Despite what you may have read elsewhere, the probability of a fed funds rate cut has increased significantly over the last few weeks.
Revaluation and China’s Multilateral Trade Balance: First Estimates
Yin-Wong Cheung, Eiji Fujii and I have just completed a paper entitled China’s Current Account and Exchange Rate” for a conference on China’s Growing Role in World Trade. This paper follows up on some of the issues I laid out in these posts: [1], [2], [3], and [4].
Weak employment reports
Wall Street took this as a weak jobs report, and it may be worse than people think.
July auto sales
This is not just another bad sales month.
Costing the Surge, and More…
Given the statements that the U.S. might be “surging the surge”, expect an incremental $40 billion to be expended over the next two years.
US Economic Growth: Retrospect and Prospect
Some interesting tidbits can be gleaned from the BEA’s recent release. First, despite the acceleration in growth in 2007Q2, the level of output in 2007Q2 is less than what we thought — as of 28 June — it was in 2007Q1. Second, q/q consumption growth now looks weaker than it did before. Third, while net exports provided a big boost to GDP growth, a large chunk of that effect is attributable to import compression, rather than export acceleration. How one views the durability of the net export effect depends in large part upon how one views the sources of import and export trends.
Recession Indicators: Where Do They Stand?
Recession probability index rises to 26.2%
Definitely some things to be encouraged about by the latest GDP report, but the overall impression of economic weakness remains.
Ouch
No, this was not a good housing report.
Will Dollar Depreciation Prevent A Recession?
As worries from ever expanding — but always containable — housing and mortgage market collapse mount (see this Reuters article), some analysts believe that the external accounts will save the day. From Bloomberg (July 23):