Category: Economics

The Latest Step in Improving U.S.-Vietnam Relations


The United States partially lifted its decades-old ban on weapons sales to Vietnam on 2 October 2014. This was one of the most significant steps in improving relations between the two former enemies since they normalised diplomatic ties nearly two decades ago. The US State Department made clear this decision related only to maritime surveillance systems and said the move was taken in response to improvements in Vietnam’s human rights environment.

Goldman Sachs: Stocks a Buy on New Jobs Report


A note sent to select clients of the investment bank juggernaut Goldman Sachs urged investors to buy stocks now, as more jobs and a resurgent U.S. economy could tip equities even higher in the next few years.

In their note, Goldman Sachs told investors that a rise in aggregate income would lift consumer spending, which in turn will lift U.S. retail and financial stocks. The bank said that U.S. GDP growth for 2014 could see a reacceleration in 2015 thanks to more money in consumers’ pockets that in turn will lift revenues for publicly listed companies.

Modi’s Look East Policy Approach is Finding Traction


Active interest by India’s new leadership has provided an adrenaline shot to the flagging discourse on South Asian regionalism. During interactions with South Asian leaders on the sidelines of the United Nations General Assembly meeting in New York, Modi reiterated the need for greater regional integration in South Asia. This was in consonance with his Neighbours First policy, first initiated with invitations to South Asian heads of state to attend his swearing-in ceremony in May 2014.

U.S. Jobs Data and the Dollar Reaction


US jobs data was largely in line with expectations, and the key take away is the divergence between the US on one hand and Europe and Japan on the other. 

Non-farm payrolls rose 214k and the back two months were revised up by 31k, putting the combined number at 245k, which is around the average for the last several months.  

Draghi’s Comments Offer No Surprises


Contrary to the leaks, ECB President Draghi stuck to his intent that the ECB’s balance sheet move back toward the 2012 levels.  He clearly confirmed that this was unanimous.  This was the first time, such a reference was made in the introductory remarks, which gives it more gravitas.  

The ECB and BOE Meet Today, but What Will Change?


The dollar is mixed on the day, but moves have been modest ahead of the ECB meeting. The Euro recovered to trade just above the $1.25 area and sterling is hovering just around $1.5950. The Australian and New Zealand dollars are outperforming at $0.8610 and $0.7740, respectively. 

U.S. Manufacturing Surge Offsets Europe Deflation Threat


Both U.S. manufacturing and economic activity expanded in October at a much faster rate than economists expected, while a slowdown in Europe hints at an uneven global recovery.

More Interpretation of the End of the Fed’s Quantitative Easing


The US Federal Reserve this week has moved one step closer to lifting interest rates by ending its controversial bond-buying program. This begins a long-anticipated process that will take many months to complete: the metamorphosis of a dove into a hawk.

This leaves us with the question of a date for an actual rate hike – a moment economists expect surveyed by CNBC expect will be in July 2015, a month later than previously forecast.

The Week in Review: U.S. GDP Rises 3.5% amid Low Interest Rates, Europe Bank Failures


The United States saw 3.5% GDP growth in the third quarter of 2014 while the Federal Reserve expects low bond yields to remain for the foreseeable future. In Europe, growth has come to a standstill, with second quarter GDP growth stagnant throughout the Eurozone and negative GDP growth in Germany and Italy dragging down the entire continent.

Can the Price of a Big Mac in Denmark Explain the Living Wage?


Bob Trebilock, editor of the Supply Chain Management Review, sent me an interesting email today that poses an interesting set of questions.

Bob writes:

“A friend sent me an email today with a link to a column by Peter Morici, a well-known conservative economist and writer (you see him on Xerox commercials wearing a bow tie) titled: Lift Vocational Education, not Minimum Wage, to Fight Inequality.”