Credit Writedowns

Germany had a relatively small trade surplus in the early 1990s. But after the euro was formed, the surplus vaulted higher. The clear implication is that Germany's export sector benefitted hugely from the introduction of the euro.

For most market watchers, it shouldn't be a surprise that easy money has an (intended) effect on markets in increasing risk appetite as 'risk-free' returns diminish. This cycle is no different. A number of today's articles point to a…

Many orthodox economists ironically adopt something close to a “loan pusher” argument: the excess global saving pushed interest rates down, leading to excessive borrowing by debtor nations that consumed beyond their means. Although the…

I don’t want to be too glib here. I recognize that policymakers are in an extremely difficult position and that there is no longer any easy solution, but railing at the markets rather than trying to understand why they are doing what they…

The economy remains in solid shape, with exports, IP, retail sales all holding up well despite the sharper US slowdown. GDP rose 4.6% y/y in Q1, and is tracking at a similar rate for Q2. Manufacturing PMI rose to 55.7 in June from 54.3 in…

The Empire State Manufacturing numbers showed greater growth for both production and employment than in the previous survey. These are the kind of numbers that are supportive of recovery. Nevertheless, the peak in disposable personal income…

A recent story in German magazine Der Spiegel highlights the efforts in 2005 of German Chancellor Gerhard Schroeder to relax the penalties for deficits in breach of the euro zone's stability and growth pact. It is a good review of the…

On the heels of a sovereign downgrade, the following press release was issued by Moody's Investors Service today in conjunction with its ratings review of several Italian banks.

Just to put some meat on the bones around the cyclical downturn turning into recession, the personal income data paint a negative picture absent debt accumulation. What we see in recessions is that personal income leads the cycle and when…

Retail sales are at recessionary levels right now, having dropped for a third consecutive month. I need to flag the inventories data that came out this morning in the US as the only thing between us and outright recession.