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Comments on the German model as German GDP contracts
German GDP contracted by an unexpectedly large 0.5% in Q4 2012, according to preliminary estimates of the German government. The contraction is largely due to receding trade volume and does not necessarily mean Germany is in recession…
Why a US government shutdown is likely
Yesterday, I wrote why a US fiscal standoff should mean recession in Q2. As an adjunct to that, I wanted to add a few words about the political process on how we get the standoff to a government shutdown and recession.
Where to look for signs of recession
The last post predicted a recession in the United States for Q2 as a result of the fiscal standoff in the United States. However, as I have been largely upbeat about the underlying fundamentals in the United States, this call is predicated…
The US fiscal standoff should mean recession in Q2
Last Tuesday I said then that the debt ceiling fight would come first but that default on US public debt would be a step too far - and so Republicans would capitulate, forcing them to put their efforts into the sequester cuts. The biggest…
Why the US economic crisis is a depression and not a recession
This is going to be a quick hit. But I thought I should put this out there now that the Platinum Coin idea has been rejected, something that makes this downside scenario more likely. The idea here is that we are in an interregnum period…
Merkel profile dominant in Germany but politics still in flux
The latest opinion polls in Germany show Angela Merkel at her most popular. But her governing coalition partner FDP will almost certainly miss the 5% hurdle in Germany's general election, leaving the political landscape very uncertain.
Buiter expects writedowns on Dutch mortgages, recommends debt jubilee
The Dutch press is reporting that Willem Buiter, the Dutch-born Chief Economist of Citigroup, believes that we are going to witness a slew of writedowns in the Netherlands unless the Dutch can right the economy and stop the fall in house…
German banks need more capital than Spanish ones according to OECD
The Organization for Economic Cooperation and Development (OECD) believes that eurozone banks still have much work to do to strengthen their capital. They warn that many of the entities currently are still below a capital ratio of 5% of…