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New York Times (August 30)

2015/ 08/ 31 by jd in Global News

“Economic fundamentals today are no different than they were before the market took a walk on the wild side.” The U.S. economy is “growing at 2.5 percent. At that modest pace, the United States cannot be of much help if other economies falter. But it can rebound from a market swoon, at least for now.”


The Economist (August 29)

2015/ 08/ 30 by jd in Global News

“After two years of remission, Japan seems likely to sink back into the ‘chronic disease’ of deflation…. New data are expected to show on August 28th that core CPI, the central bank’s preferred indicator of inflation, turned negative in July for the first time since the bank launched a big programme of quantitative easing… in April 2013.” Fortunately, better-than-expected data caught economists by surprise, showing level prices so Japan remains out of inflation, though just barely.


Wall Street Journal (August 28)

2015/ 08/ 29 by jd in Global News

“The turmoil in world markets may push back the date the Federal Reserve raises interest rates…. One consequence even in anticipation of the Fed’s move is that investors in emerging markets risk getting caught in a rip tide of liquidity heading back to the U.S.”


Institutional Investor (August 27)

2015/ 08/ 28 by jd in Global News

Gold is losing “its luster as an asset class.” Long considered a “hedge against inflation, currency volatility and geopolitical turmoil,” many experts are now questioning gold’s status as a legitimate investment. “Gold has failed to benefit from global economic and political turbulence recently…. Given that gold offers investors no yield, if it doesn’t rise in value during episodes like these, investors don’t have many reasons to hold it.”


Washington Post (August 26)

2015/ 08/ 27 by jd in Global News

“First was the dot-com bubble, then the housing bubble. Now comes the commodities bubble.” The stock market’s current turmoil is “driven at least in part by a bubble of raw material prices. Their collapse weighs on world stock markets through fears of slower economic growth and large financial losses.”


Bloomberg (August 25)

2015/ 08/ 26 by jd in Global News

Despite China’s promising long-term fundamentals, global automakers are facing “an oversupply time bomb” as China’s economy cools. Already, some import car dealers are holding nearly 150 days of supply. “If cutthroat competition for volume sales persists, exacerbated by weakness in the other once-promising BRICS markets, automakers could be headed toward a massive pileup in China.”


Wall Street Journal (August 23)

2015/ 08/ 25 by jd in Global News

“The People’s Bank of China is preparing to flood the banking system with liquidity to boost lending,” most likely by reducing the reserve-requirement ratio by half a percentage point. The planned move “signals that the Chinese central bank’s exchange-rate maneuvering in the past two weeks is backfiring, forcing it to again resort to the reserve-requirement reduction, the same easing measure that so far has failed to help spur economic activity.”



New York Times (August 22)

2015/ 08/ 24 by jd in Global News

“Given North Korea’s nuclear weapons arsenal and its erratic leader, Kim Jong-un, any such confrontation must be taken seriously and managed carefully, with the United States and China playing key roles in urging restraint…. As satisfying as it may be to push back against Mr. Kim’s provocations, any reaction by South Korea and the United States must be carefully weighed, with an emphasis on restraint.”


The Economist (August 22)

2015/ 08/ 23 by jd in Global News

“A resurgent dollar has hammered commodity prices: many have recently fallen below their levels of a decade ago.” There may be worse to come. “The real curse for producers is over-supply in almost all raw materials. Yet they continue to act as if they are blithely unaware of it. Capital is still pouring into holes in the ground, creating a hangover that may last at least a decade.”


Financial Times (August 20)

2015/ 08/ 22 by jd in Global News

“Capital is cascading out of emerging markets as investors, companies and financial institutions lose confidence in developing countries… If the cycle cannot be arrested, the risk is that a growth slump in developing countries—which account for 52 per cent of global gross domestic product in purchasing power parity terms—could pull the wider world into recession.”


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