Economics

Woodstock 40th a grim anniversary for music business

13 Aug 2009

The industry s fiscal circumstances look nothing like they did during the celebrated 1969 festival. The threeday concert was a financial disaster, but a subsequent live album and documentary made it profitable. Rob Cox looks at the economic reversal in today's rock and roll.

Eurozone enters fragile stabilisation

13 Aug 2009

Recession in Germany and France is over, after their GDP rose slightly in the last quarter. Past recoveries have been vshaped. But that is not likely this time the pain is too global and the financial dislocations are too severe. A recessionary relapse is a greater risk.

Fed taps brakes – but must be wary of the traffic

12 Aug 2009

The central bank said it will slow its purchase programmes of Treasuries and agency securities and it expects inflation to remain subdued. But it must be uncharacteristically vigilant on developing stock market and commodity bubbles to avoid repeating the errors of 200206.

Crisis has changed remarkably few minds

12 Aug 2009

When the world financial system was close to the edge, many bankers, economists and politicians called for new thinking. But prejudices are proving strong. It s almost back to the precrisis mindset as far as worries, strategies, policies and even bonuses are concerned.

When is it time to give up the hedge fund rat race?

12 Aug 2009

For Tim Barakett at Atticus it s at 44 with $1bn in the bank but near the bottom of his game. That s not ideal, but at least it s honest to hand back money when your heart s not in the job. Others make the mistake of hanging on too long and being forced to give up.

Wicked whispers don’t help Rio Tinto – or China

10 Aug 2009

A spurious editorial on a quasistate website alleged Rio had ripped China off to the tune of $100bn. The aim may be to discredit the AngloAustralian miner. But misinformation and confusion over where the state starts and ends do nothing for China s economic relations overseas.

Optimism over US unemployment drop is premature

7 Aug 2009

The stock market s minirally after the report of a 0.1point drop in July unemployment was misguided. The fall was caused by a decline in the labour force, which is not a sign of revival. The fiscal and monetary mess could lead to a halting recovery with ongoing job losses.

Korea-India trade deal has big long-term potential

6 Aug 2009

The free trade agreement between Korea and India represents only a partial market opening. But it may bring major trade growth between the complementary economies. It shows Korea has options beyond its stalled deal with the US and that India remains open to trade expansion.

Personal view: Baltic economies may bounce quicker than most

5 Aug 2009

Lithuania, Latvia and Estonia have the world s worst recessions, but all three are taking nasty medicine: cutting private and government costs sharply. Martin Hutchinson argues that this avoidance of Keynesian selfindulgence can bring them a quicker recovery.

US economy could languish at bottom of deep hole

31 Jul 2009

The 1% drop in Q2 GDP makes the 3.7% drop in the last six quarters the worst recession since World War II. Government stimulus helped, but personal savings are still depressed and the federal deficit is huge. Correcting those imbalances could make for a very slow recovery.

Savings drive record emerging market bond volume

28 Jul 2009

Firsthalf issuance was the most ever, belying forecasts earlier this year of widespread capital shortages. Chinese and corporate issuers dominated. Companies in countries with big savings pools did the most business showing the advantages of thrift.

US housing rebounds, but won’t lead recovery

27 Jul 2009

New home sales, existing home sales and housing starts all rose in June. But housing starts are still far below previous cyclical lows, and sales levels are boosted by fiscal and monetary subsidies. These seem to have brought a bottom, but won t end housing s bear market.

Asian recovery could be unfettered by bank woes

23 Jul 2009

The ADB expects emerging east Asia to recover quickly in 2010. That sounds reasonable. Trade has bounced and domestic growth remains strong. The region's manufacturingoriented economies with modest budget deficits may now fare better than the centres of financial meltdown.

Turkey’s bluff pays short-term dividends

23 Jul 2009

Many investors were horrified six months ago when Turkey backed away from talks with the IMF. But the country has averted economic disaster without the fund s help. Still, unemployment is high and exports are weak. The economy will stay vulnerable for some time.

BoE faces QE dilemma

23 Jul 2009

One member of the monetary policy committee has been criticised for suggesting the programme of printing new money may be put on hold. That won t help the government sell gilts but that s hardly the BoE s job. As for QE itself, it doesn t seem to be working.

Fed should note signs of nascent inflation

15 Jul 2009

US consumer prices ticked up 0.7% in June, suggesting inflation not deflation is the danger. With negative real interest rates and huge monetary stimulus, the Fed will have to act fast if inflation emerges. Recent data could be blips, but it's safer to see them as warnings.

US payroll data suggest recession is worsening

2 Jul 2009

June s job losses were greater than those of any month of the 200102, 199091 or 198082 recessions. Even discounting possible noise , this shows the recession is not yet bottoming. Stocks, budget estimates and bank stress test assumptions may all have been too optimistic.

Can Iceland be saved?

29 Jun 2009

Personal view: Oil economies have trouble with democracy

15 Jun 2009

In countries like Iran, most of the wealth comes from the governmentcontrolled oil industry. Voters care more about who gets which share of the booty than about the government s economic competence. That favours antimarket populists like Ahmadinejad, Chavez and Putin.

US jobs data suggest Fed should ready the brakes

5 Jun 2009

Job losses in May were sharply lower than in prior months. Meanwhile commodity prices have zoomed up, presaging inflation, and banks look healthier. The rationale for outsized monetary stimulus is wearing thin, and Ben Bernanke needs to prepare to reverse it sooner not later.