Comments on: The G20 tees up another crisis A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: hsvkitty Mon, 28 Jun 2010 19:14:23 +0000 The likes of Paul Martin (no, not the hockey player) was needed at the table. A leader with experience globally and with economic savvy seldom found in a head of state. (he wasn’t perfect but he was smart as hell)

He could reach out to the other leaders and instill trust and that was missing. He conveyed that you have to reconcile the past to understand where you are going and he had a way of showing the road map for convergence of ideas and ideals for global interest. Seriously.

I am a centrist (not a fence sitting one) so not spouting partisan views. His policies, regulations and fiscal responsibilities are the reason why Canada is, so far, still in such good economic shape, so he deserves a nod.

No one wanted to put on the black and white hat (our present Prime Minister included) and I was hoping Obama might lead the way. Sadly, he has to be a puppet of his wallstreet economists. It has returned to bobbing heads with insular protectionist views.

They all made some commitment to some deficit reduction, but I am nonetheless hunkering in for the next crunch which will culminate in the next 2 years unless there is deficit reduction now rather then later.

Growth-friendly-debt-reduction is a very cute sound bite, but fiscal sustainability requires more then eloquent speech. There will be no bailout package for the USA. Belt tightening means you can still burst out a bit at the seams, but it makes you aware you need to keep sucking in your gut until you lose the weight. (and tough noogies if you hate my analogies)

By: HBC Mon, 28 Jun 2010 18:46:12 +0000 How to go from G-two-oh to G-duh-no in seconds flat?

Keep giving tax breaks to politicians. They lost me at “Our efforts to date have borne good results.”

By: Rikh Mon, 28 Jun 2010 17:43:09 +0000 1.The US keeps spending and hopefully their creditors keep accepting that.
2.Europe South has spend too much before and should get their things in order even spending more would not help, they are simply not-competitive.
3.Europe North (major part GDP-wise) looks to come out of recession and will cut spending (which is still in the region of 6to7% of GDP deficit. And will try to pay not more for the Southern countries as they already did. If other countries want to give the PIIGS a good dose of Keynes the Northern countries will be extremely thankful for that.
4.So first say 5 to 10 years in the Eurozone:
North 1.5-2.0% structural growth (around 45% GDP wise);
South minus 1.5to2% (35% GDP wise);
France 1.0 % (20%).
Overall say 0.5%to1.0% growth.
5.Major EM will do fine may be not 10% plus but not too much different from pre-crisis.
6. So providing The creditors of the US don’t make problems there will not be another big recession.
Unless something else goes terribly wrong, like:
-second housing bubble in the US;
-first bubble in Europe;
-bankingcrisis in Europe;
-warfront some crazy North Koreans.
7.House prices are still pretty high in Europe and deleveraging will push prices likely down. However with European politicians you sometimes worry that they don’t have a(n economic) brain at all. In eg Holland they are discussing at this moment abolishing the mortgage interest deduction and with an average taxrate of say 40%, makes financing more expensive. Prices ar roughly 30% higher than in Germany were they have a more limited deduction. 30% would only in Holland mean 250 bn Euro loss, bringing alot of private people in problems and subsequently banks and the government which has guaranteed the most vulnerable mortgages and cannot let the banks fail.
I doubt if the proposed stresstesting is really well comtemplated. If a bank fails, Central Banks will most of the time have to step in and/or the resp. country’s government and half of them have problems with their credit=line.
8. World will have changed. EM up, US slightly down, Europe considerably down. That all had to happen anyway only is speeded up.

By: jgould Mon, 28 Jun 2010 16:58:24 +0000 Could you write a little more about what you mean by a crisis surrounding U.S. interest rates and the dollar?

By: DanHess Mon, 28 Jun 2010 14:12:21 +0000 Sharp analysis and one of your very good posts. It will be maddening when politicians claim that the next crisis was unforseeable and unexpected.