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Measure used for GDP calculations in retail sales fell 0.3% for the second month
The June retail sales report was simply dismal. Not only did sales decline by 0.5% in June rather than rise 0.2% as the consensus expected, but the April data were revised. The measure used for GDP calculations, excludes gasoline, auto…
Daily: Cutting interest on deposits at the ECB won’t spur lending since loans create deposits
Daily commentary
Since I have a decent amount of links, I thought i would do a special Sunday daily commentary. The issue I wanted to highlight is credit and how it gets created. At some point I may make a longer version of this to flesh…
Daily: On Amazon’s reach and Apple’s aggressive moves to stop Android
The FT has a great story on Amazon out today that is a must-read. It chronicles how deeply Amazon has become embedded in the architecture of the retail world in today's digital age. In the other bit of tech news that I thought noteworthy,…
The Real LIBOR Scandal
Whatever can be said for and against Barclays and Bob Diamond, the story is in danger of exhausting itself at the wrong link in the chain. It has sidelined BubbleTV's around-the-clock coverage of Facebook. Mark Zuckerberg's dog walker has…
Full text: Moody’s downgrades Italy’s government bond rating to Baa2 from A3, maintains…
Moody's Investors Service has today downgraded Italy's government bond rating to Baa2 from A3. The outlook remains negative. Italy's Prime-2 short-term rating has not changed.
Daily: Data not really pointing to recession outside of Europe
Most of the links are about Europe as usual but I think the breadth of news today is good. I would like to highlight the conflicting economy stories out there. While Europe remains mired in recession, the rest of the world is still…
The euro disaster is about more than just current account imbalances
The problem cannot simply be a problem of current account imbalances—we’ve got them all across the US states. And the US, itself, runs a chronic current account deficit. But the US federal government is sovereign, it issues its own…
The Growing Pain in Spain
Just when you think that things can get no worse in Spain, they do.
On euro weakness and capital flight out of the euro zone
The large increases in Target2 imbalances at the heart of the euro zone's banking system are widely considered not just a risk to national governments in the event of a eurozone breakup, but also a sign of capital flight. We have seen the…
Europe will need to accelerate implementation of its bail-in and bank resolution scheme
As I wrote regarding the Spanish bank bailout just now, large losses at European financial institutions likely mean that equity will be wiped out. Government will then need to decide how the losses will be paid for. In Spain's case, the…