Fwd: Macroperu USA negocia con piases del Pacíco trtado Comercial en Secreto. La lista incluye

Secrecy blankets trade talks By Carey L Biron WASHINGTON - The latest round of negotiations on the Trans-Pacific Partnership (TPP), potentially the largest free -trade agreement to be signed by the United States, began Tuesday with a blanket of secrecy over their content. Despite claims by the US government of considerable transparency in the process, the talks, being held in Dallas, are covering material that has remained almost completely out of the public's eye. "Because the negotiations have been conducted in extreme secrecy, we have no idea yet what is in the text," says Rashmi Rangnath, a director with Public Knowledge, an advocacy group here in Washington. "What we do know is that lack of   transparency tends to skew the text of such agreements in favor of large corporations." Although a draft of the chapter on intellectual property rights was leaked in February, much of the rest of the 26 chapters have been kept away from public scrutiny. Some outside of the negotiations have had significant time with the chapters, however. Early drafts of TPP content have reportedly been discussed at length with large corporate interests, such as 20th Century Fox, which has a key stake in intellectual property-related regulations. Thus far, the justification for this secrecy has been minimal. "Basically we have been told two things," Rangnath says. "First, that this is precedent. And second, that this level of secrecy is necessary during negotiations in order to arrive at a compromise." The TPP would be a free-trade agreement between the US and eight Asia-Pacific countries: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Canada, Japan and Mexico are also expected to join the talks, although the Japanese have yet to make a final decision on the matter. The possibility of future Indian and Chinese participation is being held out as a far-off, though for many tantalizing prospect. Proponents suggest that, if the TPP passes, it could boost intra-regional trade by more than US$1 trillion per year by 2025. While the official talks are to be held May 11-13, the full 12th round is said to be stretching from May 8-18. This is an unusually lengthy period for face-to-face negotiations, particularly given that the 11th round took place only two months ago, in March in Australia. According to observers, the President Barack Obama administration is pushing for as many such rounds as possible before the end of the year, in an attempt to bull through the far-reaching agreement. It is unclear whether that timetable is possible, however, as pushback against the TPP has continued in recent months, from governments and civil society. Over the past week alone, members of the US government have urged Obama to alter certain draft provisions of the agreement, while a US business lobbyist has rued a great "gap between the ambitious vision of our leaders and what is being proposed at the negotiating table". Longstanding criticism also has yet to abate. Much of this comes from the fact that, for most countries, the TPP would not offer many trade benefits - including, most importantly, greater access to US markets. Simultaneously, US negotiators are pushing for significant concessions from potential members. "This is very unusual for a free-trade agreement," said Sean Flynn, director of the Information Justice Program at American Universityhere in Washington. "There is very little 'carrot'" to counteract some of the more strident compromises. Flynn said that Chile, Australia, Singapore and Peru have each expressed public reticence over the current contours of the TPP, given that these countries already have expansive trade agreements with the United States. "This means that Vietnam, Brunei and Malaysia would pay the highest cost." According to what has been seen from the leaked chapter on intellectual property rights, the TPP appears to be pushing a "maximalist", enforcement-focused approach, he said. This directly counters the "development agenda" that has been evolved in institutions such as the United Nations' World Intellectual Property Organization (WIPO), through processes involving significant input by developing countries, outside of the World Trade Organization (WTO). "The US clearly wants to go beyond international standards on intellectual property - beyond WIPO," says Krista Cox, an attorney at Knowledge Ecology International, an NGO here in Washington. For developing countries, some of the most direct impacts of this expansion of punitive powers over intellectual property could be on health issues. While US global health policy has seen significant strengthening over the past five years, passage of the TPP "would start rolling this back", said Peter Maybarduk, director of the Access to Medicines Program at Public Citizen, a consumer advocacy group here. Worldwide over the past 10 years, prices for HIV-related medicines, for instance, have fallen by 99%, largely driven by competition from generic drugs. While the fight against generics by large pharmaceutical interests has largely shifted away from the WTO, Maybarduk suggests, the TPP agreement signals the next iteration of that effort. "The TPP could well be the worst that we have seen," Maybarduk says. "Not only does it run contrary to the US's own pledges on global AIDS work, but the TPP will set the template for the entire Asia-Pacific region. That could have an impact on half of the world's population." (Inter Press Service)

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Fwd: Macroperu Bankia, Ratto, bailout

---------- Forwarded message ----------
From: Dwight Ordoñez <DWIGHTOR@gmail.com>
Date: 2012/5/9
Subject: Macroperu Bankia, Ratto, bailout

 

El gobierno español acaba de intervenir/ "ayudar" con 7,000 millones de euro a la cuarta entidad bancaria de España, Bankia (que es la primera en términos de sus operaciones dentro del país -Santander y BBVA tienen más de 60% de sus operaciones fuera del país).   La burbuja inmobiliaria se llevó de encuentro a la institutión.

Al tiempo de anunciar nuevos recortes en los sistemas de salud y educación, el gobierno de Rajoy usa dinero público para salvar a un banco privado. 

El Presidente de Bankia, el ex-ministro de economía del PP (de Aznar) y ex-director general del FMI, Rodrigo Ratto, acaba de dimitir/ ser mandado a su casa, con un fuerte bono de compensación, luego de este nuevo fracaso (sobre el paso de Ratto por el FMI en el siguiente link: 

http://www.elmundo.es/elmundo/2011/02/09/economia/1297269502.html

En todos los países las causas de la crisis tienen, aparte de razones, rostros y responsables.  Pero en todas partes, éstos últimos son protegidos y "caen de pie" vez tras vez.

Recuerdo cuando en el Perú se felicitaban de la elección de este señor al FMI y se algunos se apiñaban al pie de la escalinata para saludarlo.

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Fwd: Macroperu Los Tres días de Oscuridad

---------- Forwarded message ----------
From: Bruno <lbseminario@yahoo.com>
Date: 2012/5/8
Subject: Macroperu Los Tres días de Oscuridad

 

Global Economy Heading Downhill?

Author: Edward Hugh  ·  May 8th, 2012  ·  Comments (2)Share This Print  151  83

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According to the JP Morgan Global Composite PMI report, "Growth of global economic activity eased sharply to a five month low in April." The authors of the report found that on aggregate across the countries surveyed – 30 across the globe – both new order inflows and job creation fell back, leading them to the conclusion  that "the world economy is set for a softer growth patch heading into midyear". Looking at the chart below, this certainly seems to be the case (the composite index is a measure derived from a weighted average of the manufacturing and services findings).

So momentum is weakening across the entire global economy at the present point, not just in say Europe, or China. Global output is still growing but it is growing at an increasingly weaker pace. What could change that? Well QE3 naturally. Why do I say that?  Well look at the three significant surges in the chart. The first coincides with QE1, the second with QE2, and the third, much weaker one, fits in with the so called Operation Twist.

This tells us a number of things. In the first place these massive liquidity injections are not self sustaining, i.e. they give things a hefty push forward but even so they  don't manage to jump start the various economies, especially in the developed world. They work for a bit, and then run out of steam. The fact that they systematically run out of steam tells me, at any rate, that something somewhere is broken, and that re-iterated injections on their own won't sort the problem out.

In Japan this very same "something" has now been broken since 1992, and continual liquidity injections and mounting government debt have not made it better. This is not the point to go in depth into what the something is, my story on this is scattered here and there across the various pieces of analysis I write. Suffice it to say that excessive debt and rapid population aging have to form part of the picture. Both constitute an important drag on growth. But the principal aim of this post  isn't to add to the debate about what it is that is broken, it is simply to plead for a recognition that something is, and that, as a result, the situation won't simply "right" itself. This time there is no hidden helping hand.

What the various liquidity injections do do is buy time. Some people scorn that, and would rather take their armageddon full face and now. Each to his taste. If I get to die tomorrow rather than today, I am not ungrateful.

Liquidity injections are not quite the same thing as debt generation, although obviously there is a link – injections which involve straight monetisation of government debt (ECB LTRO lending against government guaranteed bank bond collateral in order to enable the bank to buy government bonds, for example) are clearly facilitating the generation of debt. While liquidity provision for its own sake in a deflated economic system is generally positive, debt generation for its own sake isn't necessarily so, since someone, someday, will have to pay it back, and if in the meantime we don't fix the problem (that "something" that is broken) then the somebody may be poorer than we are, in which case we are directly transferring income inter-generationally, from them to us. Debt to buy time for something which won't fix itself is not justified, and the money should be spent structurally, on implementing a fix. Grandiose infrastructure plans which have no real efficiency component were tried in Japan in the 1990s, and they didn't work.

"Even today, Japan is having trouble climbing out of its cement pit. At its high, in the mid-1990s, infrastructure spending accounted for 6 percent of its gross domestic product, double what the United States allocated for infrastructure in the '90s and still higher than what politicians are considering spending today. In estimates of national debt, the world's second-largest national economy is near the top of the list, perched between Lebanon and Jamaica. Last year, Japan's public debt was far greater than the size of its economy, a burden that makes its demographic challenges more difficult to address".

We face a situation which seems neither to have been contemplated in either the Austrian or the Keynesian theoretical frameworks (since both assume some sort of homeostatic corrective mechanism is ultimately at work) or in the any of the various versions of neoclassical growth theory, where some sort of semi-constant equilibrium growth path is assumed to exist, and be recoverable via the application of an appropriate set of structural reforms. Yet the three oldest societies on the planet – Japan, Germany and Italy – have been losing growth momentum for decades now, and it is quite possible will drift into negative average growth rates at some point in a non too distant future. Traditional theory never really contemplated this possibility (for a brief summary of my argument on this, see this recent interview I did with Andrew Pollen).

Now for my second main point. Where's the missing link? That is, where is the link between the Feds quantitative measures (or those of the other main developed economy central banks for that matter) and global economic momentum? Well, that's a bit of a longer story – although empirically I think it is easy to see the link is there. Basically the story has to do with international "carry" (borrowing cheap in one currency to lend dear in another, preferably with the value of the first currency falling, and the value of the second currency rising, a set of relations which "carry" itself propagates in good circular fashion), and risk sentiment. The liquidity injection makes people more willing to take on risk (think ECB and the 3yr LTROs), and the existence of the carry trade enables them to do it. Nothing new here, banks by their very nature are about intermediation, and leveraging spreads, its just that in an age of financial globalisation that intermediation has a lot more distant geographical reach.

And then of course, all that extra money helps people from Rio to New Delhi and from Ankara to Jakarta borrow up to the hilt to buy themselves a nice new flat, or SUV, or whatever.

Across Latin America's largest economy, record prices for the country's commodities and surging foreign fund inflows – what the International Monetary Fund calls "favourable tailwinds" – are driving a historic boom. Property prices are soaring, consumer credit is booming and bank profits swelling. But there are growing concerns over whether Brazil is becoming addicted to this windfall of easy money. Increasingly, there are fears that Brazil is heading for a bubble.

So excess liquidity which finds no outlet in developed economies floods into emerging markets, provoking unsustainable surges in demand and fueling inflation, which leads the local central banks to penalise borrowing in one way or another, and bring the whole dynamic to a halt again. At which point we get another liquidity injection in one of the major developed economies, and off we go again.

It is perhaps a sobering thought  that households will be about as indebted in Brazil coming in to the next football World Cup as they were in Spain at the time of the 1992 Olympics, and then remember what happened next in the latter case. Brazil isn't facing a devastating bubble yet, but it could be one day if we don't find a better way of doing things.

Global Manufacturing In LimboLand

Even if it was services activity, rather than manufacturing, that showed the greatest global weakness during April, manufacturing was only able to gouge out a minimal improvement on what was already a weak March performance, and even then what growth there was was  very unevenly distributed.

Overall output, new orders and employment all continued to rise during the month, but there was a marked divergence between the world's two largest industrial regions, the US and the Eurozone. In fact, the US remained one of the principal spurs of global manufacturing growth in April, with the US PMI rising to a ten-month high, provoking indirectly yet more debate about the desirability of austerity across the EU. Nonetheless, as can be seen from the chart, the surge in manufacturing output remains modest when compared with the two earlier waves, which is why I am among those who think that the arrival of some sort of QE3 is now only a matter of time.

The Eurozone manufacturing PMI, in contrast, posted its lowest reading in almost three years, as operating conditions deteriorated across all of the  big-four Euro economies (Germany, France, Italy, and Spain). The US PMI is currently 8.9 points above its Eurozone equivalent, the greatest divergence in favour of the US since Eurozone data were first compiled in June 1997.

Meanwhile the Asia PMIs remained mixed with solid growth being signaled in India against only modest expansions in Japan, Indonesia, Taiwan and South Korea. Conditions also remained weak to subdued in China. So at this point in time, even the Asian economies as a group are hardly "powering ahead".

The most marked feature of the April reports as far as Europe is concerned is certainly the way in which conditions in core Europe continue to worsen. As the monthly report said,"the April PMIs also indicated that manufacturing weakness was no longer confined to the region's geographic periphery. The German PMI fell to a 33-month low, conditions deteriorated sharply again in France and the Netherlands also contracted at a faster rate". The rate of decline in new orders accelerated, and jobs were lost in German manufacturing for the first time in two years.

Indeed it is the state of the once mighty German economy that is now starting to give cause for concern. The economy suffered a mild contraction in the last three months of last year, and the possibility exists that this will be repeated in Q1 2012, in which case Germany will also be technically back in recession. Whether or not this is the case we will know in a week or so, but either way, the fact that it is a close call, and that things are evidently getting worse as we enter the second quarter certainly undermines some of the force in Angela Merkel's argument that austerity leads to growth.

As Tim Moore, senior economist at Markit and author of the German manufacturing report put it:

"Germany started the second quarter of 2012 with its worst manufacturing performance for almost three years, as another month of weaker order inflows finally brought production levels back into contraction. With backlogs of work failing to support output volumes in April, manufacturers cut their staffing numbers for the first time since March 2010.

"The investment goods sector was at the forefront of the downturn in April, as jitters about global economic conditions meant clients in export markets sought to delay large scale spending decisions. Investment goods producers saw export orders fall at the steepest pace in nearly three years, and in turn job losses were the most pronounced of the three main market groups monitored by the survey.

Germany's economy is export dependent. This export dependency comes from having a very high median population age. It is not a cultural quirk of the Germans. There is no fundamental issue with German competitiveness, there is not some major structural reform that is missing, there is not even over indebtedness in the public or private sectors. The only reason the German economy has fallen back into recession is that demand for its products among customers has dropped off, while the long awaited second pillar of domestic demand has once more failed to appear. It is as simple as that.

With the results of the recent French elections in the forefront of their minds, people are now starting to ask themselves just how Germany will respond to a Francois Hollande Presidency, forgetting that elections are also looming in Germany next year, and that the CDU is busily loosing ground. Whether or not Germany technically confirms a recession when the results for the first three months of the year are out in a week or so, the performance of the economy is visibly worsening and German leaders are under pressure to show they are willing and able to respond. Otherwise Angela Merkel may face wrath not only from those irritated by the having to contribute towards the bailouts, she will also have to contend with  those irritated by her economic ineffectiveness back home. And in any event, the party which would gain from a Merkel electoral defeat – the SPD – are not that far from seeing things the way Monsieur Hollande does.

Which is why Angela Merkel's approach was always far too simplistic. As I have said a number of times, I think she is right to search for some sort of financial stability in the face of the aging population issue, but the best way to get from here to there is not necessarily to walk in a straight line.  Naturally, austerity is a relative concept, but whether you are cutting your deficit from 10% to 9%, or from 3% to 2% as you go into a recession you still hit short term growth with a double whammy, as Italy is currently discovering. As can be seen in the chart below (which is the April Italian services PMI) domestic demand is plummeting on the back of the latest round of austerity, and this is leading the main centre left party in the government to at least cry ouch!

At the very least European fiscal policy needs to allow for a counter cyclical component, even as you pull back from a very high deficit level, and not, as at present, insist on an entirely pro-cyclical one in a recessionary environment, thus magnifying the amplitude of the demand swings. If an economy needs more than 5% deficit (or more than 10% for that matter) simply to get meaningful GDP growth, then you need to understand why this is and find solutions, since as I say above debt itself doesn't cure anything, and arguably as our populations age accumulated debt only makes things worse. But if one of the engines on the plane starts to malfunction, the objective needs to be to get the passengers to the ground safely, and not necessarily by the most direct route.

Naturally infrastructure work on the periphery which needed German technology would help German export companies, so it wouldn't be that hard to sell in the heimat. But what use would it be to the receiving countries? That we won't know until we see the proposals in detail, and discover how it is going to be financed. If such infrastructure would help exports, both within and outside Europe, then it could be a plus. If it is only to build high speed train networks that lead to nowhere (or as is currently under discussion in Spain up to a frontier with Portugal across which there will be no connection waiting on the other side) then we are simply falling into the Japan trap, and applying a simplistic 1930s version of Keynesianism that doesn't work in the present context. But at the end of the day, the fact we are having this debate in the first place only serves to highlight the fact that we still don't have a roadmap for coming out of the crisis in Europe, and we still don't know what our future is going to look like.

And meanwhile, of course, there is Greece, and that blasted ongoing economic contraction to think about.

As Paul Smith, Senior Economist at Markit and author of the Greece Manufacturing PMI report commented:

"April proved to be another difficult month for Greek manufacturers, with latest data again showing steep contractions across a number of key variables measured by the survey. "In line with recent reports, the issues facing manufacturers – and the Greek economy as a whole – remain deep rooted. Panelists again noted problems in accessing working capital and a culture of cash payments, implying that credit lines remain either closed or that agreements will come with restrictive terms.

"At present, it remains hard to see how these issues can be solved suggesting that the manufacturing sector is set for continued struggle in the months ahead."

Following his cue, and looking over at the latest election results in that unfortunate country, it remains hard to see how the issues arising can be solved, and it isn't clear what is going to happen next.

Filed under: Economic Growth, Euro, European Periphery, Japan

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Fwd: Macroperu Grecia: Nurvas elecciones en el futuro

---------- Forwarded message ----------
From: Bruno <lbseminario@yahoo.com>
Date: 2012/5/9
Subject: Macroperu Grecia: Nurvas elecciones en el futuro

 

Piden a una izquierda antiajuste que forme gobierno en Grecia

POR IDAFE MARTÍN

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Es poco probabel que los partidos mayoritarios griegos puedan formar un gobierno en Gracia, de modo que nuvas elecciones son inevitables. Es probable , sin embargo, que las mismas hagan desaparecer a los partidos tradicionales con lo que el colpaso de la inetegracion con respecto a la UE sera inevitable. En las actuales circunstancias, es probable que el costo de permancer en la UE sea mayor a los beneficios. Conforma aavnce la crisisi y se persita en las actuales polemicas, se coeste alace se hara evidente. Pero, que puede ocurri en el Mundo si se disuelve la UE: Una catastrofe como esa podria ser similar a la que provoco la quiebra del mayor banco de austria en 1932. 

Tras el fracaso de los partidos tradicionales, el presidente encargó a la alianza Syriza que busque socios. Ellos quieren una moratoria de la deuda y no seguir los recortes que impone la UE. Será difícil que sume aliados y habría nuevos comicios.

• IMÁGENES

Desafío. El líder de Syriza, Alexis Tsipras (c), sale ayer con colaboradores del palacio presidencial de Atenas, tras recibir el encargo de formar gobierno..

BRUSELAS. ESPECIAL PARA CLARIN - 09/05/12

El debate sobre el ajuste en Europa quedó ayer en carne viva: una alianza de izquierda griega, que intenta formar gobierno tras el fracaso de los partidos tradicionales, advirtió que, si llega al poder, su país ya no se sentirá obligado aaplicar las medidas de ajuste exigidas por el FMI y Bruselas.

Alexis Tsipras, un ingeniero de 38 años y líder de la alianza antiajuste Syriza que fue una de las revelaciones de los comicios del domingo, pidió también una moratoria sobre una parte de la deuda, una iniciativa que hizo ayer temblar la Bolsa de Atenas.

"Los partidos pro rescate ya no tienen una mayoría en el Parlamento para votar medidas destructivas para el pueblo griego", dijo Tsipras, cuya alianza salió segunda tras el partido Nueva Democracia (conservador) y adelante de los socialistas del Pasok.

Igualmente, sería casi un milagro que la izquierda (que sacó un 16.8% de los votos) consiga formar gobierno. Así, l os griegos volverían a las urnas dentro de un mes en un ambiente catastrófico, con las fuerzas tradicionales hundidas y los extremistas de izquierda y derecha en ascenso.

Los resultados electorales de las legislativas del pasado domingo dieron un parlamento totalmente fragmentado. Vencieron los conservadores de Nueva Democracia, pero ni sumando a los socialistas del Pasok podrán gobernar.

El resto del arco político rechaza la coalición porque están en contra de los ajustes, de los rescates negociados con la Unión Europea y el FMI y porque piden directamente que se deje de pagar la deuda.

La subida de los extremos es brutal. Syriza, un partido muy a la izquierda de los socialistas, fue la segunda fuerza más votada y en el parlamento entraron por primera vez los neonazis de Aurora Dorada. El resto de la cámara lo forman otro partido de extrema derecha, uno de nacionalistas populistas y dos partidos comunistas peleados entre sí.

El escenario es dantesco. La Bolsa griega cae con fuerza desde el lunes y los bancos han perdido en dos días más del 20% de su valor bursátil. Unos nuevos comicios darían, según los sondeos, un refuerzo a los extremos y provocarían que los partidos centrales se hundieran aún más.

Grecia está de rodillas. Según los datos de la Comisión Europea, el PBI griego es apenas el 2% de la Eurozona, pero el enfermo está haciendo temblar al bloque. Atenas ha perdido en cuatro años el 20% de su PBI, el desempleo subió hasta cerca del 22%, la deuda pública, que llegó al 165%, está por encima del 120% después de que Atenas hiciera una quita de 106.000 millones de euros y el déficit público rondará a finales de este año el 9%. Sus socios europeos ya le han tirado dos salvavidas –que parecen cargados de piedras–, uno por 110.000 millones de euros en mayo de 2010 y otro por 130.000 millones en febrero pasado.

Pero nada funciona. El último dato, conocido esta semana, habla de un país que se encamina a las listas del tercermundismo: uno de cada 11 griegos se alimenta en comedores sociales.

Alemania no afloja la soga del cuello griego. Berlín dijo ayer que espera la formación de un gobierno "responsable" en Atenas "que siga aplicando las reformas" prometidas. Por reformas Berlín entiende más ajustes. Si no, Europa cortaría el grifo de la ayuda.

Los partidos que suman más del 60% de los votos piden que se deje de cumplir con el servicio de la deuda. Si lo hicieran, Grecia, gracias a las brutales rebajas de salarios públicos y pensiones, ya tendría superávit fiscal, por lo que podría seguir pagando salarios y mantener la administración pública funcionando.

La prueba del hartazgo de los griegos es la entrada en el Parlamento, con el 7% de los votos y 21 diputados, del partido Aurora Dorada, una banda de neonazis, que usan un símbolo casi idéntico a la esvástica nazi. Hablan de una supuesta superioridad racial helena, exigen que se expulse a todos los inmigrantes y se minen las fronteras y obligan a los periodistas a levantarse para aplaudir cuando su líder llega a una conferencia de prensa.

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Global Economy Heading Downhill?

Global Economy Heading Downhill?
Author: Edward Hugh · May 8th, 2012 · Comments (2)
Share This Print 151 83
According to the JP Morgan Global Composite PMI report, "Growth of global economic activity eased sharply to a five month low in April." The authors of the report found that on aggregate across the countries surveyed – 30 across the globe – both new order inflows and job creation fell back, leading them to the conclusion that "the world economy is set for a softer growth patch heading into midyear". Looking at the chart below, this certainly seems to be the case (the composite index is a measure derived from a weighted average of the manufacturing and services findings).

So momentum is weakening across the entire global economy at the present point, not just in say Europe, or China. Global output is still growing but it is growing at an increasingly weaker pace. What could change that? Well QE3 naturally. Why do I say that? Well look at the three significant surges in the chart. The first coincides with QE1, the second with QE2, and the third, much weaker one, fits in with the so called Operation Twist.

This tells us a number of things. In the first place these massive liquidity injections are not self sustaining, i.e. they give things a hefty push forward but even so they don't manage to jump start the various economies, especially in the developed world. They work for a bit, and then run out of steam. The fact that they systematically run out of steam tells me, at any rate, that something somewhere is broken, and that re-iterated injections on their own won't sort the problem out.

In Japan this very same "something" has now been broken since 1992, and continual liquidity injections and mounting government debt have not made it better. This is not the point to go in depth into what the something is, my story on this is scattered here and there across the various pieces of analysis I write. Suffice it to say that excessive debt and rapid population aging have to form part of the picture. Both constitute an important drag on growth. But the principal aim of this post isn't to add to the debate about what it is that is broken, it is simply to plead for a recognition that something is, and that, as a result, the situation won't simply "right" itself. This time there is no hidden helping hand.

What the various liquidity injections do do is buy time. Some people scorn that, and would rather take their armageddon full face and now. Each to his taste. If I get to die tomorrow rather than today, I am not ungrateful.

Liquidity injections are not quite the same thing as debt generation, although obviously there is a link – injections which involve straight monetisation of government debt (ECB LTRO lending against government guaranteed bank bond collateral in order to enable the bank to buy government bonds, for example) are clearly facilitating the generation of debt. While liquidity provision for its own sake in a deflated economic system is generally positive, debt generation for its own sake isn't necessarily so, since someone, someday, will have to pay it back, and if in the meantime we don't fix the problem (that "something" that is broken) then the somebody may be poorer than we are, in which case we are directly transferring income inter-generationally, from them to us. Debt to buy time for something which won't fix itself is not justified, and the money should be spent structurally, on implementing a fix. Grandiose infrastructure plans which have no real efficiency component were tried in Japan in the 1990s, and they didn't work.

"Even today, Japan is having trouble climbing out of its cement pit. At its high, in the mid-1990s, infrastructure spending accounted for 6 percent of its gross domestic product, double what the United States allocated for infrastructure in the '90s and still higher than what politicians are considering spending today. In estimates of national debt, the world's second-largest national economy is near the top of the list, perched between Lebanon and Jamaica. Last year, Japan's public debt was far greater than the size of its economy, a burden that makes its demographic challenges more difficult to address".

We face a situation which seems neither to have been contemplated in either the Austrian or the Keynesian theoretical frameworks (since both assume some sort of homeostatic corrective mechanism is ultimately at work) or in the any of the various versions of neoclassical growth theory, where some sort of semi-constant equilibrium growth path is assumed to exist, and be recoverable via the application of an appropriate set of structural reforms. Yet the three oldest societies on the planet – Japan, Germany and Italy – have been losing growth momentum for decades now, and it is quite possible will drift into negative average growth rates at some point in a non too distant future. Traditional theory never really contemplated this possibility (for a brief summary of my argument on this, see this recent interview I did with Andrew Pollen).

Now for my second main point. Where's the missing link? That is, where is the link between the Feds quantitative measures (or those of the other main developed economy central banks for that matter) and global economic momentum? Well, that's a bit of a longer story – although empirically I think it is easy to see the link is there. Basically the story has to do with international "carry" (borrowing cheap in one currency to lend dear in another, preferably with the value of the first currency falling, and the value of the second currency rising, a set of relations which "carry" itself propagates in good circular fashion), and risk sentiment. The liquidity injection makes people more willing to take on risk (think ECB and the 3yr LTROs), and the existence of the carry trade enables them to do it. Nothing new here, banks by their very nature are about intermediation, and leveraging spreads, its just that in an age of financial globalisation that intermediation has a lot more distant geographical reach.

And then of course, all that extra money helps people from Rio to New Delhi and from Ankara to Jakarta borrow up to the hilt to buy themselves a nice new flat, or SUV, or whatever.

Across Latin America's largest economy, record prices for the country's commodities and surging foreign fund inflows – what the International Monetary Fund calls "favourable tailwinds" – are driving a historic boom. Property prices are soaring, consumer credit is booming and bank profits swelling. But there are growing concerns over whether Brazil is becoming addicted to this windfall of easy money. Increasingly, there are fears that Brazil is heading for a bubble.

So excess liquidity which finds no outlet in developed economies floods into emerging markets, provoking unsustainable surges in demand and fueling inflation, which leads the local central banks to penalise borrowing in one way or another, and bring the whole dynamic to a halt again. At which point we get another liquidity injection in one of the major developed economies, and off we go again.

It is perhaps a sobering thought that households will be about as indebted in Brazil coming in to the next football World Cup as they were in Spain at the time of the 1992 Olympics, and then remember what happened next in the latter case. Brazil isn't facing a devastating bubble yet, but it could be one day if we don't find a better way of doing things.

Global Manufacturing In LimboLand

Even if it was services activity, rather than manufacturing, that showed the greatest global weakness during April, manufacturing was only able to gouge out a minimal improvement on what was already a weak March performance, and even then what growth there was was very unevenly distributed.

Overall output, new orders and employment all continued to rise during the month, but there was a marked divergence between the world's two largest industrial regions, the US and the Eurozone. In fact, the US remained one of the principal spurs of global manufacturing growth in April, with the US PMI rising to a ten-month high, provoking indirectly yet more debate about the desirability of austerity across the EU. Nonetheless, as can be seen from the chart, the surge in manufacturing output remains modest when compared with the two earlier waves, which is why I am among those who think that the arrival of some sort of QE3 is now only a matter of time.

The Eurozone manufacturing PMI, in contrast, posted its lowest reading in almost three years, as operating conditions deteriorated across all of the big-four Euro economies (Germany, France, Italy, and Spain). The US PMI is currently 8.9 points above its Eurozone equivalent, the greatest divergence in favour of the US since Eurozone data were first compiled in June 1997.

Meanwhile the Asia PMIs remained mixed with solid growth being signaled in India against only modest expansions in Japan, Indonesia, Taiwan and South Korea. Conditions also remained weak to subdued in China. So at this point in time, even the Asian economies as a group are hardly "powering ahead".

The most marked feature of the April reports as far as Europe is concerned is certainly the way in which conditions in core Europe continue to worsen. As the monthly report said,"the April PMIs also indicated that manufacturing weakness was no longer confined to the region's geographic periphery. The German PMI fell to a 33-month low, conditions deteriorated sharply again in France and the Netherlands also contracted at a faster rate". The rate of decline in new orders accelerated, and jobs were lost in German manufacturing for the first time in two years.

Indeed it is the state of the once mighty German economy that is now starting to give cause for concern. The economy suffered a mild contraction in the last three months of last year, and the possibility exists that this will be repeated in Q1 2012, in which case Germany will also be technically back in recession. Whether or not this is the case we will know in a week or so, but either way, the fact that it is a close call, and that things are evidently getting worse as we enter the second quarter certainly undermines some of the force in Angela Merkel's argument that austerity leads to growth.

As Tim Moore, senior economist at Markit and author of the German manufacturing report put it:

"Germany started the second quarter of 2012 with its worst manufacturing performance for almost three years, as another month of weaker order inflows finally brought production levels back into contraction. With backlogs of work failing to support output volumes in April, manufacturers cut their staffing numbers for the first time since March 2010.

"The investment goods sector was at the forefront of the downturn in April, as jitters about global economic conditions meant clients in export markets sought to delay large scale spending decisions. Investment goods producers saw export orders fall at the steepest pace in nearly three years, and in turn job losses were the most pronounced of the three main market groups monitored by the survey.

Germany's economy is export dependent. This export dependency comes from having a very high median population age. It is not a cultural quirk of the Germans. There is no fundamental issue with German competitiveness, there is not some major structural reform that is missing, there is not even over indebtedness in the public or private sectors. The only reason the German economy has fallen back into recession is that demand for its products among customers has dropped off, while the long awaited second pillar of domestic demand has once more failed to appear. It is as simple as that.

With the results of the recent French elections in the forefront of their minds, people are now starting to ask themselves just how Germany will respond to a Francois Hollande Presidency, forgetting that elections are also looming in Germany next year, and that the CDU is busily loosing ground. Whether or not Germany technically confirms a recession when the results for the first three months of the year are out in a week or so, the performance of the economy is visibly worsening and German leaders are under pressure to show they are willing and able to respond. Otherwise Angela Merkel may face wrath not only from those irritated by the having to contribute towards the bailouts, she will also have to contend with those irritated by her economic ineffectiveness back home. And in any event, the party which would gain from a Merkel electoral defeat – the SPD – are not that far from seeing things the way Monsieur Hollande does.

Which is why Angela Merkel's approach was always far too simplistic. As I have said a number of times, I think she is right to search for some sort of financial stability in the face of the aging population issue, but the best way to get from here to there is not necessarily to walk in a straight line. Naturally, austerity is a relative concept, but whether you are cutting your deficit from 10% to 9%, or from 3% to 2% as you go into a recession you still hit short term growth with a double whammy, as Italy is currently discovering. As can be seen in the chart below (which is the April Italian services PMI) domestic demand is plummeting on the back of the latest round of austerity, and this is leading the main centre left party in the government to at least cry ouch!

At the very least European fiscal policy needs to allow for a counter cyclical component, even as you pull back from a very high deficit level, and not, as at present, insist on an entirely pro-cyclical one in a recessionary environment, thus magnifying the amplitude of the demand swings. If an economy needs more than 5% deficit (or more than 10% for that matter) simply to get meaningful GDP growth, then you need to understand why this is and find solutions, since as I say above debt itself doesn't cure anything, and arguably as our populations age accumulated debt only makes things worse. But if one of the engines on the plane starts to malfunction, the objective needs to be to get the passengers to the ground safely, and not necessarily by the most direct route.

Naturally infrastructure work on the periphery which needed German technology would help German export companies, so it wouldn't be that hard to sell in the heimat. But what use would it be to the receiving countries? That we won't know until we see the proposals in detail, and discover how it is going to be financed. If such infrastructure would help exports, both within and outside Europe, then it could be a plus. If it is only to build high speed train networks that lead to nowhere (or as is currently under discussion in Spain up to a frontier with Portugal across which there will be no connection waiting on the other side) then we are simply falling into the Japan trap, and applying a simplistic 1930s version of Keynesianism that doesn't work in the present context. But at the end of the day, the fact we are having this debate in the first place only serves to highlight the fact that we still don't have a roadmap for coming out of the crisis in Europe, and we still don't know what our future is going to look like.

And meanwhile, of course, there is Greece, and that blasted ongoing economic contraction to think about.

As Paul Smith, Senior Economist at Markit and author of the Greece Manufacturing PMI report commented:

"April proved to be another difficult month for Greek manufacturers, with latest data again showing steep contractions across a number of key variables measured by the survey. "In line with recent reports, the issues facing manufacturers – and the Greek economy as a whole – remain deep rooted. Panelists again noted problems in accessing working capital and a culture of cash payments, implying that credit lines remain either closed or that agreements will come with restrictive terms.

"At present, it remains hard to see how these issues can be solved suggesting that the manufacturing sector is set for continued struggle in the months ahead."

Following his cue, and looking over at the latest election results in that unfortunate country, it remains hard to see how the issues arising can be solved, and it isn't clear what is going to happen next.

Filed under: Economic Growth, Euro, European Periphery, Japan

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Fwd: Macroperu Flujos de Inversión Directa extranjera en LA

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From: Bruno <lbseminario@yahoo.com>
Date: 2012/6/18
Subject: Macroperu Flujos de Inversión Directa extranjera en LA

 

Según la CEPAL, el año pasado la ineversión directa extranjera ascendió a 150,000 millones de dólares. 3/4 parte de esta se concentró en México y Brasil. La suma restante en CentroAmerica y el resto de America del Sur. Mientras que el destino en el primero grupo fue la manufactura y el sector servicios, en el segundo este lugar fue ocupado por los recursos naturales. El flujo destinado a inevestigacion en desarrollo totaliz{o casi cinco por ciento del total.

¿Por q}e Brasil reciben un flujo de ineversi{on que excede a su partiación en el PBI? Probablemnte porque las multinacionales pinesan usr estos paises como plataformas exportadoras hacia otros paises como plataforma exportadora a otros paises de al region: son las dos unicas economias de la region con un aparto industrial digno de consideraci}on. La manufactura en Sudamerica se reduce al procesamineto de alimentos, produccion de materiales de construccion , y procesamiento de materias primas, es dcir, a sectores donde la investigaci{on y desarrollo no tiene la mayor importancia . En estos sectores la investigacion y el desarrollo tine escasa relevancia pues los productos no ambia de forma. Despues de todo, uno no necesita cambiar la forma de las gaseoasas, loslos platos, o los ladrillos de las casas . El valor agregado directo de estos productos es 30 por ciento del costo total. Tambien es reducido el ipacto del mismo sobre estos sectores de la econom{ia.

Es posible, por ejemplo, que un dolara de textil exportado genra menos valor garegado que un dolara de harian de pescad y probablemnte igual cantidad de empleo. La exportacion de textiles con algodon importado corta la conexi{on del sector con la agricltura y hace desaprecer casi todo el impacto indirecto del sector. El mismo fecto reduce el valor agregado generado en el sector.

Foreign Direct Investment in Latin America Hit Record Highs in 2011
Author: Shannon Oneil · June 18th, 2012 · Comments (0)
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Last year foreign direct investment (FDI) in Latin America continued its surge, topping $150 billion, an all time high for the region. According to the Economic Commission for Latin America and the Caribbean's report "Foreign Direct Investment in Latin America and the Caribbean," the inflows climbed 31 percent—the most of any region and three times Asia's growth rate—and now represent just over 10 percent of total global investment (breaking into the double digits for the first time as well).

While nearly all countries gained, the largest recipient, unsurprisingly, was Brazil. There, investments rose by 37 percent, and in a change from the past, flowed mostly into the manufacturing and service sectors (the largest single investment coming from the German conglomerate ThyssenKrupp's construction of a $7 billion steel exporting plant). Inflows to Mexico and Central America were also led by manufacturing and services (including tourism, banking, and the automotive sectors). Only in South America (excluding Brazil), did most of the investment remain in commodities and natural resources.

Despite tough times at home, Europe led with some $35 billion in investment. Anecdotes suggest that the profitability of Latin American subsidiaries and operations have helped keep some European companies afloat (for instance the Spanish banks Santander and BBVA). Following in total inflows was the United States, and, if taken in the aggregate, other Latin American states (which invested nearly $23 billion). Interestingly, these countries, Japan, and Canada all outpaced China's involvement.

The report also touches on the quality of FDI flows, and its potential to transform Latin America's economies for the better through job creation, technology transfers, capacity building, and the like. Here the story is better than in the past, but still cautionary. More investment (now over one-third) went into what can be considered medium-high tech sectors, such as chemicals, autos, and machinery. Most of this uptick occurred in Latin America's largest economies, Brazil and Mexico. The study also shows that investment in high end technology and research and development remains small (less than 5 percent) and concentrated in Brazil.

Foreign direct investment is a useful gauge of investor confidence and, indirectly, potential economic growth. Here Latin America's decade of macroeconomic stability, natural resource endowments, and expanding domestic markets (due to a growing regional middle class) have drawn increased attention and dollars. The challenge for the region is to funnel the growing investment to benefit its citizens alongside these international companies and investors, creating jobs, enhancing learning, and increasing productivity in ways that will let Latin America compete globally in the long term.

Published in conjunction with Latin America's Moment at the Council on Foreign Relations.

This post originally appeared at LatIntelligence and is posted with permissio

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Fwd: Oil-price.net - Oil Price, Today and Tomorrow

Oil-price.net - Oil Price, Today and Tomorrow

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Why Is Gas Price Remaining High When Oil Price Is Going Down? Posted: Logic would seem to dictate that if oil prices are going down, the price of gasoline should follow suit and go down also. However the opposite has been observed lately. Of course as is the case in any fluctuation of oil prices, there is a range of reasons responsible for this. So why exactly is the price of oil dropping whilst the price of [...].

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Fwd: Chart Focus: Mapping globalization

Chart Focus Newsletter December 2011 View on the Web: http://www.mckinseyquarterly.com/newsletters/chartfocus/2011_12.htm Share Mapping globalization No more than 25 percent of economic activity is truly global, yet visions of a borderless planet entrance many senior executives. To grasp the realities of a world where distance and differences still matter, they should develop "rooted" maps, which correct the misimpression that a viewer's vantage point doesn't influence the way things look. The starting point for rooted maps is to create a reference map depicting your industry environment, but not your own company's or country's place in it. An executive at a film studio, for example, might develop a map in which the size of countries reflects their total box office revenues and the color depicts the market share of domestic movies. By comparing the reference map with rooted maps, executives can identify the impact of borders, distances, and differences. Read "Remapping your strategic mind-set" (August 2011) to see rooted maps depicting the worldwide revenues of US versus Indian films, the exposure of German and US banks to problematic European loans, and the provenance of the oil supplies of China, Europe, and the United States. Also of Interest April 2011 Drawing a new road map for growth New findings reveal how large and small companies grow—and the startling performance of players in emerging markets. July 2010 Applying global trends: A look at China's auto industry Strategists can challenge conventional wisdom and prepare for uncertainty by analyzing the complex interaction of global trends in their industries. June 2010 Global forces: An introduction Five crucibles of change will restructure the world economy for the foreseeable future. Companies that understand them will stand the best chance of shaping it. [includes video] March 2008 Dissecting global trends: An example from Italy Executives should examine the impact of trends on subindustries, segments, categories, and micromarkets before placing their bets.

Did you miss last month's Chart Focus? How high unemployment lingers Increasingly long periods of high unemployment followed the US recessions of the last two decades. Until the 1980s, employment rebounded about six months after GDP. But in the wake of the 1990–91 and 2001 recessions, it recovered 15 and 39 months, respectively, after GDP had returned to the prerecession peak. At recent rates of job creation, the lag this time will be more than 60 months. You are receiving this e-mail because you are a registered member of mckinseyquarterly.com and have subscribed to the Economic Studies list. To ensure delivery, add e.mckinseyquarterly.com to your address book. McKinsey & Company, 21 South Clark Street, Chicago, Illinois 60603 Manage your subscriptions Unsubscribe from this mailing Access our help tool Read privacy policy

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sobre crisis financiera global
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El Perú supera a UK en el ranking crediticio

¿Les provoca sorpresa esta curiosa nota periodística que apareció el día de hoy en el Telegrafo de Londres y que ilustra bastante bien cuan absurdos pueden ser los ranking crediticios? ¿Britain ranks below Peru in new `sovereign risk' world order

By Ian Cowie Your Money Last updated: November 7th, 2011

13 Comments Comment on this article

Peru: not as risky as Britain

Britain ranks below Peru in a new analysis by one of the world's biggest fund managers of the risk to investors who buy government bonds. Norway, Sweden and Switzerland are the least risky bond issuers among 44 countries analysed in the BlackRock Sovereign Risk Index. At the other end of the scale, also in descending order, Egypt, Portugal and Greece are reckoned to be the most risky.

Britain falls near the middle of this new world order, ranking directly below Russia, China, Czech Republic, Israel and Peru. Some small comfort may be taken from the fact that gilts issued by the British Government are reckoned to be a better bet than bonds issued by France, the Philipines and Poland; which rank directly below Britain.

Dissatisfaction with credit rating agencies such as Standard & Poor's,Fitch and Moody's – which have issued nearly 100 sovereign risk downgrades since the global credit crisis began – prompted BlackRockto begin collating its own analysts' views earlier this year. It claims back-testing of this analysis suggests it is more accurate than the credit rating agencies' and that the current crisis will continue with more government's getting into trouble with excess debt.

Benjamin Brodsky, managing director of fixed interest at BlackRock said: "Our initial analysis was judgmentally based, and contemporaneously validated by a high correlation with sovereign credit default swap (CDS) market spreads. Over recent months we have constructed the back history of this approach running from, taking care to use `real-time' data.

"In this quarterly update for the index, we complement our earlier analysis, showing how the BlackRock Sovereign Risk Index (BSRI) has outperformed both ratings agencies and sovereign credit default swap spreads in highlighting downgrade risks.

"Considering heightened activity within the Eurozone periphery in recent years, we present a case study that focuses on Greece, Ireland, Italy, Spain, and Portugal. We show how the BSRI would have led agency activity over the span of these countries, while leading markets in their shift from complacency."

As independent analysis from the Centre for Economics and Business Research suggests Britain might be better off if the eurozone breaks up, Ewen Cameron Watt, managing director of investment strategy at BlackRock, said: "Driven by multiple fundamental insights to the nature of sovereign credit risk, the BSRI presents a useful tool for profiling the strengths and weaknesses of countries against one another.

"Our research suggests these insights can lead rating agency activity, with an excellent track record at preceding downgrades, and historically would have highlighted areas of market complacency.

"As a backdrop for the future, we believe the multi-decade compilation of sovereign and banking crises by Reinhart and Rogoff presents a compelling case that in recent years financial markets have been complacent about risks that have always been present and, as more countries approach their upper limits of sustainable leverage, a return to a higher incidence of crises seems likely."

A fundamental shift of economic wealth from West to East is underway and relative valuations of international bonds reflect that transition. Mark Dampier of wealth managers Hargreaves Lansdown put it most succinctly: "The emerging markets have the savings; the developed world has the debt. Sooner or later, prices will reflect those facts."

forecast europe 2011

http://www.bloomberg.com/news/2011-11-10/recession-risk-grows-for-euro-region-as-commission-reduces-2012-forecast.html