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Posts Tagged ‘Kaletsky’

What Could Spoil 2020?

Posted by hkarner - 17. Januar 2020

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

The most probable scenario for the global economy and financial markets this year is fairly obvious: continued GDP growth, rock-bottom interest rates, and rising equity prices. It’s more useful to identify which unlikely events would alter this likely benign scenario – and consider how unlikely they really are.

LONDON – The traditional January game of economic forecasting for the year ahead hardly seems worth playing when the predictions have been the same for a decade. In 2020, it is even more likely than it has been every year since the financial crisis that the global economy will continue growing, interest rates will remain at rock-bottom levels, and stock markets will keep rising. 

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King Boris’s First Test

Posted by hkarner - 25. Dezember 2019

With the United Kingdom’s withdrawal from the European Union now set to take effect on January 31, 2020, the most important challenge facing UK Prime Minister Boris Johnson is negotiating his country’s new relationship with the bloc. He has every incentive to keep that process as non-controversial as possible.

LONDON – Wars end when the belligerents give up fighting. The surest way for this to happen, and sometimes the least destructive, is through a decisive battle that leads to unconditional surrender. Boris Johnson’s overwhelming victory in the United Kingdom’s general election this month was such a battle. With the opposition parties completely routed, Johnson now enjoys the unlimited power bestowed on British prime ministers with large majorities. Britain’s unwritten constitution dispenses with the checks and balances in other national constitutions, allowing an absolute sovereignty to the majority in Parliament often described as elective dictatorship.” 

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The Monetarist Era is Over

Posted by hkarner - 1. November 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

Central bankers have been the first to recognize that the effectiveness of monetary policy in managing demand and stabilizing economic cycles has reached its limits. The problem is that many politicians and academic economists remain in denial.

LONDON – A mood of foreboding dominated this month’s annual meetings of the International Monetary Fund and World Bank in Washington, DC. But fear of a global recession was not the real cause. Although the latest update of the IMF’s World Economic Outlook showed economic activity slowing this year to its weakest level since 2009, the projected global growth rate of 3% is still far above levels associated with past recessions and would be consistent with decent economic conditions in most parts of the world – not a bad outcome for the 11th year of a sustained global expansion. And for next year, the IMF predicts that growth will accelerate to 3.4%, very close to the 3.6% estimate of the world economy’s long-run sustainable trend.

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Are Europe’s Economic Prospects Brighter Than They Appear? Oct 1, 2019 Anatole Kaletsky

Posted by hkarner - 2. Oktober 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

Despite all the lurid headlines about the trade war causing a recession in the United States or some kind of collapse in China and its Asian neighbors, recent economic data reveal a very different picture: the main victim has been Europe. But, fortunately for the European economy, overdependence on foreign trade is not the whole story.

LONDON – In the year since US President Donald Trump escalated America’s trade war with China, policymakers and financial markets have been obsessed with the dangers to both countries’ economies. Yet the real threat the conflict poses to the global economy lies elsewhere. 

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Boris’s Brexit

Posted by hkarner - 29. Juli 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

Political betting markets now put the chance of a no-deal Brexit at roughly one-third. But, regardless of the reckless promises to Conservative Europhobes that made Boris Johnson prime minister, an orderly, negotiated Brexit will be the favored option for a political libertine whose only consistent principle has been inconsistency.

LONDON – Now that Boris Johnson has achieved his lifetime ambition to become the United Kingdom’s prime minister, the tragicomedy of Brexit is approaching its climax. While the rest of the European Union has viewed this with barely disguised horror, there is good news and bad news in Johnson’s apotheosis. 

The bad news is that the “no-deal” withdrawal from the European Union that Johnson advocated to win the leadership of the Europhobic Conservative Party could cause a sudden stop in economic activity comparable to the disaster that followed the failure of Lehman Brothers in 2008. Although this business breakdown might initially affect only trade-related businesses in Britain, and produce some kind of UK-EU compromise within a few weeks or months, we learned in the 2008 financial crisis that even a brief interruption of normal commercial relations in one part of the economy can reverberate for many years. The good news is that Johnson is a far cleverer and more adroit politician than his predecessor, Theresa May. Den Rest des Beitrags lesen »

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Expansions Don’t Die of Old Age

Posted by hkarner - 24. Juni 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

Many economists have become convinced that a recession in the United States is now overdue, if not immediately then surely before the 2020 presidential election. But US recessions since the end of World War II have generally resulted from three causes, none of which is currently present.

LONDON – The US economy has entered its 11th year of uninterrupted expansion, breaking the previous record for the longest period of growth in American history without a recession. But far from celebrating, many economists conclude from this unprecedented performance that a recession is now overdue, if not immediately then surely before the 2020 presidential election. Fortunately for the US economy, but sadly for President Donald Trump’s opponents, the idea that economic expansions have some kind of natural lifespan and then die of old age has neither empirical nor theoretical support.

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Brexit Fever is Breaking

Posted by hkarner - 31. März 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

A no-deal disaster is still theoretically possible when the next Brexit deadline arrives on April 12. But a much longer extension is almost certain, now that the principle of a potentially endless negotiation has prevailed.

LONDON – By removing the for completing negotiations on the United Kingdom’s withdrawal from the European Union, the EU has avoided the disaster of a 2008-style sudden stop in business with its second-largest trading partner. This decision dramatically improves the economic and political outlook for the UK and all of Europe.

For Britain, the prospects are suddenly much clearer and better than at any time since June 2016. While the likelihood that Prime Minister Theresa May will soon be ousted could create the impression of a constitutional crisis, the reality is that political conditions are sure to stabilize once the period for renegotiating the UK-EU relationship is extended again from the new, very soft, April 12 deadline until the end of the year or beyond. How this extension comes about – whether because of a new prime minister or a general election or a second referendum or a vote in Parliament to erase all of May’s “red lines” which prevented her negotiating a Norwegian-style associate membership of the EU – is impossible to predict. It is also not very important. Den Rest des Beitrags lesen »

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How EU Leaders Can Prevent a No-Deal Brexit

Posted by hkarner - 6. Februar 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

British Prime Minister Theresa May’s strategy of threatening a no-deal Brexit requires a hard deadline that forces her opponents to capitulate. Without that, “running down the clock” becomes “kicking the can down the road,” which more accurately reflects May’s paradoxical combination of robotic inflexibility and exasperating indecisiveness.

LONDON – Has British Prime Minister Theresa May outmaneuvered all her opponents? By defeating Parliament’s effort to rule out a disorderly “no-deal” rupture between the European Union and its second-largest trading partner, May has redoubled pressure on EU leaders to accept her demands by the Brexit deadline of March 29.

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The World Economy Goes Hollywood

Posted by hkarner - 21. Januar 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

In a world where “nobody knows anything,” investors may be no better than film-studio moguls at predicting the future. If so, then markets, instead of being predictive, become increasingly reactive, simply extrapolating recent events.

LONDON – If there is one useful conclusion that economists and investors can draw from the crazy year that has just ended – indeed, from the whole crazy decade since the Global Financial Crisis of 2008 – it is this: As they say in Hollywood, “Nobody knows anything.” In the film industry, the richest and most experienced studios and producers spend vast amounts of time and money on audience research, but still have no idea if their latest creations will turn out to be hits or flops. So why be surprised if the same is true of financial markets – or, for that matter, of commodity prices, policymaking, and corporate performance?

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Is Canceling Brexit Now Inevitable?

Posted by hkarner - 28. Dezember 2018

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

As matters stand today, a new British referendum on leaving the European Union would produce a clear majority for remaining a member, regardless of how the votes were counted or the questions were asked. And with the only two Brexit options set to be rejected next month, the questions are increasingly likely to be asked.

LONDON – In times of political turmoil, events can move from impossible to inevitable without even passing through improbable. In early 2016, the idea of Britain leaving the European Union seemed almost as absurd as the next American president being the six-time bankrupt and serial sex pest Donald Trump. A few months later, Brexit and the Trump presidency were universally acknowledged as the inevitable consequence of an anti-elitist, anti-globalization backlash that was predictable decades ago.

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