April 2008 Archives

I am famous! Well actually, not quite. However, one of the photos I took of the Eiffel Tower during a September 2006 trip to Paris has been published in the Schmap France Guide. You can view the photo in all it's glory here!

EU Internal Market Commissioner Charlie McCreevy offers sensible advice below regarding what is needed to move beyond the current financial meltdown. However as we are all painfully aware, banks have been slow to come clean about their exposure. Hopefully that will all change in the near future.

Banks must come clean, says EU commissioner
David Gow in Brussels guardian.co.uk
Wednesday April 16 2008

The only way to restore confidence in global financial markets is for banks to come completely clean about their exposures, Charlie McCreevy, EU internal market commissioner, said today.

McCreevy told guardian.co.uk: "There's no commercial paper market in Europe and it appears that last week's rate cut by the Bank of England made no difference at all because there's no confidence at all."

"What we need is a situation where every financial institution puts all its cards on the table so everybody can see clearly what they have and how they have valued things - and over a period of time that's the only way to put confidence back into the world."

The Irish commissioner also highlighted the time it would take for banks to regain consumer and regulatory confidence. "This excessiveness built up over a long, long number of years and didn't happen just in the last six months. It would be lovely to think that would be finished in a couple of months but it will only wash itself out over a period of time."

At least one economist out there still thinks that the US economy is not headed for a recession. I want to believe him, but based on the continued barrage of negative news, something tells me he is out of his depth.

As for the tax rebate mentioned in the article, well I recently got a letter from the IRS indicating that I'll find out in May if I'm entitled to the payment. I'm assuming every taxpayer from last year got this same letter. What a complete waste!

Recession unlikely if US economy gets through next two crucial months

From The Times

April 7, 2008

Anatole Kaletsky: Economic view


After last Friday's announcement of the third consecutive drop in US employment figures, following hot on the heels of Ben Bernanke's admission that the American economy is already in recession - or more precisely that “a recession is possible ... there's a chance that for the first half as a whole, there might be a slight contraction” - I am probably the only economist left in the world who still believes that a US recession is likely to be avoided.

Obviously, I drew some encouragement for this view from the surprisingly decent ISM index, which triggered the huge rally in global stock markets on Tuesday (with some help from UBS and Lehman and the news of further regulatory moves to ease the credit crunch).

But the monthly employment figures are widely regarded as the real litmus test for the recession/soft landing debate.

So does Friday's 80,000 employment decline mean that the US is in recession? And does it matter anyway whether the technical definition of a recession is or is not satisfied? The answer to the first question is No and the answer to the second is Yes.