Salient to Investors: Austerity policies are self-defeating because they cripple growth and reduce tax revenues. Cutting government spending causes output to fall, tax revenues to fall, and benefit spending to rise, ending almost invariably in slower growth or recession, and high budget deficits. The proper reaction to a negative external shock is to loosen fiscal policy,
READ MORE... →Salient to Investors: The median economist expects: Britain to fall 0.1 percent in Q4 and grow 0.2 percent in Q1 2013; and the UK economy to fall 0.1 percent in 2012 and rise 1.1 percent in 2013. Germany to fall 0.1 percent in Q4 and rise 0.2 percent; and rise 0.3 percent in both
READ MORE... →Salient to Investors: Real Capital Analytics said foreigners bought more UK properties worth over $9.5 million than residents for the first time in a decade, and bought 13.5 billion pounds of UK property through Oct. 12, versus 9.3 billion pounds of domestic purchases. Portfolio investments, including equities and debt, showed a 37.6 billion- pound net inflow
READ MORE... →Salient to Investors: Douglas McWilliams at Centre for Economics and Business Research said London’s financial-services jobs may drop to a 20-year low in 2013 due to the weak economy, hangover effect from the financial crisis, and increasing regulation. Read the full article at http://www.bloomberg.com/news/2012-11-06/london-financial-jobs-to-fall-to-20-year-low-in-2013-cebr-says.html
READ MORE... →Salient to Investors: Philippe Bacchetta at University of Lausanne and Eric van Wincoop at University of Virginia found that: Global trade and financial linkages weren’t strong enough by themselves to have caused the global recession in 2008 – self-fulfilling panics, not contagion, were to blame. The large losses of leveraged financial
READ MORE... →Salient to Investors: Jim O’Neill at Goldman Sachs Asset Management said over the past decade or so, inflation targeting, has not been sufficient, as great as it’s been for the U.K. O’Neill would add monitoring aspects of credit behavior and bank lending, and install a financial-conditions indicator as a warning sign. Read the full article
READ MORE... →Predictions: Bank of Tokyo-Mitsubishi UFJ Lee Hardman expects the Bank of England will have to ease more, which will weaken the pound to under $1.50 in the next couple of months. Economists expect data next week to show the U.K. economy is slowing. Read the full article at http://www.bloomberg.com/news/2012-06-09/pound-strengthens-as-boe-keeps-stimulus-on-hold-gilts-decline.html
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