World Trade

Here are the IMF's latest, and prior, forecasts presented without commentary. None is needed.

EU-US trade talks: they were said to have died a slow and painful death (by surveillance) just a few weeks ago when it was revealed by the National security Agency whistleblower (Edward Snowden)

How Much Are Intelligence Analysts Front Running Markets?

The Government Actually DID Spy On the Bad Guys Before 9/11

World trade volume growth is languishing at a mere 1.3% YoY - a level only seen worse during the 2000/1 and 2008/9 global crises. Central banks have shot their wads to the point of no return. Governments have hit a peak-debt wall of fiscal irresponsibility. So what's left in the great depression playbook... why protectionism of course. As Bloomberg's Niraj Shah notes, global trade protectionism has surged to its highest since the financal crisis according to Global Trade Alert. As Simon Evenett notes, the past 12 months have seen a quiet, wide-ranging assault on the commercial level playing field. When protectionist dynamics were viewed as a compelling threat to the world economy in early 2009, defenders of an open trading system took up arms. They would be wise to do so again before international commerce fragments further along national lines.

The Dirty Little Secret About Mass Surveillance: It Doesn’t Keep Us Safe

Just one month after we discussed ArcelorMittal's 'demand' that Europe seek sanctions against China's steel tariffs (following unfair 'tit-for-tat-wine' Chinese trade practices, after EU solar panel tariffs), Reuters reports that the EU is indeed to press the WTO to rule against Chinese duties on imported steel. While history never repeats, it merely rhymes, this episodic collapse in economies, markets, and trade is now showing signs of the same desperation as during the Great Depression as intervention, devaluation, and now protectionism are brought to bear to save the domestic economy at all costs. The EU joins Japan in this rapidly escalating trade war with Beijing as they believe "retaliation by the Chinese is now recognized," something not allowed under WTO rules, "and so they have a good chance to win." This will not help either trade relations with the world's 'growth' engine or the credit-crunched nation's massive glut of commodities (and commodity-backed credit lines).

Are Emergency Plans Meant Only for Nuclear War the Real Justification for Spying?

If you hold precious metals in your portfolio, there is a good chance you fear hyperinflation and the crash of fiat currencies. You probably distrust governments in general and believe they are self-serving and have no interest in your economic well-being. It is likely that your holdings in gold are your lifeline – your hope to get you through these times while holding on to your wealth. But have you ever given any thought to the possibility of having this lifeline confiscated by the authorities? If you fall into this camp, you're in good company. As terrible as the thought is, it seems unlikely to us that the government will not confiscate gold, as they have little to lose and so much to gain.

• BIS lays out "simple" plan for how to handle bank failures (Reuters) - Are we still holding our breath on Basel III?
• Deficit Deal Even Less Likely - Improving U.S. Fiscal Health Eases Pressure for a 'Grand Bargain' Amid Gridlock (WSJ)
• IRS Faulted on Conference Spending (WSJ)
• Deadly MERS-CoV virus spreads to Italy (CNN)
• Turkish PM Erdogan calls for calm after days of protests (Reuters)
• Financial system ‘waiting for next crisis’ (FT)
• Russia to send nuclear submarines to southern seas (Reuters)
• China Nuclear Stockpile Grows as India Matches Pakistan Rise (BBG)

• The deeper agenda behind "Abenomics" (Reuters)
• BoJ governor Haruhiko Kuroda promises to stabilise bond market (FT)
• Obama Sees Sunset on Sept. 11 War Powers in Drone Limits (BBG)
• Lower CPMs for everyone: FTC Begins Probe of Google's Display-Ad Business (WSJ)
• Apple’s Tax Magic Leaves Irish Bondholders Unmoved (BBG)
• Asia Goes on a Debt Binge as Much of World Sobers Up (WSJ)
• All hail Gazpromia: UK gas supply six hours from running out in March (FT)
• Spain’s banks face €10bn more provisions (FT) ... and then more, and more, and more
• Truck strike may have caused Washington state bridge collapse, officials says (Reuters)
• P&G Says A.G. Lafley Rejoins as Chairman, CEO (BBG)
• Five Key Things About the SAC Insider Case (BBG)

One can read "The Lethal Presidency of Barack Obama" to get a true sense of Obama's "the best defense is a relentless drone everyone offense, ignore collateral damage and take out a few Americans in the process" policy. Or one can stare at rising stawks and enjoy their Obamaphones. Obe can't have both.

The mistake Abe is making is to think the same trick that worked for the US will work for them. The problem, as Shirakawa no doubt realizes, is that the two country’s situations are not at all analogous, because the yen isn’t really a reserve currency in the same way the dollar is. There is no population of natural sovereign buyers who will be forced to print their own currency to mop up excess yen, as there is for the dollar. No sovereign is going to want to dramatically increase the allocations of their country’s reserves to the yen, not when it’s in the middle of being deliberately devalued, or really ever. Russia and China and Saudi Arabia don’t need any more yen, they have plenty. Oil isn’t priced in yen. Japan isn’t the world’s largest economy, or even its second largest. World trade isn’t conducted in yen. The emerging economies will just let it collapse. There is no natural sovereign sink for yen to drain into, as there is for the dollar, no group of buyers of last resort with bottomless pockets and no choice but to buy.

For those vertiginously challenged, look away; for everyone else, the fastest trip up the new World Trade Center... (or is this what it feels like to be the Nikkei?)

In chapter 8 of David Stockman's new book The Great Deformation, the power-that-be-turned-anti-establishment-reality-seeker explains his perspective on the myths of the New Deal Recovery: "The new deal was a political gong show, not a golden era of enlightened economic policy. It shattered the foundation of sound money and inaugurated a régime of capricious fiscal and regulatory activism that inexorably fueled the growth of state power and the crony capitalism which thrives on it. But it did not end the Great Depression or save capitalism from the alleged shortcomings which led to the crash. In fact, the New Deal introduced a severe dose of economic nationalism and autarky at a time when the only hope for speedy recovery was a reopening of world trade and reestablishment of a stable international monetary régime.... in reality, the notion that the New Deal had pioneered a road map to recovery by means of countercyclical fiscal policy is mostly a postwar academic legend."