Tag Archives: European debt crisis

Surprise Rate Cut in Europe

Europe: Surprise rate cut to preempt deflation & support fragile economic turnaround To the surprise of many, the European Central Bank (ECB) decided today to cut in half its key, short-term interest rate to 0.25% from 0.5%. While the option to reduce rates further was on the table, the lack of adequate “signaling” ahead of [...]

If it’s Thursday, I must be in London

I am currently in Europe, following an intense program of meetings, conferences and symposia over the next two weeks. My visit began in Berlin; I then moved to London; next week, as part of a delegation from the National Association for Business Economics (NABE), I will meet business leaders, economists and policy makers in Paris [...]

Progress for Italy

Italy may be closer to a political solution. Napolitano, reelected president by parliament, has asked Enrico Letta to form a government. Letta is a moderate from a center-left coalition, likely to seek support from former prime minister Silvio Berlusconi to form  a “Grosse Koalition” government A coalition between the center-left and center-right is the only option, after [...]

Does Cyprus matter?

As a matter of fact, it shouldn’t. The country is a small island in the Eastern Mediterranean, with one million people and not quite $24 billion in GDP; Cyprus represents a small fraction of the more than $13 trillion GDP of the Eurozone. Furthermore, the rescue package decided by the European Union (EU) over the [...]

Italian Elections officially Result in Chaos

The Italian elections have resulted in no clear winner and several losers. Most importantly, the already-precarious political credibility of the country appears to be lost, too. Prime Minister Mario Monti’s  commitment to austerity and structural reform has been rejected by the voters; he won only 10% of the votes. The center-left coalition, led by Mr. [...]

Production Gains Still Tepid

Industrial production rose 0.4% in September, providing some offset to the 1.4% loss we saw in August. Hurricane Isaac and the idling of production along the Gulf of Mexico shaved 0.3% from production in August. Gains were uneven with mining, utilities and (thankfully) construction leading; consumer goods (mostly vehicles) flatlined after declining sharply in August. [...]

Trade Deficit Widens on Weaker Goods Exports

The U.S. trade deficit widened to $44.2 billion in August from a revised $42.5 billion in July. A broad-based drop in goods exports was the primary source of weakness, as everything from industrial supplies to vehicles and heavy machinery all suffered from weakening growth abroad, primarily in Europe. China held up better than expected as [...]

Philly Fed Manufacturing Index Treading Water

The Federal Reserve Bank of Philadelphia’s Business Outlook Survey registered -1.9 in September, which is essentially flat. This follows larger negatives for the previous two months and suggests business activity is essentially paralyzed at a low level. It is the fifth consecutive negative reading for the index. Manufacturing, however, posted a modest increase, which is [...]

Moving on to Brussels, Belgium

A delightful dinner offered by our Swedish hosts at an art museum in the woods of Stockholm archipelago; a 4am wake up call for the flight to Brussels and a major fail in recharging my computer will make today’s update short. **************** The economic outlook conference hosted by Swedbank highlighted once again some sharp contrasts [...]

Stockholm, Sweden

We moved on to Stockholm tonight. Tomorrow morning, I will join a panel discussing the latest developments in the U.S. and European economies. Our friends and colleagues at Swedbank have arranged a very strong lineup for their annual outlook conference; it is a privilege to be part of such a distinguished event. Sweden is a [...]