p style="text-align: left;"By Claus Vistesen: Copenhagenbr //pp style="text-align: left;"(please click on pictures for better viewing)br //pp style="text-align: left;"br //pp style="text-align: center;""Being a Keynesian means being a Keynesian in emboth/em the good and bad times."/p p style="text-align: center;"emAndres Velasco (Finance Minister in Chile) [1]/em/p pbr //ppIt has been a while since I last had a thorough look at Chile (a href="http://chileeconomy.blogspot.com/2008/10/chiles-economy-in-perspective-october.html"here/a and a href="http://chileeconomy.blogspot.com/2008/08/economic-growth-in-chile.html"here/a); more specifically, the last time I had Chile under the loop was in October 2008 and thus around the time when the global economy was about to enter two quarters (Q4-08 and Q1-09) of absolute horror. Whether we are past the worst at this point in time is debatable and I am, personally, skeptical with regards the narrative of second derivatives and green shoots, but it is hard to deny that it does represent a narrative and a fairly strong one too. In this context I thought ...

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"Being a Keynesian means being a Keynesian in both the good and bad times."

Andres Velasco (Finance Minister in Chile) [1]

It has been a while since I last had a thorough look at Chile (here and here); more specifically, the last time I had Chile under the loop was in October 2008 and thus around the time when the global economy was about to enter two quarters (Q4-08 and Q1-09) of absolute horror. Whether we are past the worst at this point in time is debatable and I am, personally, skeptical with regards the narrative of second

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With the recent barrage of appaling macroeconomic data from the first quarter in the context of especially Europe, one has to wonder whether those much hailed green shoots aren't, as Hempton pointed out recently, turning into brown shoots. Personally, I think don't think we are out of the woods yet; in fact, as far as I can see we haven't even entered yet since the real question is what the new global economy will look like what level of capacity and trend growth key economies will be able to muster.

Consequently and although I am lukewarm about the idea of green shoots and second derivatives, I am more positive about the narrative presented by BlackRock Inc's Bob Doll when he points to the potential in emerging markets;

Emerging-market stocks may gain an average of 20 percent this year as they rebound faster and stronger than their peers in developed countries,

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ARE carry trades back in Vogue? With all the talk about second derivatives, equity rallies, and for my own part spring sensation in the market place this question is, I think, a natural one to ask. And by all means, I am not the only one who is asking it. Actually, I think most serious FX punters out there are considering (or have considered) whether it is time once again to seriously consider moving into carry trades. Now; it is probably a pretty good bet that if Alpha.Sources start talking about the return of any kind of market trend you are probably bound to have missed the boat on it from an investment point of view. Not that I am lacking the discourse or anything, but it is hard to escape the feeling that if we have, since mid February and ...

Last time I had Japan under the loop I asked whether there was no end in sight for Japan's economy and as I wind up for another close look, I must say that it is still very difficult to find good news if any at all. However, and for the sake of argument I thought that we might begin with some recent arguments in the context of the global economy which suggest that we may be past the worst of our travails. The first observation comes from the Economist's ever eloquent financial markets pundit, Buttonwood, who recently made the neat point that while we are still stuck in the mire, the second derivative might be turning positive. This suggests that while indicators are still on the decline they are now declining less rapidly. In Tokyo, Cassandra voices a similar sentiment

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Sitting here on a murky, but decidedly mild, Sunday afternoon in Copenhagen thinking about last week's events one of the more interesting was surely the Swiss central bank's decision to effectively enter quantitative easing as short term interest rates hit 0.25%. The reasons for this move are not in themselves extraordinary. On the basis of a GDP forecast of the coming year standing at a -2.5 to -3.0% contraction as well as the the severe risk (and in effect actual forecast) of deflation over the the forecast horizon monetary policy is acting accordingly. However, what was more interesting was the remarks that the unduly appreciation [1] of the Swissie since the advent of the credit crisis represented "an inappropriate tightening of monetary conditions";

The value of the Swiss franc has increased substantially since the beginning of the financial crisis in August 2007. This currency development has gained momentum since the

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I am pretty much up to my ears at the moment with, of all things, a country outlook/analysis on Chile. This means that I have not exactly had time to do my usual tour of the recent economic data from the Eurozone and Eastern Europe. I hope to redeem myself at a later point next week.

Meanwhile I thought that I would round up this week at Alpha.Sources with a couple of pointers on a range of recently debated topics.

Hank Paulson, his Bazooka, and a European Perspective

Good old Hank Paulson certainly seems to be under the spotlight at the moment (see also my last post), not least in these two Bloomberg pieces from today and yesterday respectively. As could have been predicted it is all about who and what which will eventually make it under the soothing umbrella of the incoming treasury bail-out.

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By Claus Vistesen Copenhagen In case you did not notice, the Eurozone recently slipped into a near recession and so did Japan. Together with an already limping and essentially recessionary US economy this has prompted some analysts to ponder the probability of a global recession or more aptly; a significant and serious widespread global slowdown. Nouriel Roubini, who recently got some fine words in the NYT by Stephen Mihm (hat tip: Stefan Karlsson), massages the probability of a global recession in a recent piece. This is a topic also taken up, in a US context, by Joachim Fels in his recent installment over at Morgan Stanley's Global Economic Forum. Now, as Roubini points out, the global economy would "officially" be in a recession, according to the IMF, if global GDP were to decline to below 2.5% y-o-y. In general, one certainly has to agree with ...

In case you did not notice, the Eurozone recently slipped into a near recession and so did Japan. Together with an already limping and essentially recessionary US economy this has prompted some analysts to ponder the probability of a global recession or more aptly; a significant and serious widespread global slowdown. Nouriel Roubini, who recently got some fine words in the NYT by Stephen Mihm (hat tip: Stefan Karlsson), massages the probability of a global recession in a recent piece. This is a topic also taken up, in a US context, by Joachim Fels in his recent installment over at Morgan Stanley's Global Economic Forum. 

Now, as Roubini points out, the global economy would "officially" be in a recession, according to the IMF, if global GDP were to decline to below 2.5% y-o-y. In general, one certainly has to agree with the main thrust

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CAN you feel it? That cold empty void where  Macro Man's dissection of last week's flight of the buck should have been. Of course, this only goes to show that our good MM's initial hunch was right in the sense that when he sets off on holiday fireworks spark from the sky in market land. Last week consequently marked the biggest USD rally (against the Euro) since the conception of the single currency. Actually, last week had the buck written all over it as Uncle Sam's currency rose against almost anything that moved to erase everything but a small part of the loss it had sustained so far in H01 2008. It seems that the exercise of leafing through those Benjamin Franklins is not as pityful an endeavor as it used to be, only a few months ago. Of course, the past week's performance of ...