From Europe’s Stormy Outlook:
Stormy conditions prevail across Europe’s economies, blackening the outlook after the arrival of a full-blown banking sector crisis this month sent confidence plummeting and threatened widespread-economic damage.
Jean-Claude Trichet, European Central Bank president, warned late on Sunday on French television of a “strong slowdown”.
The recent turmoil has hardened expectations that 2009 will see little, if any, growth across much of the Continent.
…
If automakers are lining up at the trough, why not Big Agra?
Updates on some of the series we regularly follow, and they’re not good.
…or: “Yikes!”
There have been plenty of accounts that have noted the growing anxiety over economic growth over the short to medium term. However, this forecast from Deutsche Bank, released last night, is quite sobering, especially when compared to forecasts released just two weeks ago.
That was the topic of a talk by Stanford Professor Frank Wolak at the UCSD Economics Roundtable on Tuesday.
…probably confirms one’s priors.
All eyes have been on the housing market as the trigger for the financial crisis, but we’re all aware that there are other potential “triggers” for additional distress: auto loans and credit cards. In addition, spreads are not everything — levels of real interest rates matter as well.
Plenty of gloom out there if you’re hungry for more. But I wanted to pass along a couple of developments this week that give me some hope.
IMF research economist
Prakash Loungani reports some statistics on the extent to which housing price declines are being seen worldwide.
From the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel‘s description of Krugman’s scientific contributions:
Trade and Geography — Economies of Scale, Differentiated Products and Transport Costs
By the late 1980s, researchers had begun to integrate economies of scale into general equilibrium models of location and trade, thereby giving precision to the verbal analyses of earlier researchers and adding important new insights. In the resulting work, now commonly known as the new economic geography, economic geographers made use of the new tools, along with economists who took a renewed interest in the field. Several researchers took part in these developments, but the most influential contributions were made by Paul Krugman.