It wouldn’t be Euro$ #5 without perhaps the last of its rituals completed: the mainstream downgrades. Go back in time to each of the prior episodes, markets change, the data inflects, and then only later do surprised, shocked Economists at whichever establishment outpost begin to recalculate their DSGE outputs. Every time.Way back in 2015, it took the IMF’s semi-annual World [...]
The eurodollar era saw not one but two credit bubbles. The first has been studied to death, though almost always getting it wrong. The Great Financial Crisis has been laid at the doorstep of subprime, a bunch of greedy Wall Street bankers insufficiently regulated to have not known any better. That was just a symptom of the first. The housing [...]
When we talk about or estimate long run growth rates, we intend to encompass entire cycles. In other words, whatever the long run average of real GDP growth, for instance, it takes into account both recession and recovery to harmonize into what would be a constant trend or potential. From that view, we would expect that while growth would be [...]
When the IMF released its semi-annual World Economic Outlook in April, it was still caught up in the GDP/Establishment Survey frenzy of late 2014. Despite the fact that Q1 GDP was certain to be negative by the time of publication, the IMF was wholly undeterred preferring instead to view the US as still the global engine and hope. They even [...]
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