Investment Week (May 22, 2013)
Mark Carney will soon head the Bank of England (BOE). In his last speech as Governor of the Bank of Canada, he was critical of European leaders for not doing enough to stimulate the economy, blaming Europe’s lingering recession on “fiscal austerity, low confidence and tight credit conditions” and warning against a lost decade. In contrast, Carney was highly supportive of recent monetary stimulus by the Bank of Japan. Much of Carney’s future success at the BOE will be determined by the state of the eurozone, which accounts for the majority of U.K. trade.
Tags: Bank of Canada, Bank of England, Bank of Japnan, Europe, Fiscal austerity, Japan, Mark Carney, Recession, Stimulus
Financial Times (November 11)
According to preliminary figures released by Japan’s Cabinet Office, the domestic economy contracted by 0.9% during the July to September period, amid falling exports and dwindling stimulus from rebuilding efforts. “As many economic indicators have deteriorated further since September, it seems likely that the country has entered its fifth technical recession – two consecutive quarters of contraction – of the past 15 years.”
Tags: Cabinet Office, Economy, Exports, Japan, Rebuilding, Recession, Stimulus
The Economist (October 22)
“While Monday’s trade gap increases the chance the Bank of Japan will embark on yet another round of monetary easing amid a liquidity trap, the government has recently signalled its intention to launch a new stimulus. However, don’t bet on a pro-growth fiscal game-changer.” Any stimulus will probably “prove too little, too late.”
Tags: BOJ, Government, Japan, Liquidity trap, Monetary easing, Stimulus
New York Times (September 16)
“On the most basic level, the American Recovery and Reinvestment Act is responsible for saving and creating 2.5 million jobs. The majority of economists agree that it helped the economy grow by as much as 3.8 percent, and kept the unemployment rate from reaching 12 percent.”
Financial Times (July 8)
“If the eurozone did not exist, the world would be focused on America’s recovery problem.” With unemployment so high and Treasuries so low, Congress should be utilizing fiscal stimulus. Since they’re not going to, the Fed should step in with quantitative easing. “Last month’s jobs report confirmed that the US recovery is stalling for the third year in a row….The case is now strong enough for the Fed to embark on a QE3 asset-purchase programme at its next meeting at the end of July.”
Washington Post (November 15)
Columnist Robert J. Samuelson summarizes current thought on Japan. “It’s hard to remember now that in the 1980s Japan had the world’s most–admired economy….Nowadays, all we hear are warnings not to repeat Japan’s mistakes.” Samuelson, however, draws a different lesson from Japan. Many preach the importance (or sometimes danger) of government stimulus. Others point to the dangers of deflation. The key lesson Samuelson draws from Japan is the importance of job creation. “There is no substitute for vigorous private-sector job creation and investment, and that’s been missing in Japan.”
Columnist Robert J. Samuelson summarizes current thought on Japan. “It’s hard to remember now that in the 1980s Japan had the world’s most–admired economy….Nowadays, all we hear are warnings not to repeat Japan’s mistakes.” Samuelson, however, draws a different lesson from Japan. Many preach the importance (or sometimes danger) of government stimulus. Others point to the dangers of deflation. The key lesson Samuelson draws from Japan is the importance of job creation. “There is no substitute for vigorous private-sector job creation and investment, and that’s been missing in Japan.”
Tags: Deficit spending, Deflation, Japan, Job creation, Lost decade, Stimulus
Boston Globe (November 15)
Recent criticism from abroad of the Federal Reserve’s monetary stimulus program is “way off base.” The “complainers’ chorus” is led by China, Germany and Brazil. The Globe singles out China for “calling the kettle black” by accusing the Fed of currency manipulation. The U.S. should be “unapologetic” about the Fed’s plan to stimulate the US economy. As President Obama pointed out at the G-20 summit a strong U.S. recovery will benefit countries around the globe.
Tags: Currency manipulation, Fed, Quantitative easing, Stimulus, U.S.
The New York Times (October 16)
Fearing deflation, the Federal Reserve appears poised to adopt quantitative easing measures. The Fed is widely expected to print new money and buy Treasury bonds, hence increasing the money supply. The Fed can’t, however, succeed alone. The New York Times calls on President Obama and Congress to adopt new stimulus measures to kick start the economy. “To put millions of Americans back to work, a lot more needs to be done. Mr. Bernanke can’t do it alone.”
Wall Street Journal (August 26)
Former Vice Chairman of the Federal Reserve Board Alan Blinder writes that “the Fed has already spent its most powerful ammunition; only the weak stuff is left.” Blinder examines the Fed’s remaining options for perking up the economy. He suggests tweaks, such as buying private assets rather than Treasuries, to strengthen the remaining options.
Former Vice Chairman of the Federal Reserve Board Alan Blinder writes that “the Fed has already spent its most powerful ammunition; only the weak stuff is left.” Blinder examines remaining options for perking up the economy. He suggests tweaks, such as buying private assets rather than Treasuries, to make the remaining options more effective.
New York Times (August 11)
Tuesday’s Federal Reserve statement “sparked a global sell-off in stocks on Wednesday.” Growth is now expected to be less than 2%. The Fed has indicated that it will do what it can, namely by keeping interest rates near zero and buying treasuries. This isn’t enough, but the government is unlikely to increase stimulus spending. The New York Times laments “the economy needs more and better help than it is getting.”
