Archives for: August 2011
08/31/11
Entrepreneurial capitalists are necessary more than ever!
Keywords: Bureaucracy, When Success is Demonized more »
NPR: Obama's New Economist Favors Tax Credits For Companies That Hire
, August 29, 2011
Alan Krueger, who President Obama today nominated to lead the White House Council of Economic Advisers, favors "the idea of having a new jobs tax credit" as one w… more »
August 30, 2011
Keywords: US Economy, US Monetary Policy more »
MIT analyzes thousands of goods continously. The MIT goods basket has not exactly the same composition as the basket of the official CPI statistics. MIT currently shows an inflation for the US which is higher than the officially reported one:Source:… more »
08/30/11
06:45:44 pm, by editor of MarketObservation.com 
, 93 words 
Categories: Economics United States, Economics Global
Jackson Hole Conference: Presentations, published on the Kansas City Fed homepage
Assessing Current Trends in Global Growth, by Dani Rodik (Harvard)
Balancing Growth with Equity, by Esther Duflo (MIT)
Achieving Growth Amid Fiscal Imbalances,… more »
WSJ: Look at Case-Shiller by Metro Area, August 30, 2011
S&P/Case-Shiller home-price data showed sideways movement in June, as prices were boosted from a month earlier thanks to seasonal factors but remained below year-ago levels.
The composite… more »
Bloomberg: Consumer Confidence in U.S. Sinks to Lowest Since ’09 on Economic Concerns, August 30, 2011Confidence among U.S. consumers plunged in August to the lowest in more than two years as Americans’ outlooks for employment, incomes and business… more »
Keywords: US Economy, US Monetary Policy more »
08:18:26 am, by editor of MarketObservation.com , 8 words
Categories: Economics Global, Economics Asia
August 30, 2011
Keywords: China, Chinese Economy, Chinese Monetary Policy more »
Project Syndicate: The Trouble with Eurobonds, by Hans-Werner Sinn, August 26, 2011
Instead of introducing another instrument for redistribution, Sinn believes that it is now time for the Euro countries in the South to clean up their public finances t… more »
The Financial Times yesterday published an article about the weakening Swiss franc.
Financial Times: Franken erleidet Schwächeanfall, August 29, 2011
The Swiss Economic Institute about the weakening Swiss economy:
KOF Economic Barometer – Sharp… more »
08/29/11
The Swiss government announced a 2 billion Swiss Franc support program for mainly touristic enterprises and export firms. More and more entrepreneurs announce that they are in deep problems due to the Euro/Swiss franc exchange rate (a bubble occurence) b… more »
The Euro/Swiss franc exchange rate is currently close to 1.18. As compared to the Euro the Swiss franc depreciated approx. 17% over the last weeks. As Switzerland is highly connected with the EU economy, various experts expect the Euro/Swiss franc exchan… more »
06:14:32 am, by editor of MarketObservation.com , 147 words
Categories: Economics United States, Economics Global
Jesús Fernández-Villaverde, Pablo Guerrón-Quintana, Keith Kuester, and Juan Rubio-Ramírez, “Fiscal Volatility Shocks and Economic Activity”, Univ. of Pennsylvania, August 2011
"We study the effects of changes in uncertainty about future scal policy o… more »
08/28/11
Good news from the German economic front: much more managers are buying than selling shares: Keywords: German Economy, Insider Share Buying more »
Keywords: Asset Bubbles, Monetary Policy more »
Find below an interesting link to a 2009 conversation between a Chengdu (China) local representative of World Bank's International Finance Corporation and a US delegation. In an open conversation, the local IFC representative admits that China might have… more »
Keywords: Economic Freedom, Quality of Life more »
Wir haben kurz nach Ankündigung des CHF 2 Mia. Stimulierungspakets des Bundesrates festgehalten, dass eine heftige Verteildiskussion stattfinden wird. href="http://www.marketobservation.com/blogs/index.php/2011/08/18/allocation-of-latest-swiss-econom… more »
Good NYT article from David Leonhardt in the latest weekend edition on the latest decision of the Fed not to immediately start with a QE3 program. David points out that the public conversation still matters in the Fed decision making process. And how it… more »
09:27:34 am, by editor of MarketObservation.com , 257 words
Categories: Central Banks/Government, Academic
2011 reserach finds that European citizens do not make their trust in the European Central Bank (ECB) dependent on the economic situation as long as the economy runs smoothly. The picture looks completely different during crisis times:Roth, Felix, Gr… more »
08/27/11
August 26, 2011Keywords: Sovereign Debt, Economic Growth more »
Swiss franc depreciation continues - still heavily overvalued as compared to the Euro and the Dollar
The Bernanke speech signalled the world that the US economy as well as the global economy might be in a better state than many expected. This had an immediate effect on the Swiss franc, which further depreciated. The Franc is still far away from purchasi… more »
Keywords: Economics, History of Economics more »
09:56:26 am, by editor of MarketObservation.com , 47 words
Categories: Economics United States, Economics Global
Menzie Chinn, an advocate for a policy which further weakens the dollar (arguing with fascinating charts):
Econbrowser: Dollar Watch, August 25, 2011.
A further depreciation of the dollar is not for the good of the American consumer and, of course… more »
09:18:01 am, by editor of MarketObservation.com , 77 words
Categories: Economics United States, Economics Global
the "Positives" and "Negatives" of this week. Unexpected positive and negative news are more or less in balance. Consistent austerity and fiscal policies in both the US and Europe could probably change things to the better quite quickly. Keywords:… more »
In his August 26, 2011, Jackson Hole speech, Fed Chairman Ben Bernanke clearly communicated that there will be no immediate QE3. He passed the ball to politicians:The Economist: Passing the baton, August 26, 2011IN HIS Jackson Hole speech a year… more »
08/26/11
09:42:45 am, by editor of MarketObservation.com, 90 words
Categories: Entrepreneurship/Leadership/Innovation
At a time when political leaders are talking a lot about the need to create jobs from the top down, Donna Matias is taking more of a bottom-up approach. Matias and her colleagues at the Entrepreneurship Clinic at the University of San Diego Law School pr… more »
08/25/11
Project Syndicate: China’s New Currency Policy, by Martin Feldstein, August 23, 2011
China’s government may be about to let the renminbi-dollar exchange rate rise more rapidly in the coming months than it did during the past year. The exchange rate wa… more »
02:04:16 pm, by editor of MarketObservation.com , 5 words
Categories: Global natural Resources Trends
August 24, 2011
Keywords: Gold, Gold Price more »
06:51:06 am, by editor of MarketObservation.com , 38 words
Categories: Global natural Resources Trends
FT: 'Me want shiny stuff'; Financial Times Video on the 1970 gold bubble, August 23, 2011Keywords: Gold, Gold Bubble, Irrational Excuberance... another bubble we dealt with and will continue to observe: the Swiss Franc more »
Voxeu: Eurobonds: Wrong solution for legal, political, and economic reasons, Daniel Gros, August 24, 2011
Eurobonds are being touted as the silver bullet to resolve the Eurozone crisis. This column argues that the Eurobonds proposal fails on legal, po… more »
MarketWatch: Sad day for Apple as Steve Jobs resigns; Commentary: No one wanted to see this day come, August 24, 2011
He has been called by many who worked with him a micro-manager, a tyrant, and a control freak.
One of the former team members who… more »
08/24/11
Becker Posner Blog: Deserving and Undeserving Inequality–Becker
, August 22, 2011
During the past 25 years, inequality in the world has greatly declined mainly because of the rapid growth in incomes in large poorer nations, especially China, India, a… more »
Keywords: Capitalism, Myth more »
04:14:22 pm, by editor of MarketObservation.com , 56 words
Categories: Global natural Resources Trends
According to estimates by the US Geological Survey, more than 80% of total gold has been produced after 1900. The total amount of gold produced has an estimated weight of 160'000 ton. All this gold put together would create a cube with a length of approx… more »
Welt: Is Ireland a model for how the West can recover? August 10, 2011Lower salaries and a well-structured bailout have made Ireland competitive again, though its export-driven growth is still vulnerable to the fallout of a reeling world economy. Loo… more »
Keywords: US Economy, Economic Policy more »
08/23/11
Could austerity build trust...Keywords: Irish Government Bond Yields, Italian Government Bond Yields more »
11:01:49 am, by editor of MarketObservation.com , 5 words
Categories: Economics United States, Economics Global
August 22, 2011
Keywords: Economic Growth, Stimulus more »
UBS-ByGeorge_The Convulsions of Political Economy2011!08!16(function() { var scribd = document.createElement("script"); scribd.type = "text/javascript"; scribd.async = true; scribd.src = "http://www.scribd.com/javascripts/embed_code/inject.js"; var s = d… more »
08/22/11
CNBC: Germany Must Decide What Kind of Euro It Wants: Jim O’Neill, August 22, 2011Keywords: Euro Crisis, Germany more »
Hedge Fund Manager Axel Merk thinks that many people saw the rating agencies in a too negative light after S&P downgraded the US.SafeHaven: Don't Shoot the Messenger, by Axel Merk, August 8, 2011Here is the whole post which was originally p… more »
06:20:34 am, by editor of MarketObservation.com , 265 words
Categories: Investment, Central Banks/Government, Academic
Bertaut, Carol C., DeMarco, Laurie, Kamin, Steven B. and Tryon, Ralph W., ABS Inflows to the United States and the Global Financial Crisis (August 17, 2011). FRB International Finance Discussion Paper No. 1028
Abstract:
"The "global saving glut" (G… more »
08/21/11
Greece this Sunday called on the European Union to show leadership to stem a growing row among eurozone members over a deal under which Finland will receive collateral for fresh loans to Athens.Finance Minister Evangelos Venizelos urged European official… more »
Voxeu: Innovations in the real economy thrive on modern financial markets- by Thomas Meyer, Deutsche Bank, August 19, 2011
"Against the backdrop of noise about the damage financial markets can cause, this column focuses on the positives. It presents a… more »
Looking at the recent debate about the role of the CRAs during the financial crisis and the oligopolistic market structure, spin offs from one of the big agencies could have a good chance to succeed and to get mandates quickly. Why is entrepreneurial act… more »
08:51:24 am, by editor of MarketObservation.com, 20 words
Categories: Economics United States, Economics Global
Part 1:Part 2:Keywords: Entrepreneurship, Innovation, strong National Economies, Economic Growth, Predictable Political Institutions, Free Market Environment, Incentives for Risk Takers more »
08:18:57 am, by editor of MarketObservation.com, 190 words
Categories: Economics United States, Economics Global
NYT: The Sad Statistic That Trumps the Others, August 20,2011THERE’S been a lot of bad economic news lately, yet we may be overlooking the most disturbing development of all: our economic productivity has been weakening. This isn’t just a problem for… more »
Chile^s former finance minister and Columbia University visiting professor Andres Velasco is convinced that Eurbonds, in combination with intelligently designed fiscal rules, are the way to go for crisis resolution:Eurobonds without FearAndres Vela… more »
08/20/11
I find following thoughts extremely valuable. Experiences during the financial crisis have "put risk capital on the sideline". It will be key that investors regain confidence.
Andrew G Haldane, Executive Director, Financial Stability and Member of the… more »
EuroIntelligence: The Big Cannoli, by Barry Eichengreen, Berkeley, August 17, 2011
While Europeans were off basking on the shores of the sunny Mediterranean, the crisis was not on holiday. If you’re back, reading this, you will know that while you w… more »
04:10:01 pm, by editor of MarketObservation.com , 31 words
Categories: Investment, Central Banks/Government
Historically low Treasury yields are rippling across the economy. Simon Constable argues that the Fed should tighten low-interest rates at the risk of inflation.
August 19, 2011
Keywords: US Treasuries, Yield on Treasuries more »
Keywords: 10 Year US Government Bond, Sovereign Bond Yields more »
09:10:02 am, by editor of MarketObservation.com, 5 words
Categories: Economics United States, Economics Global
Abby Joseph Cohen, Goldman Sachs senior investment strategist: NY Fed President William C. Dudley:layer" height="380" wid… more »
09:01:21 am, by editor of MarketObservation.com, 117 words
Categories: Economics United States, Economics Europe
Telegraph: Bond markets signal 'Japanese' slump for US and Europe, August 18, 2011
The global credit markets are braced for deflation and perhaps depression.
Panic flight to safety has pushed the yield on 10-year US Treasuries below 2pc for the fir… more »
08/19/11
Keywords: Debt Disaster, Uncertainty, Volatility more »
07:39:00 am, by editor of MarketObservation.com , 83 words
Categories: Economics United States, Economics Global
According to Prof. Steve Horwitz, one contemporary economic myth is that the cost of living has consistently risen for Americans over the past century. In fact, prices are higher today than they were 100 years ago. However, prices today have been heavily… more »
James Hamilton states that the US is "not dead yet":
Econbrowser: Not dead yet, August 17, 2011
but he mentions the fragile situation:
"There's still plenty to worry about, and deep anxiety by consumers and investors can be both an indicator of… more »
Morgan Stanley sees more difficult times ahead for the US and the EuroZone. They say that monetary policy could be further loosened but that measures to reduce sovereign debt are not sufficient. Inflation is currently definitely not a problem in slow gro… more »
Find here a MarketWatch article about the "investment moves" Marc Faber is now proposing. It is one opinion, but always interesting to think about. Marc Faber's moves are preparing for hyperinflation.
MarketWatch: 5 money moves ‘Dr. Doom’ is making n… more »
08/18/11
As Switzerland is going through a severe economic period due to the strong Swiss franc, the Swiss Federal Council yesterday decided to provide Swiss franc 2 billion of economic stimulus to the Swiss economy. According to the latest knowledge, beneficiari… more »
The Tobin Tax is again on the table after the Merkel Sarkozy meeting:
Reuters Blog: Merkel and Sarkozy are right about a Tobin tax, August 17, 2011
The issue of such a tax has been raised again and again during the crisis, for example by the EU par… more »
08/17/11
Source: Swissquote more »
Spiegel Online International: Debt Brakes Are the Best Way Out of The Crisis, August 11, 2011
Keywords: Sovereign Debt Crisis, Debt Limits more »
08/16/11
EuroIntelligence: “When the time is right”, August 16, 2011The debate on Eurobonds has reached fever pitch in Germany. Sueddeutsche Zeitung writes that the German government was now actively discussing Eurobonds internally. While Angela Merkel was st… more »
Reputed Frankfurter Allgemeine Zeitung (FAZ) reports that more and more members of Angela Merkel's Christian Democratic Party (CDU) support the introduction of a Eurobond. Angela Merkel herself has opposed this step so far.Frankfurter Allgemeine Zeit… more »
MarketWatch: Asia stocks mostly higher, with tech shares strong, March 15, 2011- Asian Stocks started mostly higher on Tuesday- Mainly some technology firms show strength- Volatility is still high- Meeting between Merkel and Sarkozy could bring… more »
Chatrath, Arjun, Dailing, Ryan , Miao, Hong and Ramchander, Sanjay, Currency Jumps, Cojumps and Trading Profits: Role of Macroeconomic Announcements (June 28, 2011). Available at SSRN: http://ssrn.com/abstract=1874486
Abstracts:
"This paper identif… more »
08/15/11
''MY NAME IS BOND..EUROBOND'' Jakob von Weizsäcker(function() { var scribd = document.createElement("script"); scribd.type = "text/javascript"; scribd.async = true; scribd.src = "http://www.scribd.com/javascripts/embed_code/inject.js"; var s = document.g… more »
Spiegel: Europe Pressures Merkel to Accept Euro Bonds, August 15, 2011Keywords: Eurobonds, European Union more »
03:36:38 pm, by editor of MarketObservation.com, 7 words
Categories: Economics United States, Economics Global
Keywords: Gold Standard, Bretton Woods, Monetary System more »
Un)happy Birthday, Fiat MoneyKeywords: Fiat Money, Central Banks more »
Source: Tim Iacono
Keywords: US Economy, US Consumer Sentiment, Michigan Consumer Index, S&P500 more »
Bloomberg Video: Haerter Says Swiss Franc Is 'Overvalued' by 30 to 40%, August 15, 2011Thomas Haerter, chief strategist at Swisscanto Asset Management AG, talks about the outlook for the Swiss franc. He speaks from Zurich with Linzie Janis on Bloombe… more »
MarketWatch: Japan’s economy shrinks less than feared; Post-earthquake GDP better than economists forecast, Aug. 14, 2011
On March 17, 2011, right after the dramatic Japanese earthquake, we posted various links to papers and articles which deal with r… more »
08/14/11
Will USD Get Safe Haven Flows with JPY and CHF Undermined by Their Central BanksFor currency traders there is concern that the BOJ is ready to come back into the market and intervene for a second straight week and combining that with the talk and act… more »
08/13/11
Tyler Cowen (George Mason University) sees deep economic problems in the US:
- stagnation of real wages since a long time
- not enough innovation
- education system has to be improved
- start up activity is at a too low level
Tyler makes an in… more »
Some good thoughts of entrepreneur and blogger Barry Ritholtz ("The Big Picture") on the US economy and government policies. He says that government should leave something behind (e.g. infrastructure) that is useful for the private economy.… more »
08:14:01 am, by editor of MarketObservation.com , 386 words
Categories: Economics United States, Economics Global
In this interesting paper the authors do research on the impact of cost savings and tax increases on growth. In tendency, they come to the conclusion that fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spendin… more »
08/12/11
Keywords: Budget Deficits, Sustainable Public Finances more »
The Euro/Swiss franc exchange rate is currently in the range of 1.10. This is still a massive overvaluation, as an OECD analysis has shown:
MarketObservation: OECD: Swiss franc is massively overvalued against the Euro and the Dollar, July 22, 2011… more »
11:20:19 am, by editor of MarketObservation.com , 19 words
Categories: Investment, Banks/Investment Banks
Source: WSJ; click on picture to get to original article
Keywords: Banks, Bank Stock Development, Great Depression, Financial Crisis more »
Financial Times Deutschland: Schweiz könnte Franken an den Euro fesseln, August 11, 2011 more »
08/11/11
Why not fix the exchange rate between the francand the euro? more »
12:48:01 pm, by editor of MarketObservation.com , 78 words
Categories: Economics United States, Economics Global
In the short term, a weak dollar is a tremendous support for the US economy. A further weakening of the dollar as compared to world's major currency and the Chinese yuan is the most likely scenario. The US will do almost everything to force a shift in tr… more »
11:42:38 am, by editor of MarketObservation.com, 120 words
Categories: Economics United States, Economics Europe, Economics Switzerland
Following graph shows the public expenditure quote (government spending as a percentage of GDP) of the US, Germany and Switzerland as well as government income. The picture for the US is dramatic. Even before the financial crisis the gap between public s… more »
Keywords: Tax Havens, Non-oppressive Governments more »
Thomas Jordan, Vice-President of the Swiss National Bank says that the Swiss Economy is in a dramatic situation due to the strong appreciation of the Swiss franc as compared to the Euro and the Dollar, in combination with a starting slow down of the glob… more »
09:25:20 am, by editor of MarketObservation.com , 45 words
Categories: Economics United States, Economics Global
Harvard economist Greg Mankiw says Fed Chairman Bernanke may use a price-level target to spur U.S. economic growth while minimizing fears of Japanese-style hyperinflation.
Youtube Video: In Fed's toolbox, one untested method remains: economist, August… more »
09:13:32 am, by editor of MarketObservation.com , 284 words
Categories: Economics Europe, Economics Switzerland
Spiegel Online International: What the Financial Crisis Means for Germany, August 9, 2011
Looking at the problems of the Eurozone, Germany can definitely not be considered as a safe haven:
"For the time being, Germany itself looks safe from attack… more »
Reuters: Goldman says QE3 likely after dovish Fed statement, August 10, 2011Goldman Sachs said on Wednesday a third round of quantitative easing from the Federal Reserve is likely after the U.S. Federal Reserve promised to keep rates at extraordinari… more »
08/10/11
This looks somehow familiar...
Pettis on China is a Must Read
Keywords: China, Chinese Economy more »
Spiegel gives a good overview of national debt levels in an interactive graph:
Click on the graph to go to the original page. The graph shows that there are still many nations which have reasonable debt levels. Maybe they should form a "Careful sp… more »
Several countries are on a currency-war to try to push their currencies to the bottom, a practice which has led in some ways to the crisis climate in the global economy, Dow Jones Newswires's Mike Casey reports.
August 9, 2011
Keywo… more »
NYT: The Downgrading of a Debtor Nation, by Menzie D. Chinn and Jeffry A. Frieden, August 8, 2011
"An economically responsible, politically feasible distribution of the costs of working our way out of the crisis will require higher taxes, a more effic… more »
Keywords: Economic Insecurity, Gold Price more »
Tim Iacono on the announcement to keep interest rates low through mid-2013:
"By promising to keep rates low gat least through mid-2013 in the policy statement released earlier today, the central bank assured the nationfs big banks of continuing to… more »
08/09/11
Keywords: Socialism, Role of the State more »
10:41:51 am, by editor of MarketObservation.com , 70 words
Categories: Economics United States, Economics Global
Chinese government officials tell the US that they are addicted to debt. Looking at the US balance sheet they might not be that wrong in this case. Getting healed from this addiction means to reduce spending dramatically and to start to give more weight… more »
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