It’s that time again—every quarter RGE provides clients with macroeconomic outlooks for the countries we cover, along with updated country-by-country GDP and CPI forecasts. Our latest outlook, examining our projections for Q2 and beyond, is hot off the presses .

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RGE’s Wednesday Note – Reading the Tea Leaves for Q2 and Beyond

In the wake of suing Goldman Sachs for fraud in the creation and sale of mortgage-backed derivatives, the Securities and Exchange Commission said it will look closely at other similar transactions by other big Wall Street banks, according to a recent Wall Street Journal article by Carrick Mollencamp, Serena Ng, Gregory Zuckerman and Scott Patterson (Note: the WSJ appears to have double the usual number of reporters on this story).

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Goldman – Like CDO Abuses Were Prevalent Across Wall Street

The impact of government scrappage schemes continues to dominate European auto sales . As the chart shows, sales were up 9.2% in Q1, and March was up 10.8%, versus 2009.

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EU auto sales rise 9% in Q1

The Greek financial saga is the tip of an iceberg of problems of public-debt sustainability for many advanced economies, and not only the so-called PIIGS (Portugal, Italy, Ireland, Greece, and Spain). Indeed, the OECD now estimates that public debt-to-GDP ratios in advanced economies will rise to an average of around 100% of GDP.

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The Debt Death Trap

A story today by The New Republic about the financial reform efforts in Congress begins ominously: Some two dozen executives from large corporations will be descending on Capitol Hill today to make the case against over-regulating derivatives. Oh, no.  This financial stuff is hard enough to follow without also having to worry about a legion of Wall Street defenders assaulting our legislators.

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Blanche Lincoln: A New Hero Of The Left?

There are increasing signs that China is getting serious about tightening its lending policies. The above chart, from China’s central bank , shows how lending has fallen since January. Then, it was 14% down versus 2009.

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China’s bank lending falls 43% in Q1

The SEC’s enforcement action against Goldman Sachs will deepen the “mistrust among investors that the market is rigged against them,” according to Jeff Cox in his recent CNBC post, especially if it is shown to be part of a systemic moral bankruptcy of major Wall Street banks.

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Capital Markets Will Suffer as the Distrust of Wall Street Grows

By Claus Vistesen: Copenhagen To be an economist these days is a rare privilege and especially; it is a privilege to be a blogging economist since there is just so much good material to write about at the moment. On the one hand, there is the unfolding unravelling of Goldman Sachs (loads of material out there already, but just read Felix and you will be fine) and on the other there is the increasingly ominous signs that the Eurozone as we know it is about to become a thing of the past [1].

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Liquidity Giveth, Liquidity Taketh – The IMF on International Capital Flows

Today’s Daily Angle comes from  Wikinvest Wire member  Yves Smith of Naked Capitalism. You can read  the full article on NakedCapitalism.com We met last week with a savvy  German investor, one who unlike many of his peers, is well aware of the German bank exposure to Greek and other Club Med debt. He argued that  Greece will default within six months

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Was Greece Rescue Futile, and is Portugal Next?

Presidential and vice-presidential candidates in Colombia during presidential debate in Barranquilla organized by Fedesarrollo. (Photo Credit: El Heraldo) Being in the US it is sometimes hard to understand the dynamics of elections abroad.

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Colombia: It’s all about the economy

A front page story in today’s New York Times details how large banks are profiting from serving a majority of microfinance clients, fueling debates about the high interest rates they charge to poor borrowers.

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On profits and progress

by Edward Hugh: Barcelona Angela Merkel is a Chemist. In her doctoral thesis – entitled “Untersuchung des Mechanismus von Zerfallsreaktionen mit einfachem Bindungsbruch und Berechnung ihrer Geschwindigkeitskonstanten auf der Grundlage quantenchemischer und statistischer Methoden” – she demonstrated herself to be a thoroughgoing expert when it comes to analysing the speed of disintegration of chemical compounds once the bonds which hold them together are weakened. Unfortunately she is now having to apply all this acquired expertise and know-how in a determined attempt to avoid the break up and falling apart, not of a highly complex chemical substance, but of an even more complex economic and political one, and the bonds which are the focus of all her attention right now are not chemical, but financial and social

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Angela Calling

Over the past few years, the drop in employment has been steep and painful. A recent reassessment of the job count shows that even steeper declines have taken place than initially thought—both across the U.S. as a whole and in the Seventh Federal Reserve District, which covers all of Iowa and most of Illinois, Indiana, Michigan, and Wisconsin.

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Job Revisions Downward

by Edward Hugh: Barcelona Well, I for one can’t help thinking that it’s now well time we all stopped getting carried away with the use of so many acronyms. Not only may one man’s meat easily prove to be another’s poison, it may even be that for some the entire meal will be so distasteful as to prove totally indigestable

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Serious Problems Emerge For The F-UK-De Group Of Countries

Technorati and Ingboo have partnered together to provide an all new kind of subscription experience for Technorati content, including search results. Look for a blue Ingboo icon for a full range of subscription options. Feeds are also available for: Hottest Blogosphere Posts Latest Original Articles from Technorati The Technorati Blog We also have channel feeds, writer feeds, and tag feeds, which can be found on their respective pages.

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New Search Results, from Technorati and Ingboo

by Edward Hugh: Barcelona In the time of my confession, in the hour of my deepest need When the pool of tears beneath my feet flood every newborn seed There’s a dyin’ voice within me reaching out somewhere, …………. It’s not often that I await the ECB after-meeting press conference statements of Jean Claude Trichet with such an intense feeling of anxiety and bated breath. But this time, as the song goes, it will be different

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Hanging In The Balance Over At The ECB

According to economists’ reckoning, the recession very likely ended this past summer, meaning that the U.S.’s national output has begun to grow once again (from a deep trough). But for many households, the direction of recovery has much more to do with job growth, job opportunities, and hours worked. And so, the job watch is on

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Watching for Job Rebounds

by Edward Hugh: Barcelona “If you don’t fully understand an instrument, don’t buy it.” To the above advice from Emilio Botín, Executive Chairman of Spain’s Grupo Santander, I would simply add one small rider: Don’t sell it either, especially if you are a national government trying to structure your country’s debt. In a fascinating article in today’s New York Times , journalists Louise Story, Landon Thomas and Nelson Schwartz begin to recount the mirky story of just how the major US investment banks have been able to earn considerable sums of money effectively helping European governments to disguise their growing mountain of public debt. Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

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Just What Is The Real Level Of Government Debt In Europe?

by Edward Hugh: Barcelona A new kind of battle is going on out there at the moment. In what must surely be a new twist to the old dialectic of blow against blow argument, a combination of the internet age and sophistocated data management software is adding an additional and striking dimension to the current crisis debate, let’s call it the birth of the “charts war”

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Chart Wars

This week, RGE tracked a series of events that revealed the Obama administration’s juggling act: an effort to maintain growth, tame the fiscal deficit and garner the congressional support needed to implement policy. Democrats’ loss of the Massachusetts Senate seat raised questions about President Obama’s ability to take forward reforms on financial regulation, fiscal austerity and health care

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RGE’s Wednesday Note – Obama’s Recent Regulatory and Fiscal Proposals

February 3, 2010 Recovery Hampered by Peg to Euro For Immediate Release: February 3, 2010 Contact : Dan Beeton, 202-256-6116; 202-239-1460 WASHINGTON, DC – The Latvian economy has suffered the worst two-year decline in output on record and will have trouble recovering with its currency tied to the euro, according to a new report from the Center for Economic and Policy Research.

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Fixed Exchange Rate Has Produced World’s Worst Recession In Latvia, Says New CEPR Report

Its nearly 18 months since the US government nationalised the 2 home loan giants, Fannie Mae and Freddie Mac, at the start of the September 2008 financial crisis. Today, their current obligations amount to $3.7trn – larger that the total UK economy. And the Wall Street Journal notes that their cumulative losses on home loans had reached $291bn by the end of 2009

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No news on Obama’s plans for Fannie and Freddie

Today’s Daily Angle comes from  Wikinvest Wire member  Yves Smith of Naked Capitalism . You can read  the full article on NakedCapitalism.com As readers may know, the financial reforms proposed by the  Obama administration barely deserve the name. The late-in-the-game efforts to rebrand the effort by putting  Paul Volcker in the forefront and patch up one of the gaping holes, that the government is backstopping risky trading businesses ( Goldman Sachs has issued  FDIC guaranteed bonds) illustrates the typical Obama chasm between rhetoric and action

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FDIC Proposes Tough-Minded Securitization Reforms; Industry Howls

by Edward Hugh: Barcelona José Luis Rodríguez Zapatero, Spain’s prime minister, said in Davos this week : “We are a serious country and we will fulfil our promises.” With these words Spain’s Prime Minister sought, during his visit to Davos last week to reassure international investors that Spain, despite the severity of the recession it is currently suffering, and the major challenges facing its banking system, is not about to become another Greece. Just to prove the point he had Labour Minister Celestino Corbacho and Economy Minister Elena Salgado announce in short order that a) Spanish citizens are going to work two more years each in the longer term, and b) face continuing and sweeping cuts in services and increases in taxes in the short term

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Spain Is A Serious Country

From the Fed: The January 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices The January survey indicated that commercial banks generally ceased tightening standards on many loan types in the fourth quarter of last year but have yet to unwind the considerable tightening that has occurred over the past two years. The net percentages of banks reporting tighter loan terms continued to trend lower. Banks reported that loan demand from both businesses and households weakened further , on net, over the survey period

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Fed: Banks Cease Tightening Standards, Loan Demand Weakens Further