Tag: Economy

Economy, US3 Comments

China and America economic future – Ferguson/ Fallows debate

Colin Henderson

A summary in NYT of the fascinating Ferguson/ Fallows debate at Aspen on the economic relationship between China and US. Ferguson: US and China are divorcing economically.  China will focus on internal consumption, not exports.  “Depreciation (of US $) is inevitable and the Chinese are working to end the dollar’s role as the world’s reserve currency.” Fallows: “…  doesn’t know what the future will hold, but he believes that Chinese officials still see the dollar as their least risky investment. Domestically, China will not turn democratic, but individual liberties will expand. He agreed that China and the U.S. will dominate … Continue reading China and America economic future – Ferguson/ Fallows debate

Economy

Future for many banks remains grim | Roubini

Colin Henderson

This interview with Roubini, on a visit to China, is wide ranging, and provides a good assessment of where we are in the economic cycle, why we got here, and importantly what to expect next.  In particular this assessment on US banks is sobering.  That aside, it is a worthwhile read. Dr. Doom Has Some Good News The first involved banks. Like Paul Krugman and others, Roubini had been warning that many banks were weaker than they seemed. Rather than trying to nurse them along, he said, the government should move straightaway to nationalization: “I’m concerned that we’re not going … Continue reading Future for many banks remains grim | Roubini

Canada, Economy, US3 Comments

Consumer mindsets in North America have shifted permanently with regard to finances

Colin Henderson

After my last post, I thought it better to follow up with some facts to support my contention that this economic recovery is L shaped in Canada and US.  This is not meant to be an economic projection, and I leave that to the professional economists.  However in terms of planning, banks ought to consider the high probability of a scenario where the reduction in economic activity will level off but hardly see growth in the near future.  This will be driven by consumer confidence and frankly their financial circumstances. If we go back to the root cause of the … Continue reading Consumer mindsets in North America have shifted permanently with regard to finances

Economy

World Bank GDF highlights growing risks to economic forecasts

Colin Henderson

When thinking about the future and the economic position of countries that banks must consider, I listen far less to politicians and more to IMF and World bank forecasts. The use (misuse) of the term recovery fails to acknowledge what the circumstances for people and businesses will be on the other side of the recession. Here is a new report from World Bank that looks to the future with more pragmatism, although they still use the word recovery.  Note their focus is skewed by their mandate for developing countries, however they have to look at the entire economic picture to … Continue reading World Bank GDF highlights growing risks to economic forecasts

Economy

Cabinet Office Pegs Global Economic Growth At Just 1% In 2010

Colin Henderson

I have read enough economic forecasts over the last 2 years to realise that this forecast from the Japanese government is the first time that government has recognised the obvious that the situation we are in is not going to resolve quickly. I am a firm believer in this being an L shaped recovery, and this report points in that direction.  There is just too much lag built into the shift we have experienced.  With such a dramatic and permanent drop in asset values we have seen, the natural deleveraging impact will take years to work through the system. Cabinet … Continue reading Cabinet Office Pegs Global Economic Growth At Just 1% In 2010

Economy

Worries about government debt load in Japan

Colin Henderson

Following on the testimony from US Bernanke today, similar moves in Japan, the next largest world economy (for the moment), to reduce debt which remains at a world leading high. Japan’s long-term public debt, which is already the largest of any industrialized nation, is projected to reach 168 percent of GDP at the end of March 2010, according to the ministry. … Concerning when to achieve a surplus in the primary balance, many members of the Aso-chaired panel believe it may take about 10 years, based on the latest economic growth and revenue projections, according to government officials.At the next … Continue reading Worries about government debt load in Japan

Economy, US5 Comments

Bernanke is concerned about budget deficits

Colin Henderson

Fed Chairman Bernanke picks his words carefully here as the US treads that line between economic recovery and much higher interest rates which would produce other unintended consequences such as stifling growth, currency value shifts or inflation. Bernanke calls for action on deficits | FT Ben Bernanke on Wednesday called on Congress to take action now to bring down long term US budget deficits, warning that the bond market was concerned about rising US government debt. The Federal Reserve chairman said the recent increases in bond yields “appear to reflect concern about large federal deficits” as well as improved optimism … Continue reading Bernanke is concerned about budget deficits

Economy, US1 Comment

No consumer driven economy in US | Geithner in China

Colin Henderson

Some important messages within Geithners speech in China today that paint a very different next few years compared to the last 10, and as the ‘G2’ move to manage a transition the American economy into one that is very different, yet stable.  And all this to be managed against the backdrop of  the fear of eventual inflation, which would devalue foreign holdings in US T-Bills, something China is acutely aware of. These macro factors will play a large role in US banks and credit unions strategy design for the next 5 years. no consumer purchase driven economy in US – … Continue reading No consumer driven economy in US | Geithner in China

Canada, Economy

Countries that are least affected by the Economic Crisis

Colin Henderson

An interesting survey of business reaction to the crisis, and which countries are least impacted.  Full ranking follows the map.  This explains a lot in terms of peoples reactions. Time will tell if this reaction remains constant, and what were the contributors to and rivers of this reaction. Countries that are Least Affected by Recession | digital inspiration The data is based on the results of a business confidence survey that was done on international business people of 24 nations to identify which countries they believe are surviving the crisis the best. Researched by Nobuyo Henderson Continue reading Countries that are least affected by the Economic Crisis

Uncategorized

California is in trouble – hard to imagine what that means

Colin Henderson

Could we see the state of California go under … ? California – a nightmare vision of the future | FT The Californian budget crisis is so severe that all public employees are having to take pay cuts. Public-health services are under serious threat, and there is talk of pushing Aids patients and the terminally-ill out onto the streets. It has proved impossible to raise taxes any further and the bond markets are in revolt. California is looking to Washington for help. But with the federal government running budget deficits of 12% of GDP, and the federal debt pushing up … Continue reading California is in trouble – hard to imagine what that means