Many respected analysts believe that GDP growth will be closer to 5% than the 6.5% announced by the Chinese authorities in their latest five-year plan. As a result of this, these analysts expect a rise in social unrest. And the Chinese government’s goal of reducing industrial overcapacity by firing 5-6 million employees in so-called “zombie companies” over the next 2-3 years will serve to heighten tensions.
Xing Yun via Caixin | Acknowledge the elephant in the room, but don’t exaggerate its weight. That’s the simple way of expressing Minister of Finance Lou Jiwei’s attitude as a policymaker toward the big risks looming over the global financial system, including China’s US$ 12 trillion economy. He sheds light on G-20 negotiations and the reasoning behind a successful outcome.
James Alexander via Historinhas | Despite all the pessimism the Euro Area nearly caught up with US NGDP growth in Q4. Now that Italy and Spain have finally reported their Nominal GDP figures Eurostat shows that 4Q15 NGDP growth for the Euro monetary region as a whole was almost as fast, year-on-year, as the US.
The economic world is deeply divided over whether or not we are facing a new recession. And some people are putting forward sufficiently solid arguments which easily eliminate any doubts on the subject. Although there is data to support the doubts existing in both the US and Europe, it’s also true that there are solid economic fundamentals which defend the thesis that a recession doesn’t seem to be imminent.
Larry Beck | For those of you who continue to believe that America is a great nation deserving of the respect and admiration that much of the rest of the world seems to have forgotten about, the 2016 presidential race to the sewer will provide a plethora of feel good moments.
Julius Baer Research | Oil seemingly maintains last week’s positive momentum and prices continue to rally in early Monday morning trade. There was indeed a set of supportive news pushing Brent benchmark prices close to USD 40 per barrel.
Marcus Nunes | The headline numbers for February: 242 thousand jobs and 4.9% unemployment rate. Let´s give these numbers some “structure”. The unemployment rate is the result of two forces that reflect economic decisions by individuals and firms. The first is the employment population ratio (EPOP). The second the labor force participation ratio (LFPR). The unemployment rate is equal to 1-(EPOP/LFPR).
Caixin | Lijia Zhang burst onto the international literary scene in 2008 with a memoir about her rebellious journey from disillusioned factory worker who spearheaded a walkout in support of the Tiananmen Square demonstrators in 1989 to becoming a writer and journalist. Her first book, Socialism is Great! A Worker’s Memoir of the New China, published by Atlas & Co., describes how she dreamed of escaping the stultifying routine of factory life, while reading Jane Eyre hidden within the folds of The People’s Daily. The book has since been translated into seven languages.
The weakness of the Caixin’s PMI, where services and the composite indexes moderated growth to 51.2 and 49.4 respectively, reminds Intermoney’s analysts of the reality that is China’s economic slowdown.
I will try to demonstrate the unusual and ground-breaking phenomena which led to the Big Financial Crisis of 2008 with data related to the US, but can also be replicated for other countries which lived through a speculative bubble (if there were any statistics available. Trying to get similar figures from the Bank of Spain or the National Statistics Institute is a major headache).