das auto matters
As most of you will know, VAG have been a little untruthful regarding its emission performance claims and we suspect that this disaster will have serious negative macroeconomic consequences. In the US and Asia, the claims are damaging from a…
US corporate sector and financial engineering
Although plagued by the usual data inaccuracies (many of which seem to have been caused by a shortage of funds at the Federal Reserve), there was much that was of interest within the latest US flow of funds data. Perhaps…
Japan: Yet More Abenomics in the Short Term but changes in the longer term?
Following our recent trip to Japan, we believe that we can expect an expansion of the BoJ’s QE and some form of supplementary budget before the year end. Both actions will probably be limited in terms of their scale and…
Global Recession?
If one were to ‘arrive from Mars’ and consider a global economy in which world trade prices were deflating, savings rates were rising, investment rates were falling while government fiscal positions were stable or improving, and monetary conditions were tightening…
NZ: Problems at the Diary
New Zealand’s economy is slowing, quite sharply, as a number of its former stimuli fade. Admittedly, the available data hasn’t been that weak thus far and consequently the RBNZ has continued cautiously with its easing of policy. We suspect that…
Australia: recession-bound
Australia’s economy has weakened significantly as the non-commodity sectors have been unable to fill the void left by the now defunct commodity boom. Certainly, the trend within the economy seems to remain towards weaker growth; the strength in the property…
The Consequences of Greece
It seems that the more important casualties of the Greek situation will be the still remarkably opaque transfer mechanisms that are needed in order to keep any monetary union together. It should be remembered that even ‘successful’ monetary Unions –…
Italy’s revival
Lower oil prices and an improvement in the auto sector have led to a small rebound in the Italian economy. There are concerns that as the boost in the economy from the oil industry fades, so too may much of…
Greece and the ECB
Quite naturally, financial markets are focussed on events in Greece and for us the key question remains whether Greece will or will not default in the coming days on its EUR100.3 billion of debt to the TARGET2 system and its…
US Flow of Funds Data – interesting observations
Despite some glaring data accuracy problems, the latest flow of funds data from the USA provided few surprises but did confirm a number of important hypotheses. Firstly, the US corporate sector is now running a significant cash flow deficit that…