Why China Can’t Afford a Trade War
Beijing is more economically vulnerable than it appears.
Beijing is more economically vulnerable than it appears.
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 Krugman and Keynes Are Wrong about Debt – Bart Remes, FEE How The Bond Market Reliably Signals Recessions quoting John H. Cochrane via Forbes The bond market is about double the size of the stock market, with a far greater trading volume, and can have some predictive power for stocks. This is because government bonds are typically in tune with the broader economy and interest rates. Currently, the bond market is sending some negative signals about the prospects for the economy and the markets, but is this just noise or something you should pay attention to? Crises Past And Future Occupy World's Greatest Economic Minds quoting Raghuram Rajan via Bloomberg The talk was all about crises -- both past and future -- as some of the world’s leading economists gathered at a conference over the weekend. While former Federal Reserve chair Ben S. Bernanke and University of California at Berkeley Professor Barry Eichengreen used presentations at a Nobel Symposium in Stockholm to address the implications and effects of past financial turbulence, others cast a wary eye on the next episode. Trump policies boost the dollar, thwart his trade goals
Desmond Lachman | The Hill In its effort to reduce the US trade deficit, the last thing the Trump administration needs is a strengthening US dollar. Yet that is what is likely to happen over the next year as a result of the administration’s budget policies. This will make any progress on reducing the trade deficit unlikely, since a strong dollar would weaken America's competitive position in international markets.   Managing the Risks of a Rising Dollar
Mohamed El-Erian calls for a more effective policy response to the US currency's sudden and sharp appreciation.  Michael Spence On Tech And The Asian Growth Model
interview with Michael Spence via Bloomberg Hoover Institution fellow Michael Spence discusses the Asian growth model and the impact of technology. Michael Spence On U.S. Yields Rising, Global Economic Data interview with Michael Spence via Bloomberg Hoover Institution fellow Michael Spence discusses why US treasury yields are rising as well as systemic risks in global economic data. Models Don't Work In Crisis, Says Michael Spence interview with Michael Spence via Bloomberg Hoover Institution fellow Michael Spence says models don’t work in a crisis, but experience does.  John Taylor Urges IMF, China To Abandon Capital Controls
interview with John B. Taylor via Bloomberg Hoover Institution fellow John Taylor says he disagrees with the International Monetary Fund’s emphasis on capital controls as a policy tool, and China’s steps to regularly impose them when needed, saying they should be replaced by open markets and free movement of capital around the world.  Argentina put the financial cart before the horse
Desmond Lachman | The Hill The Argentine peso’s free fall is a painful economic lesson to Argentine President Mauricio Macri. In the same way that it is not a good idea to put the cart before the horse, it was not a good idea for Macri to lift his country’s capital controls before stabilizing its imbalanced economy.
Iranian currency plunges to record low amid protests
The black market rate for Iran’s currency hit a record low of 90,000 rials against the US dollar on Sunday, before recovering to around 81,000 today. The immediate cause of the sudden plunge remains unclear, but the currency has been under rising pressure this year, especially following the United States’ withdrawal from the nuclear deal. The instability in exchange rates on the black market triggered protests among shopkeepers in Tehran's grand bazaar. Read More
In Tehran, Economic Protests Flare As Iran's Currency Plunges
quoting Abbas Milani via NPR Iran's capital has been racked by protests this week over a plunge in the value of the country's currency, the rial. Crowds at one point shut down Tehran's sprawling Grand Bazaar, an economic center and a place where the 1979 revolution gained footing.
In Tehran, Economic Protests Flare As Iran's Currency Plunges
quoting Abbas Milani via WNCW Iran's capital has been racked by protests this week over a plunge in the value of the country's currency, the rial. Crowds at one point shut down Tehran's sprawling Grand Bazaar, an economic center and a place where the 1979 revolution gained footing.
Time to be in cash
BY DAVID P. GOLDMAN While trade tensions threaten to break up global supply chains, heavily-indebted emerging markets are hanging in the balance – this isn’t a time to buy anything
In stark contrast to US, China stakes clear, unified position on trade talks
BY CHRISTOPHER SCOTT ‘US goals in the trade talks are incomprehensible… China will survive these attacks’
China’s “debtbook diplomacy” uses strategic debts to gain political leverage with economically vulnerable countries across the Asia-Pacific region, the US state department has been warned in an independent report. - The Guardian
 As dollar rises, Turkey's tourism income suffers Turkey's weak currency means more tourists can afford to travel there, but it doesn’t mean more revenue for the country. Turkey death watch BY ASIA TIMES STAFF Despite another expected rate hike on Thursday, the lira is struggling to reverse its decline, and president Erdogan is ill-equipped to avert disaster Turkey’s lira tumbles as inflation nears record high Investors are dumping the Turkish currency amid worries that a pre-election spending spree and pressure on the Central Bank to keep interest rates low could see the lira continue to spiral. Erdogan convenes emergency meeting as Turkish lira plunges Turkish President Recep Tayyip Erdogan convened senior members of the government’s economic administration on Wednesday for an urgent meeting to discuss the plunging value of the Turkish lira. The Turkish currency plunged to record lows on Wednesday, dropping drastically against the US dollar. Before the meeting, presidential spokesman Ibrahim Kalin said, “Turkey’s fiscal discipline will be preserved under the leadership of our president.” In a statement following the meeting, Erdogan’s office said “Measures will be taken to more effectively combat inflation and reduce the pressure on interest and exchange rates.” Read More Who is really driving the slump of the Turkish lira? Though the flight of foreign investors is often cited as the main factor behind the slump of the Turkish lira, official data indicate that growing distrust in the currency stems largely from domestic actors. Buy ruble, sell Turkish lira BY DAVID P. GOLDMAN Markets have vastly overreacted to Russia’s problems (sanctions), but Turkey is a different story As lira continues fall, Turkey finds itself in a trap BY DAVID P. GOLDMAN With a majority of corporate debt denominated in foreign currencies, letting the lira find its own value poses systemic risks Are debt crises in Argentina and Turkey a global warning sign? (The Guardian) Are brewing exchange rate and debt crises in Argentina and Turkey localised events without broader implications? Or are they early warning signs of deeper fragilities in bloated global debt markets that are being exposed as the US Federal Reserve continues to normalise interest rates? Turkey’s economic crisis has just begun
(Asia Times) What happens next probably is what happened to Greece during its financial collapse — meaning Turkey’s economy could shrink by 10 to 20 percent. There are a lot of political scores to settle in Turkey, and an economic crisis would make Erdogan most vulnerable. |
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