I’m still looking for, and still not seeing, the economic recovery that everybody is talking about.
How to lose on a sure-fire bet
There was a wonderful story in today’s WSJ about how some big banks managed to lose some of their hard-earned TARP money.
How Important Is China to World Growth?
This is a tough question to answer. But I can provide an answer of a mechanical sort. Consider how big the Chinese economy is, compared against the US, the Euro area and Japan.
More on disaggregate bank landing
I’d like to mention two more useful analyses of the disaggregated behavior of bank lending over the last year. The first is from James Kwak at the Baseline Scenario, and the second is a new research paper by Silvio Contessi
and Johanna Francis.
DeGlobalization: Transitory or Persistent?
It’s not news that the US current account, trade balance and trade balance ex.-oil are all moving toward zero percentage points of GDP. As I’ve observed before, time will tell how much of this movement is durable (see Bertaut, Kamin and Thomas for skeptical look; see also Cline-Williamson); this in turn depends on whether the adjustment reflects standard macro effects, including a permanent downshift in US consumption growth [0], and how much reflects perhaps transitory effects like a credit crunch in trade financing (as speculated upon here). Here’s the trade balance situation for the US.
Not a robust recovery
Often after a sharp economic downturn we observe an equally dramatic recovery. But nobody can claim to be seeing that so far in the currently available data.
James Pethokoukis: “An improving job market”
Hmm. I’m not sure about this statement.
Relevant and Irrelevant Criticisms of the Stimulus Package
Keith Hennessey critiques the stimulus package. Some points make sense, some points, well, I wonder. For instance, Hennessey argues the stimulus is not timely. As I’ve noted before, it’s not timely only if you think this will be a relatively short recession, characterized by a rapidly dissipating negative output gap. [0] [1] [2].
Output, Employment and Industrial Production in the “1980-82 Recession”
In today’s NYT, Casey Mulligan presents an interesting picture of GDP during the “1980-82 recession” — the conjoining of the two NBER defined recessions in 1980 and 1981-82. Based on the comparison with the current recession, he concludes:
While the job losses, foreclosures, stock declines and other casualties of the current recession have been very painful, substantially more bad economic news is needed to make this recession worse than the downturns of 1980-’82, at least in G.D.P. terms.
More on bank lending data
Further evidence on the decline in bank lending.