The alphabet soup of possible shapes for this recession is now clarifying somewhat. The recent strength in several US and global indicators, before fiscal stimulus has had time to kick in, indicates that the panic among governments after September’s financial crisis was overblown. Indeed the strength in economic indicators, combined with the global stock market […]

Relatively little rested economically on the result of last November’s US Presidential election. John McCain was politically well towards the big-government wing of the Republican party, while President Barack Obama, after an initial burst of public spending will be forced by economic reality to retrench during his remaining years in office. There is however an […]

With increasing frequency over the last few weeks, economic statistics have emerged suggesting that the first shoots of economic spring are emerging and that the bottom of the US and global recession is only just round the corner. Higher vehicle sales and factory orders, the Institute of Supply Management monthly index and slightly higher personal […]

Zhou Xiaochuan, Governor of the People’s Bank of China said this week that the International Monetary Fund’s Special Drawing Right should replace the dollar as the world’s main currency. The political reasons for his proposal are clear, its merits rather less so. Could the world economy work better with a global central bank, whether in […]

The Federal Open Market Committee meeting on March 17-18, if it achieved nothing else, made one thing abundantly clear: even after all the damage that has been caused to the global economy, the Fed neither accepts responsibility for its misdeeds, nor has any intention of modifying its errant behavior. A private sector institution that behaved […]

US treasury secretary Tim Geithner called last week for the lending power of the International Monetary Fund to be trebled. For those of us who were hoping that institution would expire of long-term neglect, this was a disquieting development. Can it be that the Bretton Woods institutions, which have played a largely pointless and occasionally […]

The political response to this economic downturn has differed from previous responses to downturns in a number of ways, the most economically significant of which lies in the extent to which failure has been subsidized. Counterproductive economic pathologies have been encouraged, financial structures that endangered global prosperity have been bailed out and trillions of dollars […]

Wall Street over the last generation has been a prolific generator of casinos, in which the dealing community can make a very nice living indeed by providing investment and “hedging” services to outside investors. Of all these casinos, the credit default swaps market has been among the most lucrative. As the credit crisis has unfolded, […]

The $787 billion stimulus bill has been signed by President Obama, and the $275 billion help for homeowners has been announced and generally well received, but still the stock markets keep dropping. Worldwide, daily new plans for stimulus and rescue are met with daily declines in stock prices and gloomy economic figures. There’s a reason […]

As the Obama stimulus plan passes and Treasury Secretary Tim Geithner unveils the outline of a $1.5 trillion bank rescue package, the die has been definitively cast in favor of the Keynesian stimulus approach to the ongoing unpleasantness. That has been conventional wisdom since the Great Depression, but it’s still worth looking at what might […]