Wall Street Journal (February 15)
“Three years since Mr. Abe took power pledging to end two decades of falling prices and wages, followed by the launch of a massive monetary easing program by the Bank of Japan, headline inflation is still languishing around zero, real wages are falling and the economy has yet to achieve consistent growth.”
Institutional Investor (February 11)
“To be clear, we aren’t suggesting the U.S. economy is booming. When a ship sails in shallow water, the risk of running aground is clearly higher; likewise, a low trajectory of growth increases the vulnerability of an economy to exogenous shocks. So a negative shock is possible, but outright recession is unlikely.”
Tags: Booming, Economy, Exogenous shocks, Growth, Recession, U.S., Unlikely, Vulnerability
Wall Street Journal (February 5)
“The January jobs report wasn’t as bad as the markets seemed to take it… But then it wasn’t stellar either.” New jobs didn’t rise as much as expected, but there were wage gains and the labor participation rate rose as well. “We’ll hope for the best,” though the “overriding problem continues to be a lack of business confidence and investment.” This “leads to slower growth, which gives the U.S. economy a lower margin for absorbing growth shocks from around the world.”
Tags: Confidence, Growth, Investment, Jobs report, Labor participation, Markets, Shocks, U.S., Wage gains
Reuters (January 29)
“The Bank of Japan unexpectedly cut a benchmark interest rate below zero on Friday, stunning investors with a move aimed at shielding the country’s sluggish economy from volatile markets and slowing global growth.”
Tags: Benchmark, BOJ, Economy, Growth, Interest rates, Investors, Unexpected, Volatility
The Economist (January 23)
Oil price slumps usually do “the world a power of good. The rule of thumb is that a 10% fall in oil prices boosts growth by 0.1-0.5 percentage points.” This time, however, the abrupt 75% drop in the price of oil is testing the old paradigm. “Producers are suffering grievously. The effects are spilling into financial markets, and could yet depress consumer confidence. Perhaps the benefits of such ultra-cheap oil still outweigh the costs, but markets have fallen so far so fast that even this is no longer clear.”
Tags: Benefits, Consumer confidence, Costs, Growth, Markets, Oil, Price slumps, Producers, Suffering, Ultra cheap
Bloomberg (January 20)
“China’s slowing growth has crushed shipping rates to such an extent that hiring a 1,100-foot merchant vessel would set you back less than the price of renting a Ferrari for a day.” Since August, daily rates for Capesize ships have plummeted 92% to $1,563, while a Ferrari F40 runs $5,597. That figure excludes fuel costs of roughly $4,000. Even included, however, the total $5,563 daily cost for the vessel still remains cheaper than renting the Ferrari.
Tags: Capesize ships, China, Ferrari, Fuel costs, Growth, Shipping rates
Financial Times (November 4)
It now “seems likely, and indeed desirable, that the BoJ will be forced to expand its programme of quantitative easing before too long.” The Bank of Japan revised both its inflation and growth forecasts downward, and extended its horizon for achieving its inflation target. “Disappointing outcomes do not mean that the BoJ’s combination of an inflation target and using QE has failed, but that it needs to be more enthusiastically pursued. The BoJ can and should contemplate going further.”
Tags: Bank of Japan, Forecasts, Growth, Inflation, Outcomes, Quantitative easing
Bloomberg (November 1)
“China should dethrone its GDP target.” While many expect the Government to lower its GDP target to around 6.5% in the coming five-year plan, it would be better to scrap the target altogether. “The government should do all it can to promote rapid sustainable growth— but now that China is a semicapitalist economy, what that number turns out to be is beyond official control.” Suggesting otherwise, ultimately undercuts Government’s authority with wasteful local investment and data fudging. “Scrapping the GDP target outright would be best.”
Tags: Authority, China, Data fudging, Economy, GDP, Government, Growth, Investment, Official control, Semicapitalist, Target, Waste
The Economist (September 26)
“With China’s “decades-old investment boom fast dwindling, it needs consumption to kick in as a new driver of growth.” Fortunately, rebalancing is progressing with retail sales increasing “by 10.5% in real terms this year, well ahead of economic growth.” Amid industrial downturn, “China’s consumer boom is real. But do not count on it to lift the global economy.” This great consumer rebalancing is even less likely to benefit “commodity-exporting countries whose fortunes have hinged on China.”
Tags: China, Commodities, Consumption, Growth, Industrial downturn, Investment, Rebalancing, Retail sales
Institutional Investor (September 18)
“Ebullient growth isn’t likely any time soon, but with no recession in sight, equity bears are likely to remain in hibernation.” The 6.5 year bull market in the U.S. still has further to run.
