Category: Economics

Looking Beyond the Economic Impact of a Greece-less EMU


The discussion about Greece and its future in the monetary union, or like Greenspan opined, the lack thereof, has focused on economic issues to the near-exclusion of all else.  This is myopic.  There are important geostrategic interests at stake.

Historians continue to debate what country lost at Yalta, the territorial settlement at the end of WWII that recognized a Soviet sphere of influence in eastern and central Europe.  Will they one day debate who lost Greece?

The Week Ahead: U.S. Labor Data, European Production


After the Federal Reserve releases its labor market conditions index today at 10am EST, a number of key economic indicators will be released that will measure economic developments in the United States and in Europe.

European lawmakers have recently disagreed on how the European Central Bank should move forward, in light of disinflationary trends that have caused both negative bond yields and deflation throughout central and northern Europe.

The ECB’s Decision and U.S. Jobs…Meanwhile, at the SNB


The ECB’s decision yesterday to no longer accept Greek government bonds or state-guaranteed paper, but approving Emergency Lending Assistance (ELA) by the national central bank remains a key talking point today. The timing of the decision, following the meeting between new Greek Finance Minister Varoufakis and Draghi but before Varoufakis met with German Finance Minister Schaeuble is particularly intriguing. 

The Week in Review: Trade Deficit Climbs, Employment Gains


The U.S. has a larger trade deficit with the rest of the world, but employment gains indicate strength in services is supporting the broader economy.

The Bureau of Economic Analysis announced Thursday that the United States has a trade deficit of $46.6 billion as of December 2014, up 17% from the prior month.

Destroying Capital with Negative Interest Rates


The Great Financial Crisis lingers.  That the world economy continues to grow does not change that fact.  There are different lenses from which one can view the crisis and seek to understand its implications. 

We are drawn to a lens that was central to the political economic discourse from the middle of the 19th century through the Great Depression.  It was the idea that capitalism was so terribly successful that it generated a surplus in excess of what it could profitably invest.

Employment, Services Rise with Higher Mortgage Applications


Three separate reports indicate that U.S. income and spending in the consumer services and financial sector are on the rise, helping job growth and business income.

The Institute for Supply Management reported Wednesday that the non-manufacturing sector rose more than expected, with activity as measured by the Non-Manufacturing index up to 56.7 in January, 0.2 points higher than December’s reading and slightly above forecasts.

Strong U.S. Housing Data Offsets Sharp Fall in Factory Orders


Residential real estate continues to recover at a strong pace in the United States, but U.S. factories are beginning to see a fall in demand.

A new report by CoreLogic shows that home prices rose 5% on a year-over-year basis in December 2014, with only three states—Maryland, Vermont, and Connecticut—seeing price declines. At the same time, Colorado, Texas, and New York were seeing the highest price gains.

Economic Data, Mostly from Europe, is Today’s Focus


The powerful bout of long dollar liquidation, spurred by optimism that the new Greek government had moved away from its posturing about debt forgiveness, has largely faded today. The ECB is reportedly rejecting Greece’s request to expand its T-bill offering to replace the formal assistance program that runs out at the end of the month.

The UK’s Green Party Shares Anti-austerity Sentiment with the Greeks


Syriza’s surge to power with a campaign against austerity has forced politicians across Europe to justify their economic policies. The UK chancellor was hot-off-the-mark to assure everyone that the Greek election result should not be interpreted as a rejection of austerity policies:

People get tired of economic failure, they [get] tired of rising unemployment… what you see is not a defeat of austerity, it is a defeat of economic plans that don’t work and in Britain we have got an economic plan that is working.

Can the Ebola Crisis Force a Change in Economic Growth Metrics?


If ever we wanted a reminder of how global capitalism has got things wrong, the Ebola outbreak in West Africa serves the purpose well. Our assumption that economic growth is essential is not only a feature of markets and politics, it also feeds into our thinking on development goals such as poverty reduction. The hope somehow remains that the relentless pursuit of production and consumption will trickle down to deliver more substantial benefits.