Financial Times (April 14)
The International Monetary Fund (IMF) released its biannual forecast. Among the predictions, “India is expected to outperform China in growth for the first time in 16 years.”
Wall Street Journal (April 13)
“We need to get used to slower Chinese growth,” writes former Treasury Secretary Hank Paulson. He adds that “if, as Beijing has promised, the slowdown is accompanied by deep and serious structural reform that opens up new growth opportunities, such as allowing the private sector to compete against state monopolies in service sectors like banking and telecommunications, then China will still grow robustly compared with all other major economies.”
Tags: Banking, Beijing, China, Competition, Growth, Monopolies, Paulson, Private-sector, Slowdown, Structural reform, Telecommunications
New York Times (March 22)
“The U.S. economic outlook again “has a dispiritingly familiar ring to it.” It looks unlikely that “this year’s early Easter” will “boost consumer spending after a brutal winter.” Despite optimism, Easter shopping and warmer weather have failed for several years proven “a sure catalyst for growth.” For that matter, it’s increasingly unclear where that catalyst will come from.
Tags: Boost, Catalyst, Consumer spending, Dispiriting, Easter, Economic outlook, Growth, U.S., Warmer weather
Washington Post (March 11)
An “epidemic of stagnant wages” continues in the U.S. despite robust job growth. In February, the “official unemployment fell to its lowest rate since early 2008. Wages, however, increased by an anemic 0.1 percent. Over the previous 12 months, they increased just 2 percent. Factoring in inflation, they’ve barely increased at all.”
Tags: Growth, Inflation, Jobs, Stagnant wages, U.S., Unemployment
Institutional Investor (March 10)
“China’s red-hot growth inevitably has to cool given that it has already overbuilt and overborrowed. China’s debt load has exploded four-fold since 2007, largely on the back of shadow banking and a real estate boom.” China’s total debt load (estimated at 282% of GDP by McKinsey) now “tops debt loads in the U.S., Germany, Australia and other developed countries. China’s corporate debt amounts to 125 percent of GDP.”
Tags: Australia, Boom, China, Debt load, GDP, Germany, Growth, McKinsey, Overborrowed, Overbuilt, Real estate, Shadow banking, U.S.
Bloomberg (March 8)
“China’s second interest-rate cut in three months has raised fears that the government is trying to devalue the yuan to give its exports an unfair boost — an understandable suspicion.” In this case, however, “lower interest rates and a moderately weaker yuan make sense not just for China but for the rest of the world as well.” These factors should help Chinese leaders achieve their “soft landing” growth target of 7%. “The rest of the world no less than China needs this soft landing to be smoothly accomplished.”
Tags: China, Devalue, Exports, Government, Growth, Interest rate, Soft landing, Yuan
New York Times (February 2)
“Modest growth has never been enough to overcome the damage of the Great Recession and, from there, to reach new levels in terms of output, employment and wages.” Unfortunately, the U.S. is still stuck with modest growth. “For all the talk about accelerating growth, the economy grew last year at a rate of 2.4 percent, basically in line with growth over the past several years.”
Tags: Economy, Employment, Great Recession, Growth, Output, U.S., Wages
Wall Street Journal (January 26)
While the Greeks are likely to remain in the eurozone, “the Syriza victory is nonetheless a rebuke to European leaders. Greeks believe, not unreasonably, that the conditions imposed by the troika have been disastrous.” Rather than “promoting pro-growth reforms,” the European Commission, European Central Bank and International Monetary Fund imposed measures focused on “draconian fiscal tightening.” The result was predictable: “falling wages and pensions and rising taxes, with no growth in return for the pain.”
Tags: Draconian, ECB, European Commission, European leaders, eurozone, Fiscal tightening, Greek, Growth, IMF, Pensions, Reforms, Syriza, Taxes, Victory, Wages
Financial Times (January 23)
“It has taken far too long for the European Central Bank to embark on quantitative easing but its belated action is no less welcome.” ECB president Mario Draghi unveiled a massive program to purchase eurozone bonds through 2016 to help counter the threat of deflation. “There is no doubt that Mr Draghi needed to act. Growth and underlying inflation have been relentlessly weak, providing clear evidence that demand in the eurozone is faltering.”
Tags: Bonds, Deflation, ECB, eurozone, Growth, Inflation, Mario Draghi, Quantitative easing
Institutional Investor (January 20)
“Once again, Chinese growth data takes center stage.” The International Monetary Fund cited China’s slowing growth as a major reason for its latest downward forecast revision. The IMF slashed expected global GDP growth from 3.8% to 3.5% during 2015. “With a global economy still attuned to demand from a rising China, the nation’s economy remains the central theme for macro and micro-focused investors alike.”
