Gross Domestic Product

Econophile's picture

Q3 GDP: Proceed At Risk

The GDP results for Q3 are a triumph of government stimulus, which is to say they are a mirage, destined to vanish when the money runs out. There is really very little good news from the BEA report when you consider most of the economic activity was the result of Cash for Clunkers, the $8,000 housing tax credit, and federal spending. But like everything else in life, it's a bit more complicated than that.

Norway Is First European Country To Lift Interest Rates

After interest rates had been lifted in several commodity producing countries, the rate game is shifting to the old continent, where Norway has become the first country to announce it is raising its interest rate by 0.25% and has signaled it anticipates steeper increases over the next three years as "inflation accelerates and unemployment remains low." Count the NOK as the latest currency that will be using the dollar as a short-funding vehicle.

Guest Post: How The Printing Press Is Leading To The Demise Of The U.S.A.

Having the reserve currency comes with a great deal of responsibility. Over the course of the last 15 years the United States has abused this power with reckless spending, wars abroad and a printing press that just won’t quit. As I mentioned many times during the financial crisis last fall, the dollar as a reserve currency likely saved our skin. Being the reserve currency made the dollar the obvious safehaven currency. The world was too dependent on the well-being of the dollar for it to implode. If it hadn’t been the reserve currency we probably would have faced a much more harmful crisis. But now the world is tired of seeing us abuse this privilege just as they grew tired of Britain’s abuse of the reserve currency.

More European Turmoil: Romanian Government Set To Topple Tuesday As Country Faces Financial Crisis

Latvia, Sweden, the Netherlands, and now EU-member country Romania: the European periphery is ablaze, even as the Euro is at 52 week highs. It would be joke if it really wasn't so sad. Clariden Leu reports that "Romania's parliament looks set to topple the minority government on Tuesday in a no-confidence vote ahead of a November presidential election and raises fresh concerns over the country's IMF aid." For a country, whose financial future is closely tield with IMF goodwill, this could well be a catalyst event: "Economists warn about the impact of political standoff on fiscal reforms and budget cuts needed to ensure the International Monetary Fund continues to disburse aid from its 20 billion euro anti-crisis package."

Leo Kolivakis's picture

Will the next asset bubble come sooner than we think? Will it be in cleantech? Biotech? Nanotech? Infrastructure? Oil? Gold? Bonds? BRIC economies? Or will the next bubble be Canada? Yes, Canada! Nobody really knows, but big bets are being placed by some very big funds. The only thing I know is the world is awash with liquidity, a bubble is forming and we won't know about it until it's too late.

asiablues's picture

Brazil Puts the B in BRIC

Brazilian stocks rallied, along with the nation's currency, as investment prospects brighten on the news that Rio de Janeiro will host the 2016 Summer Olympics, making the Bovespa the world's best-performing major index last Friday.
Rising commodity prices this year have led investors to buy emerging market assets where the economies tend to be more commodity-dependent. Both emerging markets and industrial metals group are outperforming U.S. equities so far this year.

Leo Kolivakis's picture

The Bullish Bear?

Back in early March, Steve Leuthold told investors to "buy stocks now or you'll regret it". He was absolutely right then and I think he's right now. Forget retesting the March lows, the stock market is heading higher. He is now calling for the Standard & Poor’s 500 Index to jump to 1,350 next year as the economy recovers from the worst contraction since the Great Depression.

Leo Kolivakis's picture

Not as Bad as You Think?

A few brave economists believe fiscal and monetary stimulus, as well as improved productivity, will help the United States bounce back stronger than anticipated, helping it to leap hurdles such as high unemployment, a soaring budget deficit and a beleaguered consumer.

"A Full Blown Deflationary Episode" Coming

"Recent weeks have seen commentators either busy throwing in their towels, as the equity bull market has marched resolutely upwards and onwards (maybe that will change after Monday), or wrestling with their conundrums. Many have found the robustness in government bond prices through August most perplexing, especially when set beside continued resilience in developed equity markets. Once again, equity participants are missing the big picture. For despite clear signs from the business surveys of some sort of H2 recovery, firm evidence is emerging that the global economy is sliding towards a full-blown deflationary episode once this recovery falters." - Albert Edwards

Obama To Reduce Budget Deficit By $262 On "Fewer" Than Expected Bank Failures

Archive this one for the funny pages. It has been leaked by administration officials (and sponged up by Bloomberg), that on August 25, when the CBO releases its updated budget estimate, the 2009 deficit is expected to decline from $1.825 trillion to $1.58 trillion. And, get this, one of the reasons for the reduction is the FDIC spending $78 billion less, presumably due to "fewer bank failures than the administration anticipated." Pardon us, but last time we checked, not only did the FDIC have no cash left in the FDIC, and was effectively in a debtor position vis-a-vis the administration, but of the top 4 banks pending for blow up, Colonial was under (granted with some arbitrarily optimistic loss expectations), Guaranty was about to be hawked over to a few siesta loving left midfielders, and Corus was about to... well, we are not quite sure what the hell Corus is doing these days.

The Cost Of A "Non-Trivial" Flu Epidemic

The Daily Telegraph has compiled some rather sobering data on what the economic cost of the flu pandemic could ultimately be. This is a little less rosy than Steve Liesman's prediction that everything will blow over in a day or two. As a reminder the WHO is raising the epidemic to level 5, its second highest threat level: presumably they have not gotten the memo.

From the Daily Telegraph:

Moody's On U.S.: AAA Stable.... For Now

Moody's noted earlier that the U.S.' AAA rating is stable for now, although it is not clear how the government's interventions in the financial markets and economic stimuli will affect the deteriorating financial position. U.S. Treasuries issued to the public are "most certain" to be paid, wrote Steven Hess, Moody's senior credit officer, in a research report. If that isn't a good example of diplomacy and watching out for one's career, nothing is.