Japan: the cost of the nuclear switch-off
Japan is slowing down and faces a second half of 2012 with weak activity, CaixaBank research shows. The fact that the nuclear switch-off will increase the cost of energy imports doesn’t help.
Search Results for deflation
The Japanese liquidity trap
Economist Luis Arroyo peeks at Japan’s monetary policy with some sense of vertigo. Deflation has become a real threat for the country’s recovery and should be fought sooner than later.
An inopportune trade deficit for Japan
Japan has lost exports steam. Its current account surplus has fallen from 20.7 trillion yen to 4.4 trillion yen in five years since 2007.
Bernanke despises inflation horror tales
Will inflation rise in the US? That is the expectation of investors. Is it due to the Federal Reserve’s monetary policy? You bet. But, economist Luis Arroyo concludes, eggs end up broken when making an omelette. Or when a central bank stimulates employment.
Japan’s recovery needs sustainability
By CaixaBank research team, in Barcelona | The upswing exceeded expectations with a first quarter GDP that grew by 1.0% quarter-on-quarter and 2.6% year-on-year. This momentarily places Japan at the head of advanced economies in terms of growth. However, the forecast for the whole of 2012 hardly reaches 2.5%, as the composition of the national accounts raises doubts regarding the sustainability of the upswing. Unusually, the growth of the first…
Thursday’s charts: dumb bets
Luis Arroyo, in Madrid | Greece was in free fall mode when at the European Central Bank they had the funny idea of pushing the country …downwards. The ECB said it had frozen all operations with Greek banks, which already are suffering a killing capital drain: “Central bank head George Provopoulos told Papoulias that Greeks have withdrawn as much as €700 million ($891 million) and the situation could worsen, according to the transcript…
France most vulnerable to political risk in the euro zone, says Schroders
LONDON | In its global macro outlook report, investment company Schroders said on Friday that its eyes were on France amidst ongoing euro zone concerns and despite the uncertainty surrounding Spain. The upcoming elections could thwart France’s plans to implement State budget cuts, the Schroders paper highlighted, while the European Central Bank refinancing lines would have ring-fenced the Spanish banking sector from liquidity scarcity, unlike Italy’s. “France is the euro zone member currently…
Easter read (1) | Two years digging an empty grave for the euro
Many economists and the Anglo-Saxon financial gurus have been killing the euro month after month since early 2010. But, even if their doomsday predictions have miserably failed so far, their negative influence over the markets can not be neglected. By Fernando Barciela, in Madrid | In one of his recent and terrifying articles about the euro and the sovereign debt crisis in the Financial Times, ‘There is no Spanish siesta for the eurozone‘, Wolfgang Münchau found that many…
Peter Temin: “Merkel acts like Chancellor Bruening in 1931”
By Gustavo Matías | Professor Emeritus at MIT, Peter Temin understands why German Chancellor Angela Merkel bullies everyone into austerity. But he disagrees. Temin believes too many, too deep budget cuts can prevent countries from paying their debts as it has already been the case in Greece. So Germany could destroy the euro and put the global economy under risk? Something similar happened in 1931, also because of Germany’s influence, and led…
Threadneedle: healthy demand for equities after liquidity boost in EU, UK, Japan
LONDON | Global asset manager Threadneedle pointed at liquidity operations carried out by most G20 governments as the primordial reason behind the recent rally that the equity sector has experienced. “We see the LTROs, the recent £50bn extension to quantitative easing by the Bank of England and the ¥10trn increase in the Bank of Japan’s asset purchase scheme as activities that boost liquidity and are likely to increase demand for…