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5 Things to Watch at This Week's Fed Meeting
Pedro Nicolaci da Costa / WSJ Economics
The Fed will probably repeat that it won't start lifting borrowing costs until it sees more improvement in the labor market and is reasonably confident inflation will move toward its 2% target. Beyond that, any changes could be very subtle.
Related: Déj vu? Fed may struggle to hike if U.S. optimism fades for H2
Siddharth Iyer / MacroScope
The U.S. Federal Reserve may find it even more tough to raise interest rates as the year wears on if dwindling expectations for growth are any guide.
Related: Federal Reserve Meeting: Why The Fed Won't Raise Rates Until 2016
Jeff Voudrie / See It Market
The S&P 500 has once again powered to all-time highs. Yesterday it reached an intraday high of 2125 before pulling back. There is an FOMC Federal Reserve meeting that starts today The post Federal Reserve Meeting: Why The Fed Won't Raise Rates Until 2016 appeared first on See It Market ...
Related: Richmond Fed: "Manufacturing Sector Activity Remained Soft"
Bill McBride / Calculated Risk
From the Richmond Fed: Manufacturing Sector Activity Remained Soft; Employment and Wages Grew Mildly Overall, manufacturing conditions remained soft in April. The composite index for manufacturing moved to a reading of −3 following last month's reading of −8. The index for shipments and the index for new orders gained seven ...
Related: Two Observations on US Corporate Earnings
Marc to Market
The US corporate earnings season is almost half over. Fears that the US S&P 500 would report the first decline in income since 2009 have eased.One of the key reasons is that operating margins appear to have improved more than anticipated. Many had seemed to exaggerate the impact of the ...
 
A detailed proposal for a complementary currency for Greece
Editor / Real World Economics
from Alan Harvey Introduction Austerity has delivered obvious suffering to the Greek people and serious burdens to the Greek state, trials that do not need to be enumerated here. The mechanics of austerity drain money and the goods and services it will buy from the economy. Austerity follows from the ...
Related: Did Greece get promised a deal on t-bills?
Peter Spiegel / FT Brussels Blog
Varoufakis, right, with Dijsselbloem during a eurogroup meeting in February Monday night's live TV interview with Alexis Tsipras, the first since he became Greece's prime minister, has generated headlines because of his declaration that, if the deal he ultimately strikes with eurozone creditors includes measures he promised to avoid, he'd ...
Related: "Are Creditors Pushing Greece Deliberately Into Default?" by Paul De Grauwe
Paul De Grauwe / Social Europe Journal
The Greek drama has entered its endgame. The Greek government has to repay loans to the IMF and other public institutions in the near future but does not have the cash to do so. The lenders refuse to come forward in providing liquidity as long as the Greek government does ...
Related: ECB's Coeure says Grexit not a scenario ECB is working on - magazine
Reuters
FRANKFURT, April 28 (Reuters) - The European Central Bank is making no plans for a Greek exit from the euro zone, ECB Executive Board Member Benoit Coeure said in a magazine interview.
Related: Tsipras talks up May deal with creditors
Mike Peacock / MacroScope
Tsipras sees bailout deal but opens prospect of referendum.
Related: Three possible Greece debt deal scenarios - JP Morgan
FXStreet / FX Street
FXStreet (Barcelona) - John Normand, Head of FX, Commodities & Int'l Rates Research at JP Morgan, shares the three key scenarios possible in the Greece debt deal and the possible impact on euro and rates.Key Quotes "There are three scenarios: (1) resolution in Q2 until the next rollover hump in ...
 
Obama Presses Case for Asia Trade Deal
WSJ
In an interview with The Wall Street Journal, President Obama warns that China would step into the economic vacuum if the U.S. fails to complete and enact a proposed free-trade deal with Asia.
Related: Is Economic Openness an "Enemy of the People"?
Petersen Institute
loosely translated from the Portuguese as "handing over," is an old term used by those who argue that openness to trade and investment is akin to giving up the pursuit of domestic interests in favor of those of large foreign companies. The accompanying rationale is that these companies hurt the ...
Related: Americans Get Free Trade's Dark Side
Noah Smith / Bloomberg Views
There might even be more losers than winners.
Related: Thinking About TPP and TATIP: "Free Trade"
Brad DeLong / Grasping Reality
[**Over at Equitable Growth**][1] The advocates for the TPP and TATIP should be making the following points: 1. The gains from trade from these agreements will be equitably distributed as a result of policies X. 2. The stronger copyright protections will actually boost world growth. 3. Alternatively, if (2) is ...
Related: Why TPP on IP law is better than you think
Tyler Cowen / Marginal Revolution
I have read and heard many times that TPP will bring harsher intellectual property law than is appropriate for the poorer Asian countries. In general poorer countries often benefit from weaker IP enforcement, more copying, and lower prices. This is standard stuff. It is less commonly recognized by the critics, ...
Related: In WSJ Interview, Obama Says Failure on Asia Trade Deal Benefits China
WSJ China Real Time Report
President Obama made his case for the proposed Trans-Pacific Partnership warning that if the U.S. doesn't enact a free-trade deal with Asia, then China will write the rules in that region.
 
Freeing American Crude: Oil Export Controls Amount to a Trifecta of Bad Policy
Petersen Institute
It's rare to find a policy that combines bad economics with harmful national security overtones and, at the same time, violates US obligations to the world trading system. But US restrictions on crude oil exports are just that rare bird. Op-ed by Gary Clyde Hufbauer.
Related: Nigeria oil firm overpaid government
BBC
An audit finds that Nigeria's state oil company overpaid the government $750m (£490m), at a time when it was accused of massive corruption.
Related: Refining helps BP and Total weather oil price storm
Roland Jones / Fortune Finance
Large oil companies have closed down dozens of refineries in the past few years due to overcapacity.
Related: Commodity prices: Over a hundred years of booms and busts
Andrew Powell / VoxEU
Commodity prices are very persistent. A boom is always followed by a bust, and after a slump, a boom comes along. This column reviews some basic aspects of commodity theory and their role in the last boom. Finally, it presents arguments stating that lower commodity prices are here to stay ...
 
Bundesbank head says euro state insolvency possible without system collapse
Reuters
FRANKFURT, April 28 (Reuters) - The head of Germany's Bundesbank criticised Greece's government on Tuesday for failing to implement reforms and said it was possible for a country within the currency...
Expand sublinks   Also:  WSJ | Telegraph | CNBC | FX Street
Related: Are Weak U.S. Earnings Good For Europe?
Alen Mattich / MoneyBeat
The U.S. corporate profits are crumbling around the edges. Is that good or bad news for Europe?
Related: Deutsche's radical revamp foiled by ECB stress test
IFR
(Reuters) - A radical plan for Deutsche Bank to become a pure investment bank and corporate lender was dropped after stress tests demanded by the European Central Bank concluded the model would not withstand a severe financial crisis, sources said.
Related: Basket Case No More, Europe A Hot Bed Of Corporate Investment
Kenneth Rapoza / Forbes
European nations dominate A.T. Kearney's index measuring foreign corporate investment plans for the next year. Where does the U.S. fit?
 
China's Slowing New Normal
Michael Spence / Project Syndicate
While some observers agree that China can sustain 6-7% growth for the next decade or so, provided that the government implements a comprehensive set of reforms in a timely manner, others expect its growth to continue to trend downward. Who is right will depend on China's success in boosting household ...
Related: Barack Obama: China's World Bank rival must 'do right by its people'
AFP / Telegraph
US President and Japanese counterpart claim they are not against China's Asia Infrastructure Investment Bank but it must follow strict guidelines
Related: China's AIIB Bank: Part of a Much Bigger Master Plan
Geoff Raby / National Interest
Geoff Raby China, Asia "That China would build its own international bodies, and will continue to do so, shouldn't be a surprise." In his latest book Henry Kissinger anticipated China's initiative to create the first new international organization of the 21st century. He didn't foresee the Asian Infrastructure Investment Bank ...
Related: Insurance companies are China's new shadow banks
Guest writer / Beyond BRICs
By Andrew Collier, Orient Capital Research The ever ingenious Chinese financial system has developed a new kind of Shadow Bank - insurance companies. China's $586bn stimulus package in 2009 caused a flurry of lending through the country's financial arteries. Some of this money ended up leaking out of the banks ...
Related: A compelling case for Chinese monetary easing
Bruegel
• Chinese monetary policy was excessively tight in 2014 but started loosening in late 2014, in an attempt to cushion growth, facilitate rebalancing, support reform and mitigate financial risk. • There are three main reasons for this policy shift. First, there is evidence that the Chinese economy has been operating ...
 
The Beginning Of The End For Putin? Real Reform Begins To Take Hold In Ukraine
Greg Satell, Contributor / Forbes
We are moving away from Russia and moving toward the civilized democratic world. We now know who are true friends now-Poland, the Baltics and the US. Our enemies are Russia and anybody who supports it."
Expand sublinks   Also:  Value Walk | WSJ | World Affairs | WSJ
Related: Russia, Ukraine, and U.S. Policy
CFR
In his testimony before the Senate Committee on Armed Services, Stephen Sestanovich argues that Russian President Vladimir Putin could grow more dangerous—both for his neighbors and for the United States.
 
British economy slows ahead of general election
Associated Press
LONDON (AP) - Britain's economic growth has slowed to a quarterly rate of 0.3 percent in the January-March period, a drop that will be seen as setback to the Conservative-led coalition only days before a general election.
Related: The British economy after the coalition
Martin Wolf
Why should one be desperate to avoid a free loan? Growth-promoting borrowing is needed
Related: Drop in UK's economic growth: what the experts say
Graeme Wearden / Guardian
Economists' opinions are split between those alarmed by 'dramatic' slowdown and others confident the figures will be revised upwards soon Britain's economic growth rate halved in the first quarter of the year, from 0.6% to 0.3% - dealing a blow to the government's election hopes. Jeremy Cook, chief economist at ...
Related: BoE rate hike expected to begin from Q1 16 - RBS
FXStreet / FX Street
FXStreet (Barcelona) - Brian Mangwiro, Markets Strategist at RBS, comments on the market pricing related to BoE rate hike, and further forecasts Q1 16 to likely be the timing for the hawkish shift in policy.Key Quotes"At the time of the last report, BOE lift-off was priced out of Aug'16. April ...
Related: Six charts summing up the agony and the ecstasy of Britain's recovery
Mehreen Khan / Telegraph
The latest GDP numbers have cast a shadow on the Tories pre-election promises, and here's why it's still not job done for George Osborne
 
Ghani's India Challenge
WSJ
On his first official visit to India, Afghanistan's president is trying to drum up investment amid concerns about his government's approach to Pakistan and the Taliban.
Expand sublinks   Also:  WSJ | FT | Gazzetta Del Sud | BBC
 
New Data Shows Russia's Demography Is Rapidly Deteriorating
Mark Adomanis / Forbes
Sometimes labeled "the dying bear" or "the dying nation," Russia has caught a lot of flack for its demographic problems. No demography isn't the most popular topic in the world, it's unfortunately quite a niche topic, but to the extent that anyone hears anything about Russia demography in the popular ...
Related: Russian Progress Spacecraft With Cargo For ISS Loses Communication
Clayton Browne / Value Walk
The Russian Progress cargo spacecraft taking a longer route to ISS to give time for flight controllers to fix the problem The post Russian Progress Spacecraft With Cargo For ISS Loses Communication appeared first on ValueWalk .
Related: What Central Europe Really Thinks About Russia
IVAN KRASTEV / NY Times
Poles and Bulgarians agree that Moscow's model isn't a viable alternative to ties with the E.U.
 
Japan shares shrug off negative data
BBC
Japanese shares ended higher on Tuesday despite negative retail sales data and a cut to the country's credit rating.
Related: Japan's Economy Needs Shock Therapy
William Pesek / Bloomberg Views
A bold economic experiment hasn't been bold enough.
 
Debt supercycle, not secular stagnation
Kenneth Rogoff / VoxEU
Weak, post-Crisis growth has been blamed on secular stagnation. This column argues that the 'financial crisis/debt supercycle' view provides a more accurate and useful framework for understanding what has transpired and what is likely to come next. The difference matters. Unlike secular stagnation, a debt supercycle is not forever. After ...
 
EMERGING MARKETS-Brazil, Colombia currencies lead gains ahead of Fed meeting
Reuters
By Walter Brandimarte RIO DE JANEIRO, April 28 (Reuters) - The currencies of Brazil and Colombia led gains in Latin American foreign exchange markets on Tuesday on expectations that U.S. policymakers...
Expand sublinks   Also:  Value Walk | IFR | Reuters | Beyond BRICs
 
How Does Spoofing Works? [INFOGRAPHIC]
VW Staff / Value Walk
Traders spoof by offering an artificial price for a contract, profiting when they dupe others into buying or selling at that price, as in the hypothetical graphic below. H/T Barry Ritholtz How Does Spoofing Works? Infographic source: Wall Street Journal The post How Does Spoofing Works? [INFOGRAPHIC] appeared first on ...
Expand sublinks   Also:  BBC | Guardian | Telegraph | VoxEU
Related: Why risk is hard to measure
Jon Danielsson, Chen Zhou / VoxEU
Regulators and financial institutions increasingly depend on statistical risk forecasting. This column argues that most risk modelling approaches are highly inaccurate and confidence intervals should be provided along with point estimates. Two major approaches, value-at-risk and expected shortfall are compared, and while the former is found to be superior in ...
 
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Fed mulls perma-QE
MacroBusiness
PBOC: We're not stimulating
MacroBusiness
Greek finance rebel gets the cold shoulder in Riga
Irish Times
What game is Obama playing with the TPP? A bargain? A ruse?
Daily Kos
5 Things to Watch on Japan Premier Abe's Trip to the U.S.
WSJ Japan Real Time
Ray Dalio: China Is Currently Richer Than The US [VIDEO]
Value Walk
Reminder: Tuesday event (A New Start for the Eurozone: Dealing with Debt)
Irish Economy
FOMC unlikely to tee up the first rate hike - BNP Paribas
FX Street
Capital Controls Arrive: Greece Begins Confiscating Deposits Of "Small Debtors"
Zero Hedge
The real threat to Europe lies in Ukraine
Wolfgang Munchau
What's this?
Link: Centre for Macroeconomics
Link: Economic and Social Research Council
 
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