10 Things People Still Get Wrong About the Financial Crisis All are the result of bias, ignorance, laziness or bad faith. Bloomberg, September 14, 2018 One of the most intriguing aspects of the 2007-09 financial crisis is how little understanding there is of what actually occurred. Some of this has to do… Read More The post What People Still Get Wrong About the Great Financial Crisis appeared first on The Big Picture.
Michael Hudson discusses the economic impact of not writing down debts in the wake of the crisis.
Why you should take conventional wisdom about the Lehman collapse and the crisis with a fistful of salt.
Central banks need to stop fighting the last war.
Follow the subsidies, and you will understand why we had the crisis and why not enough has been done to prevent a recurrence.
An in-depth look at Marriner Eccles' ideas and policies, and how well they have withstood the test of time.
Central banks have not always been independent, inflation targeting bodies, and to treat them as such is to obscure their complex histories and alternative institutional constellations.
This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning. Today we look at White House efforts to restart trade talks with China, a rush of central bank activity, a hawkish signal from the Fed, and (maybe not really) record household income in the U.S. A LITTLE MORE CONVERSATION The Trump administration asked China for a fresh round of trade talks later this month. The invitation from Treasury Secretary Steven Mnuchin comes as some White House officials said they sense a new vulnerability—and possibly more flexibility—among Chinese officials pressured by U.S. tariffs, Lingling Wei and Jacob M. Schlesinger report. It also follows a steady rise in political pressure on President Trump to ease up on trade fights ahead of November elections. No guarantee: Chinese officials have grown wary of the Trump administration’s unpredictable decision-making process and may Continue reading "Real Time Economics: The Trump Administration Reaches Out To China"
The chief architects of the exercise in looting otherwise known as the post-crisis rescues are back promoting more of the same.
This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning. Today we look at the latest trade rumblings, rising wages and signs of inflation, and the Federal Reserve’s efforts to get ahead of the next crisis. MADE IN THE U.S.A. OR ELSE. President Trump threatened tariffs on pretty much all Chinese exports to the U.S., China’s trade surplus with the U.S. hit another record, and the president told Apple to start making its products in the U.S. to avoid potential levies on Chinese-made goods. Phew. It’s going to be another eventful week. Quick recap: the U.S. has already imposed 25% tariffs on $50 billion in Chinese goods, another $200 billion is teed up, and Mr. Trump Friday said tariffs on yet another $267 billion in tariffs are ready to go and could Continue reading "Real Time Economics: Trade, Tariffs, Apple and Inflation. It’s Going To Be Another Busy Week"
In their 21st-century role as counterparty/dealer/insurer of last resort, central bankers must not simply use their balance sheets indiscriminately to provide a liquidity backstop during the downturns. They must embrace this counterparty role as an umpire, rather than an enabler.
The Labor Department releases its monthly snapshot of the nation’s labor market Friday. Economists surveyed by The Wall Street Journal expect it to show employers created 192,000 jobs in August and that the unemployment rate fell to 3.8% from 3.9% a month earlier. Here are five things to look for in the report. 1. Declining jobless rate Watch for the unemployment rate to tick down for the second straight month–and don’t rule out the possibility the jobless rate falls to 3.7%, the lowest level since 1969 during the Vietnam War. Jobless claims, a proxy for layoffs, have remained at historically low levels, a signal of labor-market strength. 2. Hiring to regain steam Hiring will likely pick up after a July slowdown. Employers have added an average 215,000 a month to payrolls this year, above the average 184,000 jobs added in the comparable prior-year period. July payrolls Continue reading "Five Things to Watch in the August Jobs Report"
This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning. Today we look a the latest on Nafta talks, the U.S. manufacturing boom, clouds on the horizon for automakers, Australia’s 27-year economic expansion, and Amazon’s membership in an exclusive club. YO, CANADA The U.S. and Canada are going to try to salvage the North American Free Trade Agreement this week. Canadian Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer meet in Washington to try to bridge differences on a range of issues and maintain three countries in an updated pact, Paul Vieira and William Mauldin write. The pressure is on Canada: The U.S. and Mexico already agreed to terms, and the Trump administration is threatening more tariffs. Members of Congress want Canada to stay in the pact. Mexico wants Canada to remain. Canada Continue reading "Real Time Economics: U.S., Canada Try Again On Nafta | American Factories Are Humming | Amazon Tops $1 Trillion"
Good Morning! In today’s issue, the bull market in stocks becomes the longest in history, the U.S. delays auto tariffs to give diplomacy a chance, and in China “reach for yield” takes on dangerous new dimensions. THE BULL MARKET BREAKS A RECORD Today the bull market becomes the longest in history. It’s 3,453 days since the S&P 500 hit its low of 666 on March 9, 2009. It has since quadrupled, and on Tuesday briefly set an intraday high before closing at 2862.96. The market owes its longevity to the depth of the crisis that preceded it and central banks’ response: an unprecedented stretch of near-zero interest rates. Can it continue? True, valuations look stretched: columnist Jason Zweig notes stocks are trading at about 32.8 times long-term average earnings, adjusted for inflation, nearly twice their typical level since 1881. But with real bond yields less than 1%, valuations don’t look unsustainable. There’s
Continue reading "Real Time Economics: Record Bull Market | Auto Tariffs | Chinese Savers"
Good Morning! In today’s issue, we look at how an independent central banker has benefited Russian president Vladimir Putin, Trump’s criticism of his own central bank appointment, tariffs on China and a challenger to Japan’s Prime Minister Abe. PRESIDENTS AND CENTRAL BANKS, RUSSIA EDITION Why isn’t Russia experiencing an economic crisis? Like Turkey it is run by an autocrat who meddles extensively in the economy. Like Venezuela, it is highly dependent on oil revenues. And like both it has been battered by U.S. sanctions and tariffs. The most important reason may be central bank governor Elvira Nabiullina. As Anatoly Kurmanaev writes, President Vladimir Putin has given her remarkable autonomy to combat inflation and close weak banks. As a result, inflation is at a post-Soviet low of 2.2%. In Turkey, where the central bank has been pressured to limit interest rate rises, it’s 15% and in Venezuela, where the budget is financed
Continue reading "Real Time Economics: Putin, Trump & Central Bankers | China Tariffs | Abenomics"
Good morning! Today we look at key trade meetings this week between the U.S. and China, the future of the Fed’s balance sheet, the surprising resilience of personal saving, and Venezuela’s deepening abyss. THE U.S.-CHINA TRADE CONFLICT WILL GET WORSE … Will the U.S. and China plunge into full-blown trade war or step back from the brink? This week could decide. The two have already imposed tariffs on $34 billion of each other’s imports and are scheduled to impose an additional $16 billion on Thursday. Meanwhile, the U.S. is teeing up tariffs on another $200 billion. On Monday, the U.S. Trade Representative kicks off six days of hearings where companies can comment on what the $200 billion will cover. Expect them to be contentious: so many companies want to comment (mostly against the tariffs) USTR had to double the number of hearings. … BEFORE IT (MIGHT) GET BETTER For
Continue reading "Real Time Economics: Make or Break for China Trade / Fed bond holdings / Moving"
This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at what Turkey’s economic crisis means for other markets, a pivot on U.S. trade policy toward poorer nations, how homeowners are dodging one big source of inflation, and whether we’re running out of construction workers. RECORD LOWS FOR LIRA The Turkish lira hit fresh record lows on Monday, rattling emerging markets around the world. The South African rand fell to a nearly two-year low against the dollar while the Chinese yuan neared its weakest level in more than a year. That’s driving up the cost of servicing dollar-denominated debt in emerging markets at a time when investors were already skittish. Turkey’s central bank pledged to provide “all the liquidity the banks need.” Markets shrugged. And Federal Reserve policy also matters: Rising U.S. interest Continue reading "Real Time Economics: Turkish Lira’s Collapse Ripples Through Financial Markets"
Yet another proof that the authorities were given evidence of widespread mortgage fraud before the crisis and chose to do nothing about it.
This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at Washington’s tougher stance toward China, what to look for in Friday’s U.S. jobs report, and what spiraling deficits may mean for the economy. HEAT WAVE The U.S. is turning up the heat on China. The Trump administration threatened to more than double proposed tariffs on imports while Congress passed a defense bill designed to restrict Beijing’s economic and military activity. The moves come as Beijing and Washington have failed to ease an escalating trade dispute, prompting the administration to seek additional leverage, Bob Davis and Lingling Wei report. China’s Commerce Ministry responded to the tariff threat, saying the country was “fully prepared” to retaliate to defend its interests. Key takeaway: President Trump has sparred with some Republicans in Congress over trade conflicts with allies Continue reading "Real Time Economics: U.S. Ratchets Up Pressure On China; What to Watch in the July Jobs Report"