Interest rates set to rise as economic tectonic plates shift – is this good or bad news?
15 Dec 2010 [0 Comments | 760 views]
A new report from McKinsey Global has just about the most far reaching predictions we have seen in years. The report forecasts higher interest rates across the world. That’s real interest rates, by the way. If the predictions are right, and actually, we suspect they are, this will of course be bad, bad news for [...]
Indebted Japan slashes corporate tax, but what we need is a global corporate tax
14 Dec 2010 [0 Comments | 308 views]
While we fret over government debt approaching 100 per cent of GDP in various countries across Europe, don’t forget Japan. Here is a country whose debts as a percentage of GDP are simply huge. And yet how does Japan respond to its own crisis – why, it cuts taxes. Take its latest move, announced this [...]
It’s time for Ireland to play hardball with EU and IMF
13 Dec 2010 [0 Comments | 434 views]
Later this week Ireland’s parliament will be voting again. The austerity budget has already gone through; now it’s time to agree to the EU/IMF loan. It will be a tight call, but the Irish government will probably win the day. Alas, such a positive vote will be bad news for Ireland, and it may be [...]
Euro crisis: the lesser of two evils
9 Dec 2010 [0 Comments | 510 views]
The euro’s defenders have struck. This week’s Economist devoted its lead article to explaining why a collapse in the euro would be a disaster. Across Europe, politicians have rallied to the euro’s defence. Some time ago, Angela Merkel said that if the “Euro fails, Europe fails”. And that seems to be the flavour of the [...]
Euro bonds idea is like an ostrich that buries its head even deeper into the sand
6 Dec 2010 [0 Comments | 334 views]
Imagine you are an ostrich with your head buried in the sand and a predator is inching up on you. What do you do? It seems there are two options: one is to race away like crazy. The other is to bury your head that much deeper. The latest idea from the EU would appear [...]
India’s growth in GDP closes in on China
30 Nov 2010 [0 Comments | 509 views]
The latest data on Indian GDP were out this morning: and it appears the economy of the subcontinent is closing in on China as the fastest growing large economy in the world. According to data out this morning, India’s GDP expanded by 8.9 per cent year on year in the third quarter. By contrast, China [...]
Is Belgium like Greece, or Germany?
28 Nov 2010 [0 Comments | 603 views]
The problem in Belgium is several-fold. Not least the fact that the country has pulled off the impressive trick of simultaneously not having a government, but having massive levels of government debt. In other words, the government it does not have is in big trouble. But before you start rattling off jokes about famous people [...]
Portugal and Ireland – debts, wages and house prices: how do they really stand?
28 Nov 2010 [4 Comments | 1,038 views]
The problem with the bailout of Ireland is that the EU and the IMF are effectively saying to the markets – You are wrong. The markets have concluded that Ireland is a risky bet, and will only lend to the government at rates that would make the cost of servicing debt unbearable. So the EU [...]
Merkel irritates markets with some home truths
25 Nov 2010 [1 Comment | 2,003 views]
She only went along and did it again. Yesterday, and not for the first time, German Chancellor Angela Merkel suggested bondholders should be willing to do their bit and contribute to the great EU bailout by cutting their losses. And yields on bonds, or at least yields on bonds pertaining to certain countries, soared. For [...]
The Eurozone’s three Ds: default, default, and default
25 Nov 2010 [1 Comment | 595 views]
We have three observations to make on the latest shenanigans to hit the Eurozone. Firstly, default of some sort seems inevitable. Secondly, it seems that in a funny kind of way, Angela Merkel and arch-Keynesian Paul Krugman agree. Both seem to think that markets need to be encouraged to throw their money at business, and [...]
