Monthly Archive:: January 2013

a word on the euro, US deficit doves, and Japan

As previously discussed, the euro looks to keep going up until the trade surplus reverses. Problem is the strong euro doesn’t necessarily cause the trade surplus to reverse, at least not in the short term. But it does tend to work against earnings and growth. And there’s nothing the ECB can do ...Read More

Confidence Index decreased to 58.6

Not conclusive but a bit of evidence the FICA hike is beginning to take a toll. From Gail: The Conference Boards Consumer Confidence Index decreased to 58.6, the weakest since November 2011, from a revised 66.7 in December January 29 — Says Lynn Franco, Director of Economic Indicators at The Conference Board: ...Read More

Japan’s debt approaches 1 quadrillion yen

Debt approaching 1 quadrillion, and the highest as a % of GDP anywhere I know of, and still no bond vigilantes in sight! Who would have thought??? Not to mention decades of 0 rates, massive QE, and in general the BOJ trying as hard as it can to inflate. Maybe it’s not ...Read More

from Karim: January looks ok so far

Agreed with Karim. So far no signs of actual damage from the FICA hike. Even bonds now indicating same. The problem is personal- it’s hard for me to fathom FICA going up that much without some meaningful damage to GDP. So I remain on the sidelines pending more Jan data. ICSC 3% ...Read More

Email exchange on balanced budget multiplier

>    >   (email exchange) >    >   Hi Warren, I’m a bit confused over one point. MEMMT says that only govt deficits (or an >   external sector like foreign) can inject NFAs into nongovt. So if govt runs a balanced >   budget over the years the NFAs left to nongovt will net to 0. >    Yes. >    ...Read More

Monti Proposes More Than EU13.5 Billion in New Tax Breaks, Cuts

The headline is promising but the details don’t read at all well. Italy needs aggregate demand/spending/sales/ouput/employment. Cutting corporate taxes does precious little of that, especially over 5 years beginning 2014. And tax cuts ‘paid for’ by spending cuts tend to reduce demand overall as well, as does fighting tax evasion. And there’s ...Read More

Draghi Says Conditions Considerably More Favorable Than Last Yr

As previously discussed, looking like deficits high enough for stability and even modest growth, albeit with output and employment at tragically low levels, if they don’t further tighten fiscally. It didn’t have be this way. They could have increased deficits pro actively vs via austerity. Also, their ‘automatic fiscal stabilizers’ are very ...Read More

No ‘Massive Mark to Market’ Event for Bonds This Year: Friesen

No ‘Massive Mark to Market’ Event for Bonds This Year: Friesen By Madeleine Lim Jan. 23 (Bloomberg) — While “shortage of yield” will provide support for stocks, unlikely to see “great rotation” out of USTs and investment-grade bonds this year, III Associates principal and Co-CIO Garth Friesen said in interview yesterday. Growth ...Read More

Breakthrough tech from public support

Where Good Technologies Come From ...Read More

Shirakawa Leaves Onus on Abe for Stimulus as Action Deferred

Monetary doesn’t do the trick in any case. If this leads to a larger fiscal adjustment give him credit for the assist, intentional or not. Shirakawa Leaves Onus on Abe for Stimulus as Action Deferred By Toru Fujioka & Isabel Reynolds January 22 (Bloomberg) — The Bank of Japan (8301)’s decision to ...Read More