Top 5 risks to China’s economy (video)

11th June 2012

 

Stiglitz, Conard Debate Income Inequality

Edward Conard, a former partner of Mitt Romney at Bain Capital, and Joe Stiglitz, a Nobel-winning economist, face off in an amusing but important debate on income inequality. See who came out on top. Bloomberg

 

Sylvia Nasar on Dickens and Marx as Economists

Sylvia Nasar, author of "Grand Pursuit" explains how Charles Dickens' A Christmas Carol was a pessimistic critique of the political economy that prevailed in mid-19th century England. She also reveals that the Bible's book of Revelations underpinned the economic philosophy of Karl Marx. tvo

 

Krugman vs. Estonia

Johns Hopkins University economist Steve Hanke on why New York Times columnist Paul Krugman is wrong about Estonia's tax and spending reforms. The Wall Street Journal

 

Top five risks to China's economy

Included in the list of things economists are worried about are: the very slow government response to the allocation of public funds, a property bubble, weak bank loans, social stability and a Greek exit from the euro. Reuters

 

How Vulnerable Is US Over Europe's Economic Troubles?

Economist Nariman Behravesh says of the two main linkages between Europe and the US economy – exports and the banking system – the latter is most vulnerable because any pull back by European banks or credit tightening will have global ramifications especially for US banks. PBS Newshour

 

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The Financialist

16 thoughts on “Top 5 risks to China’s economy (video)”

  1. Anonymous says:

    Shaun,
    It appears Cyprus also denied aid in the Greece – German crossfire!
    German gold held in France to be returned – all good news for the Euro exchange rate?

    1. Anonymous says:

      I suggest that Cyprus being denied bank aid is a good thing. Greece has been receiving “bank aid” for over 2 terrible years and it is still sinking.

      Iceland did without the “aid” of a bank rescue and Iceland has already started recovering.

      1. Anonymous says:

        Agreed the support to banks is “the gift that keeps on taking” (not my quote unfortunately) still awaiting criminal charges for those banksters involved.

    2. Anonymous says:

      Hi Chris

      I know that it is against all logic but the Euro rally seems as if it may continue for a bit. There was a bad sign for it though when JW’s 9/9 man Thomas Stolper predicted it was going to US $1.40 a while back….

      Today saw more media speculation on the £ with even Andrew Neil joining in suggesting it was due to economic weakness,which would leave a Euro analyst with something of a conundrum!

  2. Anonymous says:

    Shaun, I think this is the best post of yours I have ever read. Well done. I can’t disagree with any of it. The trashing of Greece by the joint forces of the ECB, Eurogroup and IMF will go down as one of the worst examples of economic imperialism in history.

    But I would give the IMF some credit for finally speaking out, even though they have tempered their comments to some extent for political acceptability. They have been clearly uncomfortable in the Troika for some time. It is hard to see how the Troika can continue on its present path after a report as damning as this. I would say the IMF is pulling the plug.

    1. Anonymous says:

      Hi Francis
      Thank you. I have seen the build-up of a consensus tha the likelihood of a “Grexit” from the Euro has disappeared into the distance as 2012 moved into 2013. Yet the facts point in the opposite direction I think and as you say it would seem that some at least at the IMF agree with me.

  3. pavlaki says:

    Spot on! This is exactly what I hear from the Greeks themselves ( maybe not the detailed numbers, but the gist of it) which completely is at odds with the garbage coming out of the EU/ ECB. They are doing a first class job of talking up the Eurozone ( and I mean this as a compliment – we need to do much more of this to restore confidence and a feel good factor) but the facts do not support the rhetoric. For example they claim bond sales are doing well but when you look at who is buying the bonds it is often the government of the country concerned using funds earmarked for other purposes! They talk of positive contagion but I just don’t see it on the ground. The question is; are they going to get away with it? Will the markets eventually recognise that the emperor has no clothes?

    1. Anonymous says:

      Hi pavlaki
      I think that the markets have spotted the continuing and expanding bailout and decided that the other Euro nations now have a lot of “skin” in the game. And some funds are keen for yield of which there is little to be found.
      A price or atrend in prices can be wrong…

  4. forbin says:

    hello shaun,

    oh why does the the IMF mantra of its “all right , ladies and gentlemen” whilst trashing the Greek economy remind me of the book

    http://en.wikipedia.org/wiki/This_Way_for_the_Gas,_Ladies_and_Gentlemen

    the lie that the “inmates” had a future and that thing would be alright for them, but never , ever , tell them the truth …….Keep The Big Lie Going….

    chilling to me , and the way our leaders can see no future without the EU

    Does Japan need to join China?

    Do we need to join the Dollar zone – why not the arguements are about the same…. except we all speak a common language( mostly)

    Well , from the Stalls here the show must go on!

    Forbin

    1. Anonymous says:

      Hi Forbin
      When the debate over Euro entry for the UK began I pointed out that it would have been more logical for us to have joined the US $. The look of bafflement that provoked from some “experts” gave me some wry humour if nothing else.

      1. James says:

        I am sure btw that it would have been much easier from a currency perspective. I was at school in the USA in 1977 and the exchange rate was 1.7 to the £, ie only about 5% from where it is now. Rather different from the change with the Deutschemark over the same period…

  5. James says:

    Great post Shaun.
    I suspect that, just through the laws of nature, the figures will start to look better at some stage (i.e. Greece will at some point grow or at least shrink slowly). I think that I can already hear the Europhile voices claiming the great success of the Eurozone as soon as this happens. I am absolutely sure that:
    1. No-one is going to admit any of what you describe as true
    2. No-one is going openly to change policy of austerity
    3. Greeks are going to continue to suffer
    4. No-one has thought through the cost of what is happening in human or financial terms or how to reverse the borrowing
    5. No-one really believes that the Greeks can actually pay this debt off.
    So, we have arrived at the mutual back-slapping phase for the politicians, just as
    1. The Greek people are really suffering
    2. There is no solution to Greece’s debt crisis.
    It was ever thus

    1. Anonymous says:

      Hi James

      Thank you. Something like building activity would be a favourite to look better at some point as it cant keep falling 30/40% a year even with the mismanagement we have seen. As the numbers drop the chance of a slowing must increase….

  6. Rods says:

    Hi Shaun,

    Another excellent blog.

    I read about this over the weekend. The Greeks Government really don’t seem to be doing very well at all. I wonder how much of this is due to public and personal vested interests, where being a top politician is a rich persons pass time!

    With the IMF report distancing themselves from the ECB and Eurozone countries where the taxpayer is on the hook, I think this is part of a softening up process by the IMF for a Greek haircut to make the debt sustainable, while trying to avoid the same fate for the IMF part, so they don’t make their first losses in history. Time will tell of whether they will succeed!

    Economists and banks are still calling the odds of about 30% on a Grexit before 2016, but it is unlikely this year where German elections aren’t until September and Merkel making sure it doesn’t happen at all costs.

    Personally, I think the Greek Government will take the route of least resistance, which is grabbing the handouts for as long as possible and putting off most of the vital and necessary reforms until another day. But this is hardly unique to Greece, there are politicians here, in much of Europe and the US all doing the same. Kicking the can down the road in the hope that something will turn up.

    Anyway you heard it hear first! In April the Government will be blaming the ‘wrong kind’ of winter weather for our triple dip recession!

    The last few days with yellow, amber, red alerts, limited road, rail and air travel with the country in complete chaos, how are they going to cope when we have some proper winter weather? This big Government, risk adverse, can’t do, nanny state in the UK I think sums up quite well why our economy is 3% below the 2008, compared to the ‘can do’ US who are 3% above.

    At the moment we seem to be in a bit of a lull before the storms of the US debt ceiling and where they have only kicked the tax and deficit can two months down the road, continued UK stagflation and missed deficit reduction targets and more economic fire fighting required in Europe.

    1. Anonymous says:

      Hi Rods

      Thank you. Oh and if Friday’s number is negative for UK growth which is looking very possible then they may need to blame the weather a bit sooner than April! The catch is that in spite of the last 3/4 days this has been a mild if wet winter. But of course reality often struggles to get a look-in…

  7. Maggi says:

    Sadly this is a brilliant post. I mourn for the young people in Greece whose vitality will be sucked out of them because of the appalling economic conditions and I have sympathy for their parents who have to watch on with no hope of improving their children’s prospects.

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