Your daily Economy dose!
The Irish Times and other media today carried a report on the publication of a new globalisation index produced by Ernst & Young which places Ireland third on the globalised states list. The EY index joins an increasingly crowded field, so what follows is a bluffer’s guide to globalisation indices. As always, a good starting point (but never more than that) is the relevant Wikipedia entry
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Globalised Ireland
The Caribbean Sea’s islands are perfect arenas for the study of the interactions between populations and economies. The Caribbean Sea’s integration into the world economy in the 15th and 16th centuries saw complete replacement of the pre-Columbian population by vast numbers of migrants, voluntary and otherwise, from Africa and Europe, these migrants forming slavery-based plantation societies
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How emigration made Barbados rich
Story from Life News . (H/T ECM) Excerpt: International Planned Parenthood Federation (IPPF) recently released its annual performance report for 2008-2009. Despite an economic downturn and a slight decrease in annual income, the abortion industry giant boasts of increased activity across all of its lines of work — including condom distribution, advocacy and abortion services
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Planned Parenthood does over 1.1 million abortions worldwide
India is not an overnight wonder or a quick fix.Growth of the Indian economy is based on solid foundation.The foundation of the economy goes back to thousands of years .Five hundred years ago India made up to 30% of the world economy …
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Curbs will have little impact on a rampaging bull – GLG News
James Hansen – the world’s leading climate scientist fighting against global warming – told Amy Goodman this morning that cap and trade not only won’t reduce emissions, it may actually increase them: The problem is that the emissions just go someplace else.
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Leading Global Warming Crusader: Cap and Trade May INCREASE CO2 Emissions
I know the parallels are not exact but this story is a reminder that our current banking situation—involving banks that don’t want to lend, governments exhorting them to do so and banks focused heavily on attempting to escape government control—is not exactly unique. Some highlights: Bank executives say they itch to make profitable loans, as many as possible, but are struggling to find qualified borrowers. They also say that the administration is asking for increased lending even as it pursues financial reforms that will limit the ability of banks to make loans.
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Obama Asks US Banks to Lend
by Edward Hugh: Barcelona Well, if John Lennon had still been around today he would undoubtedly have entitled his song Norwegian oil, but whatever way you want to put it Norway is back in the news, and this time not because of adolescents who find themselves with no alternative to sleeping overnight in the bath-tub, but rather because its central bank has been put in a position where it has little alternative but to raise interest rates, even if in fact it would be more comfortable for it not to do so. So, not being in the habit of looking for a quiet life, decision makers over at the Norges Bank decided last week to put themselves in the hot seat by lifting the banks main rate by 25 basis points to 1.5 per cent and in this inauspicious and modest way entered the history books as the first European central bank to raise interest rates since the financial crisis started to ease
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Norwegian Wood
UKTI / China-Britain Business Council Seminar Opportunities in China’s ICT Stimulus Programme Tuesday 13 October 2009, 10:00 – 12:00 China British Business Council, 1 Warwick Row, London, SW1E 5ER Supported by: UK Trade & Investment and China-Britain Business Council Speakers Jeremy Gordon – Business Specialist, UK Trade & Investment Ting Zhang – CEO , China Business Solutions Ralph Rogers – China Business Advisor, China-Britain Business Council In November 2008 China announced a RMB4 trillion fiscal stimulus plan. Additional spending has since been announced with a total now in excess of RMB6 trillion
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Event: Opportunities in China’s ICT Stimulus Programme, 13 October, London
ESRI forecasts for 2010 allow me to update the internal/external balance plot first used by Brendan Walsh and myself to describe the lengthy cycle 1975-2001. The first chart, with data up to 2006 shows the previous big counterclockwise cycle: first the balance of payments goes into deficit (1975-1979); then the correction begins and unemployment rises (1980-85), the balance of payments deficit contracts (1981-87) and moves into surplus (1991-93); finally unemployment comes down again (1993-2000). Looks like the Irish hare is taking a shorter and sharper curve this time. The balance of payments blow-out (2003-2008) has been much smaller in amplitude and shorter in duration than in the 1970s and 1980s. The rise in unemployment (2007-2010) is much faster than in 1981-86. Sooner or later we’ll get back to the bottom centre of the graph with low unemployment and zero balance of payments. The first chart shows data up to 2006, the second one joins the dots for 2007-2010 according the the ESRI forecasts published this morning
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Another lap for hare
Thanks to Karl D. for the tip-off on this story. Anglo Irish has announced that it will not be paying coupons on its Tier 1 subordinated bonds and that this decision was required by “The European Commission, as a condition of its approval of the Government’s capitalisation of the Bank of up to €4bn.” In a related story, the International Swaps and Derivatives Association has decided that a similar non-payment by Bradford and Bingley represents a “credit event” which will trigger CDS insurance. (Bloomberg story here , official announcement here .) Presumably, Anglo’s actions will at some point trigger the same decision from the ISDA. This will mean that those Anglo bondholders holding CDS insurance will receive full payment. Anglo’s announcement also discusses its “liability management” exercise, in which it is planning to buy back outstanding debt at below par. Presumably, however, those insured by CDS will no longer be interested in a deal of this sort. It also makes it likely that much of the debt that Anglo is planning to buy back at a discount will be owned by CDS issuers.
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Anglo Stops Payments on Bonds, CDS Implications
“There are many voices saying that the worst of the downturn is over, but there is no room for complacency.” … If we do not take the necessary action now to strengthen the world economy and put in place the conditions for sustainable world growth, we will be confronted with avoidable unemployment for years to come.” Gordon Brown, July 6, 2009 From The Times: Recession may get worse, Gordon Brown warns world leaders The worst of the recession may be yet to come and world leaders are in danger of hampering the recovery, Gordon Brown will say today. As he begins a week of meetings with world leaders, the Prime Minister will strike an unexpectedly gloomy note about the prospects of an upturn and will demand that fellow heads of government “sound a second-wake up call for the world economy”
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Gordon Brown Sounds "Second-wake up call for the world economy"
Over at the Financial Times, the careful, insightful, and highly intelligent Martin Wolf writes: FT.com / Columnists / Martin Wolf – Rising government bond rates prove policy works : Is the US… on the road to fiscal Armageddon? Are recent jumps in government bond rates proof that investors are worried about fiscal prospects
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(Small) Interest Rate Increases Are Good News, Not Bad News (Washington Post Crashed-and-Burned-and-Smoking Watch)
While the London G20 Summit represented a step towards a more inclusive global governance system, further institutional reforms are badly needed to ensure the interests of low-income countries are adequately represented, according to national leaders and other participants gathered at this year’s World Economic Forum on Africa in Cape Town. In particular, they urged the major industrialized countries to accept long-stalled changes in the governing structures of the IMF and the World Bank. “A critical lesson from the current crisis is the need for a transformed global financial system,” Jacob Zuma, President of South Africa, said in his opening address
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World Economic Forum on Africa opens with call for global governance reforms
I had the chance to chat with Governor Deval Patrick for a few minutes today at Microsoft’s NERD Center, toward the end of the Innovate MassTech meeting (aka the IT Collaborative Study Group Meeting.) So I asked him about non-competes. Paul Sagan, the CEO of Akamai, had just said on stage that he is in favor of keeping non-compete agreements legal and enforceable in Massachusetts, and that he’d seen no data that says that non-competes have any effect on making us less competitive
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Gov. Patrick on Non-Compete Agreements in Massachusetts
Carlo A. Favero IGIER-Bocconi University The financial crisis and the recent fluctuations in the stock market have prompted investors to ask the question “Are stocks still the best investment for the long run?” Figure 1 reports the value over time in real terms (nominal returns are deflated by the inflation of the Consumer Price Index) of 1 dollar in 1900. 1 dollar invested in the SP index at the beginning of the twentieth century has risen rather steadily to 800 times the initial value at the end of the century and it has then fluctuated to reach 500 hundred times the initial value at the end of 2008.
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Stocks for the long-run?
In between favorites like WWII documentaries , Modern Marvels , and Gangland , the History channel occasionally dabbles in supernatural themed programming. Normally, shows like Monster Quest make me change the channel about as fast as Designing Women. This time however, History will be taking on one of the more colorful incidents of desi-themed hysteria in recent times – no, not Sanjaya but close, the New Delhi Monkey Man – Engrained in the history and mythology of India are tales of a ferocious creature, half-man, half-ape.
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The Monkey Man Cometh
The OECD says yes GIVEN that the current global recession had its origins in a global credit crunch, it is not surprising that there has been much discussion of whether fixing the financial system (particularly, getting banks lending again) is a necessary condition for a broader economic recovery. Some, like Japanese economist Keiichiro Kobayashi, have argued that the answer is an emphatic yes, pointing to Japan's experience in the 1990s. Paul Krugman didn’t agree with Mr Kobayashi’s interpretation of the Japanese experience (but Mr Kobayashi argued in response that Krugman was using the wrong period in Japanese history to make his point)
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Can output recover before credit does?
New products tend to come and go rather quickly at Japan’s convenience stores, especially in the case of soft drinks and instant ramen (and candies and seasonal alcoholic beverages and…you get the point). A few days ago I wandered into the local Lawson’s to be greeted with a 新発売 (newly on sale) product that surprised me a bit: I LOHAS （い・ろ・は・す） water. LOHAS, of course, stands for “ Lifestyles of Health and Sustainability ,” and it is something of a dishonest, soulless marketing scam marketing demographic aimed at assuaging guilt amonst urban yuppie types self-labeled “green” consumers (whose actual consumption patterns and lifestyles tend to resemble anything but sustainability).
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I LOHAS water now on sale in Japan – guess the producer
As reported earlier today by Japan Probe, Paul Krugman recently visited Tokyo and offered an evaluation of some of the economic stimulus attempts the Japanese government has made thus far. Krugman gave the lowering of expressway fees to a flat 1,000 yen a score of 40 out of 100, due to the fact that such a measure might increase traffic jams and the sales of gasoline. Krugman scored the 12,000 yen rebate program a 0 out of 100, and reserved judgement on the government’s new program to offer “eco points” to consumers who make purchases of “green” products
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Paul Krugman visits Japan
A confession: I have been too complacent about technological fixes for the twin problems of climate change and finite oil and gas reserves. Without looking very closely at the numbers, I figured that if politicians would finally get their act together, and if we avoided some of the more unlucky possibilities (such as the release of methane ice from the oceans), cheap, clean energy would be within our grasp, given suitable research incentives and some technological brilliance. Looking at progress in computer chips, I dreamt about how cheap photovoltaic solar panels might become over the next 50 years.
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Switch to renewable energy? If only it were that simple
“There is an extremism premium that is being paid across the planet and we all believe this is a moment of opportunity, and the question is whether we’re going to seize it,” said John F. Kerry, Chairman, Senate Committee on Foreign Relations, and Senator from Massachusetts (Democrat), USA, at a plenary session on security at the World Economic Forum on the Middle East. He told leaders that the “greatest security challenge comes back to less of an economic challenge and more of a political challenge that we are facing.” The Israeli-Palestinian conflict lies at the heart of this political challenge.
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Kerry challenges leaders to stop paying an "extremism premium"
Hickey and Walters ( Bespoke ) submit: The unofficial earnings season came to an end with Wal-Mart’s report yesterday. In general, stocks performed well throughout the reporting period, and below we highlight the ones (> $5) that had the best one-day reactions to their earnings reports. For stocks that report in the morning, we use that day’s change, and for stocks that report after the close, we use the next day’s change
A survey of 1,000 US adults by Brightkite and GfK Technology has found that people are noticing more types of ads on their mobile phones. Thirty-eight percent of US mobile phone owners recall seeing advertising on their cell phones in the first quarter of 2009, although for smartphone users that rises to 59 percent—smartphone users mostly saw web advertising while regular phone users mostly saw SMS ads. For smartphone users, 23 percent recall seeing SMS advertising, but 20 percent saw ads in mobile social networks, 15 percent saw ads in mobile TV/video, and those seeing ads in a location-based network tripled in the quarter to 15 percent
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Report: People Seeing More Types Of Mobile Ads
ABSTRACT The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world.
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Global Financial Crisis 2008
Tom Lydon (ETF Trends) submits: Exchange traded funds (ETFs) tracking the various bond types available were on a roller coaster ride in the past few months but this hasn’t discouraged investors from looking into these fixed income markets. Since September, fixed-income ETFs have been experiencing a wild ride, writes Paul Amery for IndexUniverse . Long-term government bonds saw a end-year really and then a retraction
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Think Bond ETFs Are Boring? Think Again
The Daily Reckoning submits: By Bill Bonner Last week, the European Central Bank squared its shoulders and joined ranks of the damned. The Times of London reported that in joining up with the US Federal Reserve Bank and the Bank of England, the European Central Bank “pulled out all the stops” in their drive to revive their economies. The ECB announced that it will cut its key lending rate to its lowest level ever and begin a form of “quantitative easing,” in which it will buy corporate debt in order to reduce commercial interest rates
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Economies, Central Banks with Napoleonic Complex: On to Moscow!
When John Taylor formulated many years ago the very simple and well-known Taylor’s Rule for monetary policy to serve as a guideline for short-term interest rate decisions, he suggested basically that the “real” interest rate should be reviewed whenever there was a major discrepancy between actual inflation and a “target”inflation and also indicated that a similar reasoning should be adopted for the so-called output gap (percentage difference between potential full-employment output and effective real RGP).
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Stopping Financial Bubbles through Taylor’s Rule
Sony ( NYSE: SNE ) has released its full year earnings for the 12 months ending March 31st, and its 50 percent share in Sony Ericsson ( NSDQ: ERIC ) helped drag down ts results. We already knew Sony Ericsson was in trouble—it’s first quarter results were dismal and it announced plans to axe 2,000 jobs. For the 12 months ending March 31st Sony reported an equity in net loss from affiliated companies of 25.1 billion yen (US$256 million), a deterioration of 125.9 billion yen (US$1.323 billion) year-on-year
With all the hype about green shoots, “reassuring” stress tests and stock markets rallies, not to mention the fabulous New York weather, I felt a sudden urge to go shopping! Yet, except from a birthday present and the obligatory ticket to Star Trek *The Movie*, I couldn’t do it… I still have trouble convincing myself to splurge on anything that I can’t eat. Just to double-check I don’t suffer from some kind of acute post-crisis hoarding syndrome, I had a look at the data to see how far (or not) I stand from the average American consumer. In fact, the point of the exercise went beyond my own syndrome-check: The green shoot story rests partly on the view that the liquidation of inventories we have been witnessing for the past year and a half will have to give way to a re-building of stocks—read production! I mean, there are only so many times you can go to BestBuy and look for your favorite laptop in vain, before you start screaming at management.
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The Resilience (?) of the American Consumer
Yesterday I testified to the House Subcommittee on International Monetary Policy and Trade (part of the House Financial Services Committee). The hearing’s title was “Implications of the G-20 Leaders Summit for Low Income Countries and the Global Economy,” and the main topic was whether Congress should support an extra $100bn for the IMF that the Obama Administration agreed at the G20 summit in early April ( witness list, webcast, and written testimony ). The committee was mostly in favor of the US continuing to play a leading role in supporting the IMF, but pressed the witnesses to explain whether the IMF could lose this money (highly unlikely), how this would protect American jobs (definitely, but hard to quantify precisely), and if the broader package of IMF reform should also be supported (e.g., the proposed gold sales are being reassessed, to see they could generate more resources for aid to developing countries)
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Can The US Save The World? (House Testimony)