måndag 7 november 2011

Efter recession: stagnation

Ryan Avent om USA, 3 november:

"the Fed's forecast has—yet again—been revised downward. The central bank now anticipates that the unemployment rate will be around 8% in 2013. That's 6 years after the onset of recession, 4 years after the beginning of the recovery, and that's 2 full percentage points above the Fed's upper-end estimate of the long-term natural rate of unemployment. Given this clear and substantial admission of its own continued failure, the Fed obviously opted to do more, right?

No, in fact, you'll be shocked to learn that it did not."
Avent, "Someone should really do something", Economist Free Exchange 3 nov


3 nov: ECB räntesänkning 1,5 % --> 1,25 %
"A deepening Eurozone recession is inevitable. Even if full-blown financial crisis is avoided, the cost will be continued austerity programs that will sink the Eurozone economy ever deeper into recession. This will only exacerbate the problems facing European banks as nonperforming loans rise, which will be on top of the credit contraction to follow plans to have banks recapitalizing themselves with private money by next summer."
Tim Duy, "Aftershocks", Economist's View 1 november

"A eurozone recession – possibly severe – looks almost inevitable before the end of the year, even if the region’s debt crisis does not intensify further.

A sharp fall in German industrial production in September, reported by Berlin on Monday, provided the latest evidence that growth had gone into reverse in Europe’s largest economy. Production was down 2.7 per cent on the previous month. /.../

The risk now is that doubts over the public finances and future political leadership of Greece and Italy turn a “mild” recession into something much worse. “The persisting uncertainty is poison for economic growth,” warned Ulrike Rondorf, economist at Commerzbank.

Unlike the export-led economic slump in Europe that followed the collapse of Lehman Brothers investment bank in late 2008, the causes of the current slowdown are largely domestic – and unlikely to be reversed in the foreseeable future.

Compounding a loss of economic confidence among business leaders and consumers, fiscal austerity measures are squeezing spending on goods and services across the continent, not just in crisis affected countries such as Italy, Spain Portugal and Greece. France on Monday announced another package of tax increases and expenditure cuts."
Ralph Atkins, "German slowdown likely to lead to eurozone recession", FT 7 nov

Uppdatering 19 januari 2012
Standard & Poor's bedömer det inte som att eurozonens nedskärningspolitik/austerity är rätt medicin och nedgraderar Frankrike och Österrike från AAA plus fyra länder som inte var AAA. Economist kommenterar:
"According to S&P, EU leaders have misdiagnosed the euro-zone crisis. They have focused too much on tackling the increase in governments’ budget deficits, which is only part of the problem. As a result, they did not pay enough attention to the deeper causes of the crisis: the divergence in competitiveness between the euro-zone’s core of strong economies and its struggling "periphery" as well as the huge cross-border debts that stem from this gap. Reforms based solely on fiscal austerity could easily become self-defeating, notes S&P."
Economist Free Exchange, "France goes soft-core", 14 januari

Tim Duy, "How's That Austerity Working?", Economist's View 15 januari
"Even the illusion of political unity in Europe appears to be dissolving before our eyes. This, of course, should come as no surprise to anyone watching the European crisis unfold. The key problem always was the internal imbalances, a problem for which European policymakers have never offered a credible solution. They simply don't have such a solution in the context of a system of fixed exchange rates. I believe that currency devaluation is the only option that will change relative competitiveness in any reasonable timeframe and restore internal balance. But that option is unavailable for Euro members.

Lacking currency devaluation as a tool to resolve imbalances, European policymakers turned to fiscal austerity. That plan has failed, pushing nation after nation into ever deepening recession. With Greece going on its fifth year of recession, I imagine by now that Portugal, Spain, and even Italy now see the writing on the wall for themselves. Sadly, however, the alternative is exiting the Euro, which almost certainly means financial chaos for the Continent as a whole. /.../
In Europe, the unstoppable force of austerity is colliding with the immovable object that is reality. "
Tim Duy, "Is Europe About to Unravel", Economist's View 16 januari

Uppdatering 19 april 2012
Hur ser en japanisering -- "lost decade" etc -- av eurokrisen ut? Richard Milne spekulerar i sjunkande tyska statsobligationsräntor (dvs stigande priser på statsobligationerna) och fallande eller långsamt utvecklande aktiepriser.
Richard Milne, "Eurozone is starting to look Japanese", FT 18 april

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