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Why Abenomics Failed: There Was A "Blind Spot From The Outset", Goldman Apologizes
Ever since Abenomics was announced in late 2012, we have explained very clearly (for example here, here, here, here, here, here and here) that the whole "shock and awe" approach to stimulating the economy by sending inflation into borderline "hyper" mode in a country whose main problem has to do with an aging population demographic cliff and a global market that no longer thinks Walkmen and Sony Trinitrons are cool and instead can find all of Japan's replacement products for cheaper and at a higher quality out of South Korea, was doomed to failure.
Very serious sellsiders, economists and pundits disagreed and commended Abe on his second attempt at fixing the country by doing more of what has not only failed to work for 30 years, but made the problem worse and worse.
Well, nearly two years later, or roughly the usual delay before the rest of the world catches up to this website's "conspiratorial ramblings", the leader of the very serious economist crew, none other than Goldman Sachs, formally admits that Abenomics was a failure, and two weeks after Goldman also admitted that now Japan is informally (and soon officially) in a triple-drip recession, begins the scapegoating process when in a note by its Naohiko Baba, it says that Abenomics failed because all along it was based on two faulty "misconceptions and miscalculations." Ironically, the same "misconceptions and miscalculations" that frame the Keynesian "recovery" debate in every insolvent developed world country which is devaluing its currency to boost its exports and economy, when in reality all it is doing is propping up its stock market, allowing the 1% of the population to cash out and leaving the 99% with the economic collapse that inevitably follows.
So what happened with Abenomics, and why did Goldman, initially a fervent supporter and huge fan - and beneficiary because those trillions in fungible BOJ liquidity injections made their way first and foremost into Goldman year end bonuses - change its tune so dramatically? Here is the answer from Goldman Sachs.
Blind spot from the outset in “weak yen = export recovery” scenario
A weak yen boosts export price competitiveness, fueling a recovery in export volume that supports a sustained economic recovery via improved corporate earnings, capex recovery, and wage growth. At least, this was the scenario painted when bold monetary easing was launched as the first arrow of Abenomics to induce yen depreciation. Government officials and market participants alike believed for a long time that the yen’s rapid depreciation thereafter would at some point drive an export recovery. However, a tangible recovery in export volume is yet to materialize.
Actually, this is not the first time a weaker yen has failed to revive exports. Since the 1990s, Japan has experienced four phases of yen appreciation followed by depreciation, but in none of those phases was there any clear correlation between exchange rate and export volumes. Equating yen depreciation with export recovery would appear to invite multiple misconceptions and miscalculations (see Exhibit 1).
Firstly, a weaker yen does not necessarily result in lower export prices (on a local currency basis). Since a weak yen also increases exporters’ input prices, it is unlikely that export prices will fall at the same rate that the yen declines in value. Export prices also have a more limited impact on export volume than global demand, making the latter a more important determinant for exports.
Odd: nobody could think of any of this before Abenomics was launched resulting in the largest domestic misery in Japan in over three decades?
The combination of these two misconceptions has led to a miscalculation about the latest phase of yen depreciation. Export prices have not decreased as much as in past yen depreciation phases and global demand has lacked vigor. Fiscal austerity, chiefly in the US and Europe and implemented around the same time as Abenomics, has weighed on activity, resulting in a muted global economic recovery. This alone is a key factor behind the miscalculation of the export recovery scenario, in addition to which Japan’s export volume has been less responsive to global demand than before.
Let the scapegoating begin: here are the two misconceptions why, according to Goldman, Abenomics failed:
Misconception 1: Export prices do not fluctuate as much as forex
It appears to be commonly accepted that a strong yen increases export prices and lowers export volume, negatively impacting the Japanese economy, whereas a weak yen lowers export prices, raising the price competitiveness of Japanese products and in turn spurring an export recovery, with positive implications for the economy. We see two misconceptions here. First is that export prices do not fluctuate as much as forex. When the yen is strengthening, prices of Japanese products rise on a local currency basis and price competitiveness falls, while the opposite is true when the yen is weakening. However, in past yen depreciation phases, export prices on a contract currency basis have only fallen by around 30% of the rate of yen depreciation. Looking at the 12-month average, excluding extreme forex movements, the fluctuation in export prices is minor (see Exhibit 2).
Given that imported input costs fall and that hiking export prices undermines competitiveness when the yen is strong, the gap between the rate of yen appreciation and the degree of increase in export prices is large. In phases of yen depreciation, yen-based input prices rise, so covering higher costs does not require export prices to fall as much as the yen declines in value.
Miscalculation 1: Export prices have not fallen as much as in past phases of yen depreciation
One miscalculation regarding the current phase of yen depreciation is that the decline in export prices relative to how far the yen has weakened has been milder than in past phases of yen depreciation. This is because rising crude oil prices and other fuel-related costs have inflated manufacturers’ input prices by 6.1% on aggregate since September 2012 and manufacturers have not been able to lower export prices and at the same cover the higher input costs. When the yen weakened in 1995-1998 and between late 1999 and early 2002, manufacturers’ input prices fell only marginally despite higher import prices driven by the weak yen. This made it easy for manufacturers to lower export prices to factor in the weaker yen. Conversely, when the yen depreciated between 2004 and 2007, manufacturers’ input prices rose 20% on aggregate on sharply higher crude oil prices, and they were able to hike export prices (see Exhibit 3).
We see other factors behind the narrower decline in export prices this time. One is external considerations regarding government-led efforts to rapidly weaken the yen since the launch of Abenomics. The US has supported the BOJ’s quantitative and qualitative easing as a means of helping Japan escape deflation. However, concerns about the yen’s sharp depreciation are evident within the US. In January this year, US Treasury Secretary Jacob Lew made comments seeking to curb excessive yen weakness, saying that Japan would not see long-term growth if it overly relies on the forex rate. More recently, on September 22, William C. Dudley, president of the Federal Reserve Bank of New York, said that if the US dollar were to gain substantially in value then trade figures would worsen, impacting economic growth. Partly because US midterm elections are looming, there is consideration on the Japanese export industry side not to cause trade friction by using the weak yen to lower export prices and provoke a backlash from the US auto industry and other exportrelated sectors. We believe this stance is also intended to give Japan an advantage in remaining negotiations with the auto sector in the final stages of Trans-Pacific Partnership (TPP) talks. Therefore, we think one reason the 25% fall in the value of the yen has not led to lower export prices is foreign diplomacy and trade friction considerations.
It is also possible companies have not ventured to lower export prices. The Development Bank of Japan (DBJ) has conducted a survey asking manufacturers why they have chosen to keep manufacturing functions in Japan. Interestingly, 54% of respondents cited mother factories (for production of core components) and 27% high-value-added production as key factors after management and R&D. Mass production of commodity products was a low 7.6%. An even higher percentage, more than 60%, cited product and service quality and performance as sources of their competitiveness, while a mere 1% said the currency afforded them a competitive advantage. Products still manufactured in Japan for export tend to offer high-value-added with strengths in terms of quality and performance, or are essential core components with high price and volume elasticity (i.e., products whose sales volumes increase if local sales prices fall), as opposed to mass-produced items. We think Japanese companies may also feel they can preserve the brand image of Japanese products as offering high-value-added and high performance by maintaining a certain local sales price. For the above reasons, we think Japanese companies in the latest phase of yen depreciation have likely adopted a strategy of securing yen profits arising from the currency’s lower value without cutting export prices (See Exhibit 4).
Misconception 2: The key determinant of export volumes is global demand, not prices
The second misconception is the commonly held belief that export volumes will recover if prices of Japanese products fall in export markets. Even in past yen depreciation phases the correlation between export prices (contract currency basis) and export volumes has changed from time to time, meaning lower export prices do not always translate into higher export volumes. From the end of 1999 in particular, although export prices dropped sharply as the yen weakened due to the BOJ’s zero interest rate policy and quantitative easing, export volumes also slid in the face of cooling overseas demand resulting from the bursting of the IT bubble.
In short, overseas demand is the key determinant of Japan’s real exports. Indeed, exports and our Global Leading Indicator (GLI), a gauge of global economic trends, are closely correlated (see Exhibit 6).
Miscalculation 2: Elasticity of export volume versus global demand falls, global demand softens
A major miscalculation in the latest phase of yen depreciation is that global economic recovery has been muted owing to fiscal austerity undertaken mainly in the US and Europe during 2013. That the export volume reaction to global demand has been weaker than in the past has acted as a further headwind against the Japanese export recovery scenario. Comparing our export volume model calculations, in which export prices and GLI are explanatory variables, with actual export volume, we note that the latter has been constantly below the former since around the March 2011 earthquake (see Exhibit 7).
We see several reasons why Japan’s export volume has not kept pace with the global economy: (1) Japanese companies have offshored production; (2) Japanese products are now less competitive than overseas products from other Asian economies and elsewhere; and (3) Japanese companies have adopted a strategy of emphasizing quality and brand and decided not to lower prices to gain global share (see Exhibits 8 and 9).
We think exports have failed to recover during the latest yen depreciation phase due to several misconceptions and miscalculations: (1) Yen weakness does not necessarily result in a decline in export prices and this has been the case more so this time; (2) the impact of lower export prices on export volume is far more limited than global demand (GLI) in the first place; (3) despite the correlation between GLI and export volume, the offshoring of production and lower competitiveness of Japanese products have resulted in export volume being consistently below GLI since the March 2011 earthquake; and (4) the lackluster US and European economic recoveries have raised the risk of a further slowdown.
There is more, but the point is clear: we hear your apology loud and clear, Goldman, and we accept it - after all you couldn't possibly tell the truth two years ago when this Keynesian insanity, which incidentally is being tried everywhere around the globe and will have the same results, was about to begin.
And now, where is Abe's Imodium? He is going to need it.
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Goldman oops! Wins every day, by the way, you pay.
god's work is not always accurate I guess
They made all the money they could on this swing so now they will clean up on the reverse swing
So sorry you're fucked.
Move along, nothing to see here.
World fixers are always world-class fuck-ups.
So when does Kyle Bass get his pay day?
Few seem to realize how much the failure of Abenomics should terrify everyone. Japan is insolvent. Did Goldman mention that in their report? What does the Japanese government budget look like with 10 year JGB's yielding 4% due to risk premium? 8%? What do the balance sheets of the largest Japanese banks, insurers, and pensions look like if you give JGB's a 3% haircut? 5%? 10%? Japan has a central bank controlled by their government, so they will never miss a payment on their debt. The question is, what's the value of the Yen worth with which they will repay that debt. Answer: A lot less than it's worth now.
At any time the Yen could go into freefall. Japan's leaders will face a hard choice: allow hyperinflation that destroys the Japanese economy, or aggressively raise rates to avoid inflation and destroy the Japanese economy. I suspect they'll choose to raise rates because that is what the U.S. did in early 1980's, but that was a different time, and the inflation was not intetionally induced by monetary means. Because the BoJ has virtually taken over the market for JGB's, Japan will have a hard time re-establishing a global market for their debt especially as they enter this period of turmoil. I feel sorry for Japan.
Watch the Yen. It is the canary in the coal mine for the next major global financial crisis.
Please make sure Krugman gets a copy of this. And then let's hope he will STFU.
I just had a vision of a burning at the stake.
Children bedecked in their very best linen and silk outfits, of a virtual Vigilant Citizen nature, prancing about, dancing, happily singing of the new soul to be delivered to Beelzebub, the ruler of the demons, cheered on by the pious Elders of the High Temple, with joyous thoughts of buggery of the young and innocent, a wondrous event to herald the darkness of mankind's end.
Perfect.
Beware that flashing, slashing sword mister prancin dancin hIpreest.
Who Knew!!!!!!!! Markets become Fraudulent, Greshem's Law, Bubbles End Badly for the Little People, Bankers are doing God's Work...
Sarcasm
Who could Predict that the Banking Trust would blackmail US Congress & US President to form a Central Bank (Private Corporation), and they would take us to a depression by collapsing credit... then take us to 2 World Wars by the same mechanism... while perfecting Propaganda and Mind Control on Madison Avenue.
With some careless scanning of the article on my part I note that they apparently missed the biggest driver of them all.
When your imports exceed your exports, then weakeneing your currency is more harmful than helpful.
Derp!
Yes, I am carelessly scanning as well...
Casino Owner: Well you got rid of the customers the Dealers were cutting winnings with. NOW We'll have to fire the Dealers involved....
Maverick: No. Dealers will steal if you let them. These guys are the Best. Keep them. No use in firing them.
Sounds like Support for Auditing of Banks, US Congress, Corporations, Shell Companies, Tax Shelters, DHS, Pentagon, IRS, Wall Street Banks... FBI, DOJ, FTC, SEC, FTC, FINRA, GAO????????????????
Audit the FED!!!
The idea that currency depreciation helps the economy is stupid.
The only costs it reduces are local labour used in producing export goods and services, who quickly notice that their wages have lost buying power and demand wage increases.
Until they get them, their purchasing power is diminished, so local companies undergo a reduction in sales. Meanwhile, because exporters are selling more stuff, they require more labour; as they have been making more money, they can bid the prices of wages up higher than companies selling domestically, whose sales have fallen. So all that happens is that exporters grow at the expense of companies selling stuff domestically. As wages rise back up, workers consume more; so local production starts up again. But the shifts backward and forward are wasteful, impossible to predict, lead to capital misallocation and - consequently - reduce the amount of growth that would have occurred if only the currency hadn't been fucked about with in the first place. Combine Japan doing this with the ECB, BoE and Fed and you have even more sand being tossed into the gears of the market economy.
But, of course, whenever there is major capital re-allocation, those in the know can profit from it and skim. Hence its popularity with 'our' leaders and their lapdog economists.
God I hate them.
Nonsense! Japan just has to build a few more bridges (to nowhere), so that the Islands look like a frikk'en rollercoaster!
Too many big words for Saint Paul to comprehend...
What a fucking bunch of shit. Oppps! We were wrong. But lookie here, we got's ya'll covered, we found out what was wrong with our baseline Neo-Keynesian assumptions. Y'all know, garbage in garbage out. (chuckles) So, next time we'll make sure we stress those Neo-Keynesian assumptions more. And punt better. Who loves ya', baby? Now, how's about a drink at 21 before the play tonight? I knew you'd like that!
Fucking Bullshit, Galore Deluxe!
Aaaaarrraggh!
Seriously.
People like this belong in Hell
I think they should become acquainted with this Gustave Dore illustration from Dante's Inferno.
+1
One should always remember the classics...
my neighbor's aunt makes $65 an hour on the laptop . She has been out of work for 6 months but last month her paycheck was $18351 just working on the laptop for a few hours. browse this site... www.job-reports.com
I'm thinking that for you to know that, you'd have to be her pimp.
Why would a bunch of Japs allow a bunch of Jews to mislead them like this ???? That's what I never understand.
That's what the Trilateral Commission was for: allowing the elite scum full access worldwide. Worked great. Sadly, all middle class societies everywhere are just fed into the machine.
Ethnic slurs aside, who was misleading who? The bankrupt Japanese government needs the seniorage. Goldman is a major beneficiary of the inflation and added some (albeit sparing) legitimacy to the policy goals.
The only people who they probably thought could be misled were the Japanese people (Arrow 3) and apparently that failed too.
As for foolish economists well, 80% of the have been schooled in fairy-tale theory. I studied economics, including Keynesian macro, and I wasn't fooled by this horseshit policy. Am I more intelligent than Goldman Analysts? I highly doubt it.
A lot of people with the same education who claimed I was dead wrong two years have just started waking up to the reality of how grave the global economic situation is. I do kind of wish I had been wrong though as the current trajectory is ugly.
Always a confidence game: we don't have to believe our governments, banks, central banks, ratings agencies, or the voting public believe the dribble in the news.
Use your head man. No one believes the shit, they just hope for some audit or whistleblower to expose the game so the can move forward!!!!!!
Support Audits!!! Ice bucket Challenge!
Petition GAO, Inspector Generals, Audit the FED, Audit the Military, Audit US Congressional Conflict of Interest, Audit CDC, NIH, HHS, FEMA, DHS...
Use your head man. No one believes the shit, they just hope for some audit or whistleblower to expose the game so the can move forward!!!!!!
Well.. most average to intelligent citizens have slowly woken up after '09. You'd be amazed at what I hear on a daily basis though. Lots of people are just downright in denial of how bad things will be in many cases, or just think that global economic growth can somehow keep going like it has in the last 30 years. Hell, it might. But it won't be in the next 5 years. We are heading for a global sovereign debt crisis of epic proportions.
Most of the folks on ZH fall in the hyper-vigilant category, I believe. Which is good. Vigilance is warranted.
The macro reason is Japan could be seduced into the BRICS but there is too much hostility between China and Japan from WWII so Japan has to kowtow to Washington until they have their own nukes (which I assume they are working on as we speak).
The micro reason is they've probably got dirt on Abe. The NSA isn't for terrorism it's for political blackmail.
The macro reason is that Japan's public debt:gdp is north of 200%, nobody is dumb enough to buy their bonds and keep the gravy train flowing, so the remaining options are:
- Raising revenue through tax increases (overt)
- Raising revenue through seniorage (covert)
I do agree with your assessment on China/Japan. I expect they are militarizing in a big way.
GAO should have lots of moving targets on poor stewardship of taxpayer money at this point.
Fraud, Waste & Abuse on an Epic Scale.
Ebola should be focusing many on the money that was transferred from Tax Payers and provided "No Benefit" to the Country.
"Ebola Rape of US" was Financial Robbery and waste of Emergency Agencies Activities and Felony Level Fraud.
- Congress Gave up War Powers
- Congress Gave up Budget Powers
- Congress Gave up Legislative Powers to Lobbyist
- GAO Gave up powers of Oversight
- CBO Gave up Mission of publishing Cost Benefit Analysis
- SEC & FINRA & FTC Gave up their Missions
- DOJ & FBI Gave up their Mission of Justice in Finance
- President Gave up his Constitutional Oaths
- John McCain & Lindsey Graham are Liars
- Nancy Pelosi and Harry Reid are Fraudulent Nabobs
- Lois Lerner is a Tool
- Eric Holder is Fascist
- Auditing is a Dead Art in the USA
- Banking Trust took over all Anti-Trust Legislation
You can discuss it with me privately anytime, Seasmoke. I'm a Jap and a Jew. We can enjoy Kyudo and Manischevitz. I'll wear kimono.
Mr. Abe is Jewish? I'm sure he will be happily surprised.
It always helps if you actually have something to export.......
Rads?
There was a blind spot because all the banker fags poke each other in EVERY SINGLE ORIFICE.
I believe knuks would call it
"Skull Fucking"
Ah yes, my good man. When all has been taken that can be taken, the meat devoured, the very gristle dissolved by the leeches noxious spitum, the bones showing clear teeth marks and broken for the beasts to suck the marrow. When nothing else is left, the bravest and toughest... he with no morals or ethics goes back for the one last indignity. Metaphorically inserting his member into an eye socket or mouth, it matters not. And as he is finishing, turns to his mates, who are watching, totally aghast at the crudeness of the sociopath who thinks all is as should be, smiling pleasantly with a strange madness in his eyes, the true madness of the insane, laughs and recommends that the newbies, the children take sloppy seconds..... indeed, a skullfucking.
Sputum. What a gross word, Eh?
The thrilla of eboilla.
The Thrilla in Manilla.
Smokin Joe whooped Ali's ass.
I saw it on closed circuit memorial auditorium screen.
Cuttin edge dude.
F***ing A... Philippines, Patron Saint of Punching Shit!!!!
I'm sorry. That image is going to stick with me. Cruel and unusual imagery, Knuks. Sigh...
This tastelessness is truly invigorating. I had begun to wonder if the wonderful art form of squicking had been lost. Then I need only remember the Vampire Squids of Goldman Sachs with other paper pushers and the useful idiots at the Fed, and have come to realize it never truly died off. Nevertheless, thank you for making my day and please consider stopping by newsgroup alt.tasteless if you happen to usenet.
Tea for two and seppuku for one .
the blind spot was the inability to see how much miney could be made by leaglizng pot and other drugs as well as prostituttion. Hookers and blow, man, hookers and blow
abenomics is not the failure. raising taxes was the wrench in the works. that is what wrecked whatever abenomics was supposed to do.
Guess the economists at Goldilocks were thinking along the Progressive political lines that to raise taxes on people is good for growth, stimulative.
Can we dispense with the bullshit? It's fucked. Badly fucked. Inextricably, indelibly, incontrovertibly, and in perpetuity, fucked ....
And Ebola is not catchy by any means. You have to eat the raw, still warm flesh and drink the blood of an infected virgin to get it, OK?
AND FOR THOSE WANTING A GOOD EVENING, AT 10 pm, Gennady Golovnik FIGHTS TONIGHT
Last 5 guys all fell before the 4th round.
Guess that will be Cable... MMA, Ultimate Fight Championship, or something like that.
Guess I'll miss it. No fights on Antenna TV.
Having troiuble locating an infected virgin; do you have any sources ? What organization is this match in? What's it called, so I can look it up on U-tube?
SAT 800 guessing he is enthralled on Cable.
Perhaps Myanmar, Philippines, Malaysia, Thyland, Indonesia, Sri Lanka...
Never mind; I just looked up his name on U-tube; very interesting.
Who coulda knowed........?
Besnook is right. Adding China imploding in spectacular style.
Still money good long Nikkei.
China imploding?
http://www.bloomberg.com/news/2014-10-17/oil-tankers-to-china-jump-to-ni...
The number of supertankers sailing toward China’s ports surged to a nine-month high amid speculation an oil-price slump is encouraging the world’s second-biggest crude importer to accelerate purchases.
There are 80 very large crude carriers, the industry’s biggest ships, sailing toward the Asian country’s ports, according to IHS Fairplay vessel-tracking signals compiled by Bloomberg at about 10 a.m. today. That’s the highest since Jan. 3. Average shipments are 2 million barrels.
China is imploding, and great and utter will be its fall. chaori defaulted, the first splash in a tidal wave.
Stockpiling oil at such low levels means only that. It is no vindication of the infinite growth myth.
i dont think it is for immediate consumption. If I were china i would do the same thing. buy low sell high. print some pretty paper buy some oil find some cave to fill up
'Oops we fucked up' is going to become the warcry of governments everywhere. Oops we fucked up the economy. Oops we fucked up ebola. Oops we fucked up that war. Oops we fucked up this war.
But no oops will be needed for taking away right after right after right of citizens. They won't fuck that up one bit.
There wasn't really a blind spot so much as the Phoenician pirates that conquered us had a patch over one eye when they set everything up this way
Goldman cooked the books for Greece to get into the EU and pretended not to know WTF happened when they imploded. Goldman cooked the books on subprime lending and pretended not to know WTF happened when they imploded, except they sold the subprime bundles short to make more boodles.
Send all of Goldman and their Alum to jail, but only after hanging them.
Who Knew!!!!
Just because we are the primo Auditors and Business Analyst in the World... We buy Businesses worth Billions. We buy stocks worth Billions. We are the best of the Best in the World. We are Goldman Sachs or the US Wall Street TBTF.
But we totally blew it on Greece. Sorry. We were over our heads on that EU Membership thing. Sorry. Very Sorry.
It was an Honest Mistake. S/
As a fellow Goldmanite, I think I remember what happened. You see we already added in hookers and blow to our GDP calculations for Greece. As a result, this severely skewed our deficit/debt to GDP ratios. Oops.
Since GS?stopped spending on those things many economies are being stretched.lol
Don't forget to quarter them and send the parts to the four corners of the earth. Preferably to the lobbies of the local GS offices
It is clear that the prospects for Japan are lousy. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency. This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made.
Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world. They are past the point where they can return to a "free and fair market" interest rate marketing their bonds to the world and still be able to pay the debt service.
The moment the Japaneses stock market fails to rise enough to offset inflation and the people of Japan realize that even a weaker yen will not help we will see a tsunami of money fleeing Japan. This will constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html
In the long-term Japan will be (relatively) fine because it is full of Japanese.
How do we really know Japan is full of Japanese....??? I suppose the United States is full of Mexicans.
Wasn't FOREX manipulated?
http://finance.yahoo.com/news/forex-manipulation-worked-093852304.html;_...
"Abenomics failed because all along it was based on two faulty "misconceptions and miscalculations."
And somehow, nobody could have seen it in advance, other than Zero Hedge.
I heard the other day, that regulators are just now becoming concerned about subprime auto loans. Another thing ZH has been warning about for some time, already. It is already too late to worry about the barn door being open, when the horses are long gone out of the barn. But i would have to guess that was their plan all along.
Now Goldman, how bout admitting that Obama's and the Fed's policies have been an abject failture and are leading us to an economic collapse? Admit it! Fiscal insanity on a scale never before known!
"...after all you couldn't possibly tell the truth two years ago when this Keynesian insanity, which incidentally is being tried everywhere around the globe and will have the same results, was about to begin."
2015.75 is just a year away.
If the banking mafia in USUK can bully other large economies into inflating their currency away it takes pressure off the banking mafia inflating the dollar away. The EU has finally been bullied into doing it as well.
Look! A gaggle of blind spots going every which way! Follow them!
Oh no, they say he's got to go go go Godzilla
Goldman....yep they are geniuses .... at rigging the system, dark pools, hftrading, and installing their people in positions of governmental sting pulling......the biggest contribution source in washington dc.
We have a perfect test tube in Japan...they are about 7 years ahead of us in the ZIRP, and we can see it fails...
but Bernake and Yellen are still on board with the theories....as misguided and proven to be false as they may be.
That imported deflation myth takes one in the shorts
Duh! As with everything in modern Keynesian theory, the "cure" is worse than the illness. Maybe competitiveness of your economy (read: the level of central planning interference) is the impediment to growth, not the relative value of the currency. If that is the case, then everything Keynesian is doing more harm than good.
Shorter Goldman: "We have had shit-for-brains for a long time, or we are a bunch of crooks- take your pick."
Fiscal austerity, chiefly in the US and Europe and implemented around the same time as Abenomics
That GS believes this or, worse, thinks we're stupid enough to believe this happened, anywhere, says all you need to know aboutr this moron. There has been nothing even approching "austerity" in any nation in the first world, with the possible exception of Iceland. I guess we're not spiraling into bankruptcy fast enough for GS or Abenomics to work.
Abenomics is a beta site for the US
Yes great article.
I have always been disppaointed when articles on exports etc concentrate on the exchange rate or interest rates etc.
We need more hard data on actual exports and wages and production costs and which factories are moving overseas.
Companies don't just move entire factories every few months!
How can any company make money selling $100 DVD players?