Offshore Capitalist

Category Archives: Economics

Japan’s debt-ridden govt plans new stimulus

December 1, 2009 in Economics, Japan by Roy

Japan’s debt-laden government said Monday it planned a new round of stimulus spending worth more than 31 billion dollars to prop up a feeble economic recovery that is threatened by the strong yen.
Japan, which has this year been digging itself out of its worst post-war recession, now faces the threat of the yen trading at [...]

Australia Increases Benchmark Interest Rate to 3.75%

December 1, 2009 in Commodities, Economics by Roy

Dec. 1 (Bloomberg) — Australia’s central bank raised its benchmark interest rate by a quarter percentage point for an unprecedented third straight month as evidence mounts that the nation’s economy is strengthening.
Reserve Bank Governor Glenn Stevens increased the overnight cash rate target to 3.75 percent from 3.5 percent in Sydney, as forecast by 19 of [...]

Efficient Markets or Herd Mentality? The Future of Economic Forecasting

November 21, 2009 in Economics by Roy

Ever wonder why you succumbed, yet again, to advertising hype or deceptive packaging and overpaid for a product? Or bought securities that you know were overvalued when the herd instinct was just too strong to resist?
Such irrationality is the focus of behavioral economists, who appear to be gaining greater credibility in macroeconomic circles since the [...]

Société Générale tells clients how to prepare for ‘global collapse’

November 20, 2009 in Economics by Roy

Telegraph — Société Générale has advised clients to be ready for a possible “global economic collapse” over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.
In a report entitled “Worst-case debt scenario”, the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto [...]

Recovery still too timid to halt rising unemployment, says OECD Economic Outlook

November 20, 2009 in Economics by Roy

The economic recovery now spreading across OECD countries is still too timid to halt the continuing rise in unemployment, according to the OECD’s latest Economic Outlook.
The jobless rate is expected to peak in the first half of 2010 in the US, but it may not be until 2011 that unemployment begins to fall in the [...]

Obama: Too much debt could fuel double-dip recession

November 19, 2009 in Economics by Roy

BEIJING, Nov 18 (Reuters) – President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.
With the U.S. unemployment rate at 10.2 percent, Obama told Fox News his administration faces [...]

Bear market rally nearing its end, says Barry Ritholz

November 19, 2009 in Economics by Roy

Barry Ritholz, author of the best-selling book Bailout Nation, thinks the market moves of this year signify a typical bear market rally and there are more choppy waters approaching.
Speaking at the Citywire Fund Selector Forum on Wednesday evening, Ritholz, who is CEO and director of equity research at FusionIQ in NewYork, dismissed the idea that [...]

Bernanke Says ‘Not Obvious’ Asset Prices Misaligned

November 17, 2009 in Economics by Roy

Nov. 16 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said it’s “not obvious” that asset prices in the U.S. are out of line with underlying values after a 64 percent jump in the Standard & Poor’s 500 Index from its March low.
“It is inherently extraordinarily difficult to know whether an asset’s price is in [...]

China rounds on U.S. rates as global economic risk

November 15, 2009 in Currencies, Economics by Roy

BEIJING (Reuters) – Ultra-low interest rates in the United States are fuelling speculation in overseas asset markets and threatening the global economic recovery, a senior Chinese official said on Sunday.
In unusually blunt criticism of U.S. monetary policy on the day that President Barack Obama arrives in China for a visit, Chinese banking regulator Liu Mingkang [...]

Ron Paul: Be Prepared for the Worst

November 15, 2009 in Economics by Roy

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the [...]

Eurozone emerges from recession

November 15, 2009 in Economics by Roy

The eurozone economy has emerged from recession after growing between July and September, figures have shown.
The 16 nations that use the euro collectively grew 0.4%, after shrinking by 0.2% between April and June.
The French and German economies both grew for a second consecutive quarter, confirming the eurozone’s two largest economies are out of recession.
However, both [...]

US trade gap widens unexpectedly

November 15, 2009 in Economics by Roy

The US trade deficit unexpectedly widened in September by the largest amount in 10 years, figures show.
The trade gap, the difference between US imports and exports, grew 18.2% to $36.5bn (£21.9bn) from August.
Imports rose 5.8%, the biggest jump since 1993 and an indication that consumer spending is recovering.
Separately, US consumer confidence figures unexpectedly fell. The [...]

APEC Wary of Withdrawing Stimulus Too Early, Too Late

November 15, 2009 in Asia-Pacific, Economics by Roy

Nov. 14 (Bloomberg) — Asia-Pacific leaders said the withdrawal of economic stimulus packages is all about timing: too early and the recovery stalls, too late and resultant stock and property bubbles may trigger a fresh financial crisis.
“It is premature to talk about recovery of the global economy,” Russia’s President Dmitry Medvedev said in a speech [...]

Global recovery faces ’serious hurdles’ next year – World Bank

November 15, 2009 in Economics by Roy

The global economy faces serious hurdles next year including “large-scale” unemployment in rich nations, asset bubbles, and backsliding towards protectionism, the World Bank chief said on Friday.
In a sobering assessment of the fragile status of the economic recovery, Robert Zoellick outlined a list of potential pitfalls to a business forum on the sidelines of an [...]

Australia’s resources boom set to grow: central bank

November 7, 2009 in Commodities, Economics by Roy

Australia’s resources boom is set to grow as Asian economies lead the global economic recovery, the country’s central bank said Friday as it lifted growth forecasts.
The Reserve Bank of Australia (RBA) said resources-driven exports had held up during the financial crisis and had been buoyed by strong expansion in the mining sector. The bank lifted [...]

APEC to maintain stimulus till recovery in place: draft

November 7, 2009 in Asia-Pacific, Economics by Roy

APEC leaders will maintain hefty stimulus packages until they secure a “durable” recovery from the global economic slowdown, according to a draft communique obtained by AFP Friday. “We will maintain our economic stimulus policies until a durable economic recovery is secured,” the draft said, stressing that “economic recovery is not yet on a solid footing”. [...]

Jim Rogers ‘rogered’ by Roubini

November 5, 2009 in Economics, Gold by Roy

LONDON (Commodity Online): A gold forecast by global commodities guru Jim Rogers has turned controversial. Nouriel Roubini, the global economist who predicted the economic crisis, says the gold forecast by Jim Rogers that the yellow metal will double to $2,000 or more an ounce is “utter nonsense.”
“Maybe, gold will touch $1,100 or so but $1,500 [...]

China won’t sell dollars to buy gold

October 27, 2009 in Currencies, Economics, Gold by Roy

DUBAI Commodity Online: China is on a gold buying spree these days to ensure that the country overtakes the United States in gold reserves.
China, which is “underweight” on gold holdings, will increase buying as the economy expands, said Jeffrey Rhodes, chief executive officer of INTL Commodities DMCC. China’s 1,054 tons of gold represents less than [...]

Asian leaders pitch rival blocs to boost global clout

October 26, 2009 in Economics, Emerging Markets by Roy

Asian leaders heard competing plans from Australia and Japan for a massive EU-style community covering half the world’s population as they wrapped up their annual summit on Sunday.
The proposals at the meeting in Thailand come as the fractious region seeks to reduce its dependence on the United States and boost its global clout after recovering [...]

The Conference Board Leading Economic Index™ (LEI) for the U.S. Improves Again

October 25, 2009 in Economics by Roy

The Conference Board Leading Economic Index™ (LEI) for the U.S. increased 1.0 percent in September, following a 0.4 percent gain in August, and a 1.0 percent rise in July.
Click image to view full size.
“With the sixth consecutive increase, the LEI’s six-month growth rate has improved to its highest pace since 1983,” says Ataman Ozyildirim, Economist [...]

Economist: Dollar decline is overblown

October 25, 2009 in Currencies, Economics by Roy

From The Economist on the worries over the recent dollar’s decline…
Dollar declinism is overblown. It exaggerates the scale of the slide and misunderstands its cause. Much of the recent weakness simply reverses the earlier safe-haven flight to dollars, a sign of investors’ optimism about riskier assets rather than their fears about America’s currency. On a [...]

Surprise: UK Still In Recession

October 25, 2009 in Economics by Roy

Statistics from the ONS show that the UK’s GDP contracted third quarter of 2009.  Unlike peers such as France and Germany, the UK is still in technical recession.
Gross Domestic Product (GDP) decreased by 0.4 per cent in the third quarter of 2009, compared with a decrease of 0.6 per cent in the second quarter. The [...]

EBRD revises down 2009 economic forecasts, sees fragile recovery in 2010

October 15, 2009 in Eastern Europe, Economics, Russia by Roy

The economies of central and eastern Europe are expected to contract by an average of 6.3 per cent in 2009 following steep output declines in the first half of the year. Signs of positive growth in the third quarter of 2009 suggest that the recession is now bottoming out in many countries of the EBRD [...]

Lower household debt will stunt economic recovery

October 15, 2009 in Economics by Roy

The failure of banks to lend will stall economic recovery in the developed world, as households take on less debt than before and so reduce demand, according to Legal & General Investment Management LGIM.
LGIM economist James Carrick pictured said that while policymakers in the developed world have been working to encourage banks to resume lending [...]

Monthly Oil Market Report (October 09) – OPEC

October 14, 2009 in Economics, Reports by Roy

Extracts from the Monthly Oil Market Report.
The world economy now appears to be entering into a new phase, moving from a period of containing the crisis to one of economic recovery. Over the course of this year, financial markets have stabilized and the outlook for the world economy has greatly improved. The second quarter is [...]

HSBC chief warns of second downturn

October 5, 2009 in Economics, Equity Markets by Roy

The group chief executive of HSBC, Michael Geoghegan, has warned a second downturn could be on the horizon and has reacted by limiting the bank’s expansion.
In an interview with the Financial Times, Geoghegan – a career banker who has been with HSBC for more than three decades – said he believed the recovery was more [...]

Global Recovery Under Way but Likely to Be Slow, Says IMF

October 4, 2009 in Economics, Reports by Roy

* Global activity now on the rise again, expected to reach 3 percent next year
* Rebound driven mainly by China, India
* Restoring financial sector health, continued macro policy support remain priorities
(Click image to see full size)
After a deep recession, global economic growth has turned positive, driven by wide-ranging, coordinated public intervention that has supported [...]

Excerpts from a speech by World Bank President Robert B. Zoellick

September 28, 2009 in Economics by Roy

WASHINGTON, September 27. 2009 — The following are excerpts from a speech prepared for delivery on Monday by World Bank Group President Robert B. Zoellick. Entitled “After the Crisis?”, the speech will be delivered at the Paul H. Nitze School of Advanced International Studies of the Johns Hopkins University, in Washington, D.C., in the lead-up [...]

Switzerland replaces United States at top of competitiveness rankings

September 24, 2009 in Economics, Sector & Specialist Reports by Roy

Dalian, People’s Republic of China, 8 September 2009 – Switzerland tops the overall ranking in The Global Competitiveness Report 2009-2010, released today by the World Economic Forum ahead of its Annual Meeting of the New Champions 2009 in Dalian. The United States falls one place to second position, with weakening in its financial markets and [...]

Global Information Technology Report 2009

September 24, 2009 in Economics, Sector & Specialist Reports by Roy

From the World Economic Forum – Published 26 March 2009.  The Report stresses the importance of ICT as a catalyst for growth in the current global turmoil.  Denmark and Sweden once again lead the rankings for the eighth consecutive year by the World Economic Forum.
The United States follows suit, up one position from last year, [...]

Stiglitz Says Bank Problems Bigger Than Pre-Lehman

September 22, 2009 in Economics by Roy

Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.
“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The [...]

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