Bloomberg (February 1)
“The Bank of Japan governor’s major additions to stimulus in 2013 and the following year were unequivocally good for equities…. The latest salvo to spur inflation- negative interest rates on some deposits- is less straightforward.” Kuroda’s surprise move to negative rates has earned everything from praise to criticism, with some taking a wait-and-see approach.
Tags: BOJ, Deposits, Equities, Inflation, Interest rates, Kuroda, Stimulus, Straightforward
Wall Street Journal (September 15)
“The world’s second-largest economy is faring worse than previously thought, with government stimulus measures proving too short-lived to counter China’s sharp real-estate downturn or to prop up flagging factory output.” The slowdown in growth was highlighted by a slump in industrial production which fell to levels last seen during the financial crisis. “The falloff comes as Europe is stumbling and the U.S. recovery looks more moderate than expected, leaving the world in search of economic growth.”
Tags: China, Downturn, Economy, Europe, Factory output, Financial Crisis, Government, Growth, Industrial production, Real estate, Recovery, Stimulus, U.S.
Financial Times (December 31, 2014)
“Japan is no longer a backwater for investors…. The authorities are saying the right things and doing most of them.” Japan outperformed in 2013 and despite concerns over the consumption tax increase in 2014, Japan’s prospects remain robust. “With a wide range of one-off stimulus measures in force to counter a shock that may not come, we think growth could surprise significantly to the upside.”
Wall Street Journal (October 2)
The rise in Japan’s consumption tax is an unwelcome return to the old “tax and spend” playbook. Of the estimated $88 billion in revenue, over $50 billion is marked for spending as stimulus. “More rapid and durable economic growth is the only escape from Japan’s self-constructed fiscal trap. Mr. Abe still has a chance to rescue his economic program with a new reform plan, the long-awaited ‘third arrow.’ But with his tax increase he is creating another headwind to overcome.”
Tags: Abe, Consumption tax, Economic growth, Fiscal trap, Headwind, Japan, Reform, Revenue, Stimulus, Tax and spend, Tax increase, Third arrow
Financial Times (July 25)
“Since taking office in the spring, the new Chinese leadership knew it had to boost a slowing economy, while, at the same time, rebalancing it away from state-driven investment. Some of the measures included in the ‘mini-stimulus’ Beijing announced on Wednesday strike this difficult balance.” By cutting red tape for exporters and taxes for small companies, the package may succeed in letting “hundreds of small firms bloom.”
Tags: Beijing, China, Economy, Exporters, Leadership, Rebalancing, Slowing, Stimulus, Taxes
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.”
