done about all it can do, says monetary policy can’t do it all.
And still fails to recognize publicly the actual problem is the budget deficit is way too small.
And doesn’t directly inform Congress that
there is no such thing as a solvency problem,
the Fed controls government interest rates, and not the market,
there is no long term deficit problem with regards to finance,
the only thing we owe China is a bank statement,
Quantitative Easing and rate cuts remove interest income from the economy, which allows the deficit to be that much larger,
etc.
as we continue to go the way of Japan.
Karim writes:
Some improvement around the edges but the larger narrative is employment rising only at a rate fast enough to keep the unemployment rate stable (not higher or lower)
- NFP 80k with net revisions 102k
- Unemp rate down to 9% from 9.1%
- Average hourly earnings 0.2% and aggregate hours 0.1% barely ok for labor income once adjusted for inflation
- Weather may have played a small role as construction employment turned from +27k to -20k
- Diffusion index improved from 56.7 to 60.7; while encouraging in that the majority of industries are adding jobs, doesn’t say or mean they are necessarily adding jobs at an increasing rate
- Other positives are median duration of unemployment falling from 22.2 weeks to 20.8 weeks and U6 measure falling from 16.5% to 16.2%
- Don’t think this would have a big impact on the new Fed forecasts we saw the other day
Noda Makes Consumption Tax Hike Pledge At G-20 Summit
The world’s poster child for losing decades looks to stay a step ahead:
(Nikkei)–Prime Minister Yoshihiko Noda vowed Thursday to gradually raise the nation’s consumption tax to 10% by mid the 2010s during a summit meeting of the Group of 20 leading economies in Cannes, France.
The announcement at the summit has effectively made the tax hike an international pledge, and is expected to be included in an action program due out Friday.
Noda stressed the importance of rebuilding debt-ridden Japanese finances and told G-20 leaders that fiscal consolidation is a must “for Japan to be put back on a sound economic growth path, regardless of the debt crisis in the euro zone.”
He also spoke to reporters that a Diet dissolution should be carried out before implementing the tax hike. “If we go to the people in a general election (to seek a mandate on the consumption tax hike), we should do so after passing related bills but before implementing them,” he said.
As to Japan’s participation in the Trans-Pacific Partnership free trade pact, Noda told reporters he will accelerate efforts to iron out differences within the Democratic Party of Japan, which he leads. “We have to close ranks and shouldn’t be split,” he said.
Noda showed his flexibility in making concessions to a controversial redemption period of reconstruction bonds aimed at funding rebuilding efforts of the March 11 disaster, in hopes of enlisting support from the Liberal Democratic Party and New Komeito, the main opposition parties.
“Our policy chief said that we envisage a 15-year period (for the redemption of reconstruction bonds), but there’s room for concessions,” he said.
Blog Comment on Italy
This was recently posted by a reader:
I’m from Italy so I can answer your question. The general and most accepted ideas in Italy are:
- “The problem is president Berlusconi.”
- “We need structural reforms!” (In every pub people love to say that, to feel themselves intelligent, the same that are in precarious financial conditions.)
- “We are not credible.”
- “We live beyond our means.”
And the best:
- “Without the Euro it would be a catastrophe, fortunately, we have a strong currency.”