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The Chinese Economy is On a Slowing Boat
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Opinions and views from expert CFOZone members.

Tag >> economy
Dec 18
2009

Recovery, what recovery?

Posted by Ron F in recoveryrecessionjoblessnessgrowtheconomydata

Ron F

I've been waiting for someone to address the use of GDP to measure the economy in this fashion. It goes a long way to show why so much of the discussion of whether we're in a recession or not is completely and utterly beside the point.

As Richard Posner points out here, by the definition of a recession as it currently used, the Great Depression ended and began more than once, which of course is absurd on any terms other than statistical.

Dec 18
2009

China and the WTO, revisited

Posted by Ron F in Obama AdministrationeconomydebtChinacapital expenditures

Ron F

I have to admit the piece I posted Tuesday on China and the World Trade Organization  based on Harvard professor Dani Rodrik's column for Project Syndicate left me a bit confused. To wit: How would China subsidizing its industrial growth instead of pegging its currency to the dollar do anything to change its trade imbalance with the US?

Rodrik didn't spell that out in the piece. But he does in a fuller explanation of his ideas in another piece posted on voxeu.org today. And it turns out the answer is pretty obvious. He's talking about policies that ultimately boost domestic demand for more profitable products. What threw me is that those types of subsidies are also considered taboo by the WTO, so I naturally assumed he was talking about exports. But it turns out that's not what Rodrik was talking about at all.

Dec 17
2009

Good news, says Greenspan. The market is going to rescue us.

Posted by annearf in stock marketstimuluseconomy

annearf

Don't stop believin'.

Shouldn't that be  Alan Greenspan's theme song?  Or, at least, that's what recent comments by the former Federal Reserve chief/economic god suggest.

Dec 15
2009

Wall Street to Obama: We don't want a strong recovery

Posted by Ron F in recoveryrecessionObama Administrationjobseconomybubbles

Ron F

This is the second time in the past two weeks that I've noticed a disconnect between the stock market and the economy.

That is, investors seem to favor a weak recovery. In fact, the market sank after the November unemployment report that was better than expected, when only 11,000 jobs were lost instead of the 125,000 that most economists forecast. Reason: A rebound in the job market would lead to higher wages, and with them would come higher inflation.

Dec 14
2009

Crisis exposes idea of post-industrial society as "a fairy tale," says critic

Posted by Ron F in recoveryrecessionoffshorejoblessnesseconomy

Ron F

Anyone impressed by the uptick in retail sales and the small decline in jobless claims last week ought to check out this article in the January issue of Harper's Magazine.

Since the article is behind a paywall, I'll summarize it here. The piece by Alan Tonelson, a research fellow at the US Business and Industry Council, offers a particularly stark picture of what's needed for a sustainable recovery by the US economy.

Dec 11
2009

Vampire squid guy takes on Obama

Posted by Ron F in RegulationreformrecoveryrecessionObama AdministrationjoblessnessGoldman Sachseconomy

Ron F

The writer who brought us the image of Goldman Sachs as a giant vampire squid is at it again, this time with a verbal takedown of the Obama Administration's economic team.

Good for him. And even if you're willing to give folks like Tim Geithner and Larry Summers the benefit of the doubt, as I once was, their arguments no longer make much sense even on their own terms, as Brad Delong pointed out on Thursday.

Dec 11
2009

Plug the deficit? Then get real about health-care costs

Posted by Ron F in recoveryrecessionObama Administrationjobshealth insurancehealth carefinancial crisiseconomyBanksbailout

Ron F

Opponents of the public option and other government-based efforts to bring down health-care costs pay lip service to the federal budget deficit, as well they must.

But with "entitlements reform" now making its way onto the Beltway agenda, it's time to get serious about this issue.

Dec 11
2009

Will the recession permanently change American's attitudes towards spending?

Posted by annearf in savingeconomyconsumer spending

annearf

Looking for a silver lining in the financial crisis?

There may be one in new attitudes among Americans about spending, saving, and the need to become more informed about financial topics.  That's the implication of a new study from Fidelity about finance-related  New Year's resolutions.

Dec 08
2009

The job picture remains far from bright

Posted by Ron F in recoveryrecessionjoblessnessemploymenteconomy

Ron F

Floyd Norris' column on Saturday (sorry, it's behind the pay wall) made me wonder whether we were being too pessimistic last Friday about the unemployment picture. Norris convincingly argued that one indicator--the Institute of Supply Management's finding that more companies said they plan to hire rather than lay off employees for the third consecutive month--strongly suggested the drop in the rate in November from 10.2 percent the month before was indeed a signal that the worst was over.

But I still couldn't get past other data showing the recent downturn to be so much deeper than other post-war recessions. Surely the depth of the recession had some relevance to the discussion, but what was it exactly?

Dec 07
2009

Why China is headed for a fall

Posted by Ron F in recoveryrecessionemerging marketseconomydemandChina

Ron F

The basis for bullish assumptions about global economic recovery rests heavily on continued growth in China. And while the optimists concede that China is experiencing an investment bubble, they argue that the Chinese consumer will save the day. How? GDP growth will be sustained by a tremendous boom in consumption by the notoriously parsimonious populace, and this "rebalancing" will occur without interruption.

But a closer look at what's necessary for that scenario to work out suggests it is not feasible, or at least historically unprecedented.

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