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Monthly Archives: September 2010
By Martin Fluck | Published: September 24, 2010
In The First Green Trade War, I facetiously suggested any conflict with China over trade imbalances could also be viewed from the environmental perspective, given that China is flooding Western markets with its heavily subsidized environmental technologies.
By Martin Fluck | Published: September 21, 2010
If the UK’s banks don’t increase lending to small business, then the government is going to give them a serious kicking. At least so says Business Secretary Vince Cable, who will go on the “war path” and impose financial penalties such as an increase in the banking levy or taxes. However, because of political imperatives to increase inflation, Cable, like the Bank of England seems to be willfully misinterpreting the economic evidence, while the risk of higher interest rates grows.
By Martin Fluck | Published: September 20, 2010
It’s been apparent for some time that the IMF is no longer an independent institution but an arm of the European financial elites. With Dominique Strauss-Kahn at the helm when the financial crisis hit, Germany and France have cynically been able to use the IMF for their own ends, dropping ever larger sums into the EU with ever fewer conditions, to protect German and French banks that have huge exposures to the PIIGS. Angering the very same Asian countries that were dictated to by the IMF in 1997, and who are now being asked to pay the bills, and stretching US patience to the limit, it is all likely to end in tears.
By Martin Fluck | Published: September 19, 2010
As if the UK economy doesn’t have enough problems, the new coalition government is going out of its way to create new ones, by pursuing its self-indulgent ‘clean’ energy policy. You’d imagine that it would be self evident that cutting greenhouse gas emissions by 34% within 10 years is completely hair brained – and reducing emissions by 80% in 2050 is economic suicide. But developments in California may soon highlight the prosperity terminating effect of such clean energy policies – now that it has become a major election issue in the California midterms.
By Martin Fluck | Published: September 16, 2010
Deutsche Bank increasingly seems to be in the misinformation business. Believe it or not, it is now crawling out on a limb that has already broken off, and is trying to defend Michael Mann’s infamous “hockey stick” graph. After its recent rose-tinted analysis of the global economy, the incompetent and one-sided report on climate change it has just published hardly inspires confidence in the veracity of anything they say – especially following its failure to come clean on its real sovereign bond exposure.
By Martin Fluck | Published: September 14, 2010
As the Angry Analyst warned, the fiscal austerity being implemented in Greece and the other Club Med countries would soon be felt because Germany has been relying on exports to these countries – not China – for growth. Economic sentiment, as measured by the ZEW institute, collapsed in September. This is particularly significant, because as can be seen from the accompanying chart, it leads the other key indicator produced by the IFO institute. And where this indicator leads, German industrial output is sure to follow.
By Martin Fluck | Published: September 14, 2010
You’d think, given the critical role global imbalances played in building up the systemic risk that caused the Great Recession that addressing them would be an urgent issue. China’s everyday flouting of World Trade Organisation trade rules would be bad enough in normal circumstances. But now when Beijing clearly stands in the way of economic recovery, Paul Krugman is right to be exasperated that the Chinese have been allowed to keep taxing imports while subsidizing exports.
By Martin Fluck | Published: September 12, 2010
As if further evidence was needed that the German banks have been lying about the true state of their balance sheets, and that a German banking crisis is in the offing, we learn that German mortgage lender Hypo Real Estate will receive another €40 billion of state guarantees.
By Martin Fluck | Published: September 11, 2010
If Congress votes to penalize Chinese imports and start a trade war it may have a lot to do with the Democrats’ frustration at their inability to build a homegrown clean energy sector. After all, it would be particularly embarrassing if the companies President Obama has boasted about being “the future” were to go bankrupt. So, because the green stimulus has failed to live up to the hype, and mostly created new jobs abroad, leading Democrats may now think the answer is to restrict imports.
By Martin Fluck | Published: September 10, 2010
On the question of its undervalued currency China may have finally overplayed its hand. Following a number of impolitic moves on the geo-political front, it looks like the U.S. is finally in the mood to walk the talk and force China to revalue its currency – even if it means slapping import tariffs on [...]