Stocks, bonds, gold and oil have staged a rare concurrent rally
The New York Stock Exchange. The S&P 500 has risen 20% this year, even as Treasurys have rallied.
Stocks and bonds have staged a rare simultaneous ascent, logging the best performance in a quarter-century.
The S&P 500 has advanced 20% in 2019, while Treasurys have rallied. The last time the benchmark stock index rose more than 10% while the Treasury yield fell more than a percentage point in the first three quarters of the year was in 1995, according to Dow Jones Market Data.
That trend continued as the fourth quarter kicked off. Government bonds and gold notched gains last week as the S&P 500 hovered within 1.3% of its record reached in July and clinched its second straight week of gains. Den Rest des Beitrags lesen »
Kevin Rudd, a former prime minister of Australia, is President of the Asia Society Policy Institute in New York.
Driven by domestic nationalist forces and the need to save face, US President Donald Trump and his Chinese counterpart, Xi Jinping, have continued to escalate the bilateral trade war, despite their shared interest in resolving it before the end of the year. To make a deal, both sides need to start taking substantive steps immediately.
NEW YORK – Now that the celebrations marking the 70th anniversary of the founding of the People’s Republic of China are over, it is time to direct attention back to the Sino-American trade war. That conflict may well be about to enter its endgame. Indeed, the next round of negotiations could be the last real chance to find a way through the trade, technology, and wider economic imbroglio that has been engulfing both countries.
Failing that, the world should start preparing for its rockiest economic ride since the 2008 global financial crisis.Den Rest des Beitrags lesen »
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.
Business cycles can end with a rolling readjustment in which asset values are marked back down to reflect underlying fundamentals, or they can end in depression and mass unemployment.There is never any good reason why the second option should prevail.
BERKELEY – I recently received an email from my friend Mark Thoma of the University of Oregon, asking if I had noticed an increase in commentaries suggesting that a recession would be a good and healthy purge for the economy(or something along those lines). In fact, I, too, have noticed more commentators expressing the view that “recessions, painful as they are, are a necessary growth input.” I am rather surprised by it.
Jean Pisani-Ferry, a senior fellow at Bruegel, a Brussels-based think tank, holds the Tommaso Padoa-Schioppa chair at the European University Institute, and is a visiting fellow at the Peterson Institute in Washington, DC.
A decade after the Great Recession, Europe’s economy is still convalescing, and another period of prolonged hardship would cause serious, potentially dangerous economic and political damage. With monetary and fiscal policy unlikely to provide enough stimulus, policymakers should explore alternative options.
WASHINGTON, DC – Despite confident official pronouncements, the deteriorating state of the global economy is high on the international policy agenda. The OECD recently revised down its forecast to 1.5% growth in the advanced G20 economies in 2020, compared to almost 2.5% in 2017. And its chief economist, Laurence Boone, warned of the risk of further deterioration – a coded way of indicating a growing threat of recession.
Date: 25-09-2019
Source: The Guardian by Nouriel Roubini
Trump’s rows with China and Iran, Brexit and Argentina’s populism put the world on a knife edge
Shipping containers from China and other Asian countries
In the classic game of chicken, two drivers race directly toward each other, and the first to swerve is the loser. If neither swerves, both will probably die. In the past, such scenarios have been studied to assess the risks posed by great-power rivalries. In the case of the Cuban missile crisis, for example, Soviet and American leaders were confronted with the choice of losing face or risking a catastrophic collision. The question, always, is whether a compromise can be found that spares both parties their lives and their credibility.
There are now several geo-economic games of chickenplaying out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis. The first and most important contest is between the US and China over trade and technology. The second is the brewing dispute between the US and Iran. In Europe, there is the escalating brinkmanship between Boris Johnson and the EU over Brexit. Finally, there is Argentina, which could end up on a collision course with the International Monetary Fund after the likely victory of the Peronist Alberto Fernández in next month’s presidential election. Den Rest des Beitrags lesen »
Date: 11-09-2019
Source: Foreign Affairs By Jared Bernstein
The Next Downturn Will Be Political—and Tough to Escape
The United States is in its 11th year of uninterrupted economic expansion, unemployment has hit a historic low, and growth, while decelerating, still hums along. Yet anxiety about the next recession seems to mount with each new tariff or tweet that President Donald Trump lobs at China as part of his trade war—and for good reason. The president’s policies are clearly hurting tradeable sectors of the U.S. economy, especially manufacturing, which must contend with the double whammy of U.S. tariffs on imported inputs and Chinese tariffs on exports of finished goods. U.S. producers of vehicles, electronics, and agricultural goods, among other things, are all scrambling to disentangle their supply chains from China. But doing so is costly and complicated, and many of them are suffering as a result.
The trade war may not be enough to tip an otherwise healthy U.S. economy into recession. But if it does, the United States will be in a uniquely bad position to fight its way out again. The country is almost certain to enter the next downturn with historically high levels of public debt. That is worrying because governments in this position have historically failed to apply enough fiscal stimulus—that is, boost the economy through increased government spending as well as indirect measures like tax cuts—to counteract recessions. At the same time, short-term U.S. interest rates are already relatively low, meaning there will be limited room to cut them—the other main tool that governments have to battle downturns.Den Rest des Beitrags lesen »
So far, with his flashy lifestyle, the US president has been a resounding inspiration to many consumers and investors. But his personal narrative is unlikely to survive an economic downturn, because people pull back during such periods and reassess their views and the stories they find believable.
NEW HAVEN – US President Donald Trump concluded his remarks at the recent G7 summit by inviting the assembled leaders to hold next year’s meeting at his Doral country club near Miami, describing a fantasy-like world of “magnificent buildings” whose “ballrooms are among the biggest in Florida and the best.” It was yet another instance of Trump’s public narrative, which has been on a rising growth path for nearly a half-century.
Date: 31-08-2019
Source: The Wall Street Journal By Gerard Baker
The country’s rich history contrasts with today’s economic and political turmoil.
Vineyards near Montalcino, Italy.
There was a joke that was popular when I was in college. “I had a great summer job this year,” it went. “What was it?” went the reply. “I was prime minister of Italy.”
I didn’t quite get the job this summer, though I did something even better—spending several weeks in the Tuscan countryside, resting, reading and writing. While I was there, on cue, the Italian government collapsed, and this timely juxtaposition of inner serenity and public turmoil prompted a few thoughts about our larger dispensation.
It’s hard to imagine a better place to ponder the arc of our civilization’s history than the rich, hilly lands from Tuscany down to Rome. It’s partly the views—across vine-covered slopes and cypress-studded hilltops to gorgeous honeyed-stone villages—and the long lunches of pasta and red wine that induce a contemplative mood under the relentless sun.
But it’s also the ubiquitous reminders of our historical roots in this fresco landscape. You can make a solid case that the small swath of hilly terrain between Florence and Rome has had more impact on our civilization than any other territory anywhere on Earth. Den Rest des Beitrags lesen »
Date: 30-08-2019
Source: The Economist: Charlemagne
Seen from an airliner, Europe’s problems look smaller
Even in europe, a continent of welfare states famed for their gloriously long holidays, the summer must eventually end. This week, as they trickle back from Mediterranean beaches and Alpine campgrounds, Europeans are preparing for a fateful autumn. The risk of a recession looms. Eurosceptic populists are likely to win elections in Poland, and perhaps in Italy. Britain is heading for a hard or no-deal Brexit. From trade wars to migrant crises, the outside world looks threatening. Still, gazing out of their aeroplane windows, returning holidaymakers may notice some of the things that hold their curious little continent together.
For one thing, they are physically connected. In Africa or SouthEast Asia, infrastructure often peters out at borders. Yet in Europe motorways, railway lines and waterways criss-cross the continent. Peering down into deep Balkan valleys, one can see how absurd local ethnic rivalries and hatreds are; they carve up a continuous landscape of rocky coastlines and dusty roads that can obviously succeed only as an integrated region. Den Rest des Beitrags lesen »
Im dritten Quartal droht ein weiterer Rückgang des BIP. Dennoch dürfte Deutschland einen Budgetüberschuss von 45 Milliarden Euro verbuchen
Die sonst übliche Belebung der Baubranche im Frühjahr blieb heuer aus, weil wegen des milden Winters viele Bauleistungen schon im ersten Quartal erbracht wurden.
Wiesbaden – In der größten Volkswirtschaft Europas geht es mit der Wirtschaft weiter bergab.Handelskonflikte und eine schwächere Weltkonjunktur haben die exportabhängige deutsche Wirtschaft im zweiten Quartal schrumpfen lassen. Das Bruttoinlandsprodukt (BIP) fiel von April bis Juni um 0,1 Prozent zum Vorquartal, wie das Statistische Bundesamt am Dienstag eine frühere Schätzung bestätigte. Zum Jahresauftakt war Europas größte Volkswirtschaft noch um kräftige 0,4 Prozent gewachsen.
Schrumpft die Wirtschaft im laufenden Sommerquartal erneut, sprechen Experten von einer Rezession. Die jüngsten Konjunktursignale stimmen pessimistisch: Der Ifo-Geschäftsklimaindex fiel im August auf den schlechtesten Wert seit fast sieben Jahren, weil die Schwäche der Industrie zunehmend auf die Dienstleister überzugreifen droht.
Gebremster Außenhandel und investierende Unternehmen
NEW YORK – Now that the celebrations marking the 70th anniversary of the founding of the People’s Republic of China are over, it is time to direct attention back to the Sino-American trade war. That conflict may well be about to enter its endgame. Indeed, the next round of negotiations could be the last real chance to find a way through the trade, technology, and wider economic imbroglio that has been engulfing both countries.