Sounding the Alarm on Japan

I just returned from ten days in Japan and boy, I’m worried. The country is facing major challenges on at least four critical fronts: the economy, demographics, energy, and national security. This “quad-fecta” is truly a crossroads for a country ill prepared to address any one of them, let alone all of them. I had […]

Turkey’s monetary policy soap opera

Turkish Prime Minister RecepTayyip Erdogan’s criticism of the Central Bank of Turkey, to which I had referred to in my last post, set the economic theme for the week. Not only the PM carried on with his criticism, other cabinet members got involved as well, and on both sides. Actually, there is only one side […]

Spain: The Land Where Incipient Deflation Becomes Good News for Headline GDP (Updated 29/05/2014)

The Spanish National Statistics Office (INE) today published the first detailed estimate of Spain’s Q1 GDP. Basically they confirm the gist of the original Bank of Spain numbers (see my report of 25 March below) although there are some important nuances. In my earlier report, I stressed that Spain’s Q1 surge was as much a […]

Fed Watch: Policy-Induced Mediocrity?

Why did the Federal Reserve lean against their optimistic 2014 forecast?  It seems that monetary policy over the past year can be summarized as a missed opportunity to supercharge the recovery, thereby locking the US economy into a suboptimal growth path. Last week’s speech by New York Federal Reserve President William Dudley noted the reasons […]

ECB Framework: BEEEP

Next week’s ECB meeting could very well prove to be among the most important events of the year.  It has taken ECB President Draghi’s leadership and increased risk of lowflation if not deflation to forge an apparent consensus at the central bank that more action is needed. While the “when” has been largely agreed upon […]

Vietnam, China Give Differing Accounts of Incident Near Disputed Oil Rig

By Andy Tully: The dispute between Beijing and Hanoi over China’s placement of an oil rig in disputed waters has escalated over the May 26 sinking of a Vietnamese fishing boat. Vietnam’s version of the incident is that 40 Chinese vessels surrounded the Vietnamese boat in an area of the South China Sea claimed by both nations. […]

Baghdad’s Hold on Kurdistan Slips Further as Oil Exports Begin

By Nick Cunningham: In what could prove to be an historic turning point for Iraq, the government of Kurdistan – the semi-autonomous region in the country’s north – has delivered its first shipment of oil to the international market, in defiance of the central government in Baghdad. The move could mark the beginning of greater geopolitical and […]

Ukraine, Greece, and the IMF: Déjà Vu All Over Again?

The IMF approved a $17 billion 24-month stand-by lending arrangement with Ukraine at the end of April.  The Fund sees the Ukrainian economy contracting 5% this year, but is enormously confident that its program will quickly set things right, projecting 2% growth next year and 4%+ growth in subsequent years. We’ve seen this storyline before […]

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