Scary to see that world wide debt has increased by $57 trillion since the financial crises. Maddening that it would take only $16.5 trillion for the world to meet Paris climate change targets. Infuriating that rich people are hiding $26.5 trillion in offshore accounts, and that the wealth of the 1% is $127 trillion.
2018/09/13: The current global expansion will likely continue into next year, given that the US is running large fiscal deficits, China is pursuing loose fiscal and credit policies, and Europe remains on a recovery path.
But by 2020, the conditions will be ripe for a financial crisis, followed by a global recession. There are 10 reasons for this.
Come 2020, the stage will be set for another downturn and, unlike in 2008, governments will lack the policy tools to manage it.
The space for fiscal stimulus is already limited by massive public debt. The possibility for more unconventional monetary policies will be limited by bloated balance sheets and the lack of headroom to cut policy rates. And financial-sector bailouts will be intolerable in countries with resurgent populist movements and near-insolvent governments.
2016-02-19: Rising raw-materials prices are typically bad news for most stocks. Not any more.
the crisis took years to emerge. It was caused by reckless lending practices, Wall Street greed, outright fraud, lax government oversight in the George W. Bush years, and deregulation of the financial sector in the Bill Clinton years. The deepest source, going back decades, was rising inequality. In good times and bad, no matter which party held power, the squeezed middle class sank ever further into debt.
In 2018, many of those root causes remain, making another economic downturn or collapse possible.
2009/10/06; The stock market rallied today because of a slightly better than expected ISM Services number. Considering how much ‘stimulus’ the government has given to the FIRE sector it should be doing slightly better than the real economy.
Another reason the market rallied in New York today was a bullish call on the banking sector by a Goldman Sachs analyst.
Here is a somewhat different analysis of the situation by Chris Whalen of Institutional Risk Analytics. Chris believes that he sees strong evidence that the fourth quarter in the banking industry is going to be a bloodbath.
2017/11/22: I want to tell you a story of economics, love, and death. Kind of a Romeo and Juliet parable for the modern age, where the protagonist are societies, not people, who made a kind of suicide pact
2012/09/10: It's been four years since the U.S. launched a massive bailout of the financial system and the auto industry. While much of the bailout money has been paid back, the government still owns large shares in companies such as AIG and GM, and has yet to recoup some $200 billion in bailouts. Here's a breakdown by industry.
The book "Nomadland" reveals the dark, depressing life of driving from one low-wage job to another.
Now here is what sounds like a New York Times headline to celebrate: "Dire Poverty Falls Despite Global Slump, Report Finds." That report would be a 6-page World Bank briefing note, the press release for which is titled: "New Estimates Reveal Drop in Extreme Poverty 2005-2010." Echoes The Economist: "
2017/09/27: Many young homeowners in booming cities owe more than they earn, and some even falsify salary details to get bigger mortgages.
“Chinese banks typically allow homebuyers to use up to half of their monthly incomes to repay mortgages,” said Julia Fan, a former state bank manager. “But the market in cities like Shenzhen and Shanghai is full of buyers whose out-of-pocket property spending is much more than their actual monthly salaries.”
Bill Duan, a manager at a Chinese investment bank, said it was not unknown for Chinese buyers to exaggerate their salaries or use fake payslips when taking out mortgages and loans, “and this may be when the problem starts”.
“It’s known among industry insiders that local branches of the banks in many cities do not always double-check salary details with employers, even though the applicants offered salary certificates for several times the city’s average wages,” he said.
2016/01/12: a story that passed largely unnoticed in our American world. Sitting atop some of the planet's great oil reserves and getting 73% of their revenues from oil sales (income that dropped by 23% last year), the Saudi royals just hiked the domestic price of gas at the pump by 40%. Though it still remains dirt cheap by global standards, that act -- which is like charging for salt water in the middle of the ocean -- is an indication that something startling is going on. And note that, in the years to come, that kingdom's rulers are planning to cut back on similar subsidies for “electricity, water, diesel, and kerosene.” In other words, the world’s largest oil producer and a country of striking wealth (and foreign reserves) no longer feels comfortable giving away gas to its own population, even though this is part of a bargain it struck long ago for peace in the kingdom.
And the reason for this has little to do with Iran or Syria or Yemen or Iraq or the Islamic State. The problem is far more basic, as TomDispatch’s resident energy expert Michael Klare points out today. It’s the price of oil, which in the last 18 months has dropped through the floor. In a sense, the oil business -- with its constellation of giant energy firms, until recently among the most profitable companies in history, and its energy-producing states, until recently riding high -- may prove to be the natural-resource equivalent of a failed state, and, as Klare makes clear, the changing economics of oil will transform the political face of the planet. So keep your eye on Saudi Arabia. Things there could get ugly indeed.
Il meeting annuale del Fondo Monetario Internazionale, in corso proprio in questi giorni a Lima (Perù), vedeva già nelle fasi preliminari la grande preoccupazione di Christine Lagarde (che guida il Fondo dal 2011) causata dal progressivo "raffreddamento" dell'economia globale iniziato già' nella seconda metà dell'anno scorso. Madame Lagarde non ha fatto mistero di voler verificare, per ora
Without us noticing, we are entering the postcapitalist era. At the heart of further change to come is information technology, new ways of working and the sharing economy. The old ways will take a long while to disappear, but it's time to be utopian
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The 'death of peak oil' has been much exaggerated, writes Paul Mobbs. Take out high-cost 'unconventional' oil and production peaked ten years ago, and even North America's fracking and tar sands boom has failed to open up new resources both big enough to make good the shortfall, and cheap enough to reward investors. We really do need to be thinking 'beyond petroleum'.
2015/04/29: The case for cuts was a lie. Why does Britain still believe it?
The austerian ideology that dominated elite discourse five years ago has collapsed, to the point where hardly anyone still believes it. Hardly anyone, that is, except the coalition that still rules Britain – and most of the British media.
I don’t know how many Britons realise the extent to which their economic debate has diverged from the rest of the western world – the extent to which the UK seems stuck on obsessions that have been mainly laughed out of the discourse elsewhere. George Osborne and David Cameron boast that their policies saved Britain from a Greek-style crisis of soaring interest rates, apparently oblivious to the fact that interest rates are at historic lows all across the western world. The press seizes on Ed Miliband’s failure to mention the budget deficit in a speech as a huge gaffe, a supposed revelation of irresponsibility; meanwhile, Hillary Clinton is talking, seriously, not about budget deficits but about the “fun deficit” facing America’s children.
Is there some good reason why deficit obsession should still rule in Britain, even as it fades away everywhere else? No. This country is not different. The economics of austerity are the same – and the intellectual case as bankrupt – in Britain as everywhere else.
The United States risks sliding into the abyss of economic crisis, Ron Paul warned, pointing out that "there is a huge bubble with the dollar.
There is an odd cadence to the debate on the National Security Agency spying on user data supplied by social media companies like Google and Facebook, as...