Economics
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Two days after assuming office in one of the most turbulent phases in the history of the euro zone, Mr. Draghi signaled that he might be more willing than his predecessor, Jean-Claude Trichet, to tolerate inflation in the name of economic growth. The bank cut the benchmark rate to 1.25 percent from 1.5 percent, a move aimed at putting more money into the European economy by making borrowing easier.
European Central Bank, Under New Chief, Cuts Key Rate - NYTimes.com
A Failed Global Recovery - Stephen S. Roach - Project Syndicate
Exit from comment view mode. Click to hide this space Comments View/Create comment on this paragraph NEW HAVEN – The global economy is in the midst of its second growth scare in less than two years. Get used to it.
A Tale of Two Defaults - Daniel Gros - Project Syndicate
Exit from comment view mode. Click to hide this space Comments View/Create comment on this paragraph BRUSSELS – Once upon a time, there was a country plagued by large deficits, high inflation, and decades of economic stagnation. When economic problems once again became particularly acute, the country’s leadership embraced a radical approach to achieving price stability. Comments View/Create comment on this paragraph A new currency was introduced and pegged to the US dollar at a one-to-one exchange rate. A new law stipulated that this quasi-monetary union was to last forever.
The Second Great Contraction - Kenneth Rogoff - Project Syndicate
Exit from comment view mode. Click to hide this space Comments View/Create comment on this paragraph CAMBRIDGE – Why is everyone still referring to the recent financial crisis as the “Great Recession”? The term, after all, is predicated on a dangerous misdiagnosis of the problems that confront the United States and other countries, leading to bad forecasts and bad policy. Comments View/Create comment on this paragraph The phrase “Great Recession” creates the impression that the economy is following the contours of a typical recession, only more severe – something like a really bad cold. That is why, throughout this downturn, forecasters and analysts who have tried to make analogies to past post-war US recessions have gotten it so wrong.Exit from comment view mode. Click to hide this space BEIJING – While the downgrade of United States government debt by Standard & Poor’s shocked global financial markets, China has more reason to worry than most: the bulk of its $3.2 trillion in official foreign reserves – more than 60% – is denominated in dollars, including $1.1 trillion in US Treasury bonds.
China’s $3.2 Trillion Headache - Yao Yang - Project Syndicate
The Australian Dollar: Up In The Air - beinformed Journal - beinformedjournal
While the flood of disappointing financial news from the EU, the gloomy prospects of the € and the unending debt ceiling debate in the US, seem to dominate most of the global financial news these days, somewhere else in the world, another currency is making news as well, albeit of a different kind. The Australian dollar (AUD) - otherwise known as the Aussie - has peaked to a 28-year high against the USD. Image Source:Wiki
Hedge Funds Seek Big Gains in Greek Crisis Hedge Funds Seek Gains Amid Market Turmoil - NYTimes.com
Algebris, a $1.3 billion fund that focuses on global financial stocks, was down about 7 percent for the year through late June because of shares it held in European financial companies. Those stocks fell sharply recently amid fears they could have losses if Greece defaulted on its debt. Still, undaunted by the risks that the Greek crisis could spread to other countries, managers at Algebris decided to buy more shares of European financial companies on the cheap.
Corporate Cash Con - NYTimes.com
And now trickle-down economics — specifically, the idea that anything that increases corporate profits is good for the economy — is making a comeback.