MacroScope

It seems to have been an honest mistake for a new minister and Japan's new government.

"I didn't know about that (the release time). I'm sorry. Don't make much of a fuss" Japanese Trade Minister Masayuki Naoshima told a TV reporter on Monday, right after he accidentally revealed the GDP figures ahead of their official release.

The minister looked sincerely surprised when informed of the official release time, but the light tone of his comments suggested that he did not fully understand the gravity of the error. 

He later offered a more formal apology, and Chief Cabinet Secretary Hirofumi Hirano reprimanded Naoshima for his leak of the market-sensitive data, which showed Japan's economy grew much more than expected in the third quarter.

Still, I was surprised to see Prime Minister Yukio Hatoyama smiling when asked about Naoshima's mistake.

Talk about a disconnect.

Experts say U.S. economic growth has returned, signaling the end of the longest and deepest recession since the Great Depression.

But the good news for Wall Street -- where shares have been running up -- is showing no signs of trickling down to Main Street, where unemployment is flirting with 10 percent, foreclosures continue to rise and record numbers of families now depend on government-issued food stamps to make ends meet.

"For every person out of work, for every family facing foreclosure, for every small business facing a credit crunch, the recession remains alive and acute," U.S. Treasury Secretary Timothy Geithner said in testimony to a congressional committee.

Could it be that equity and bond investors are living in the best of all worlds at the moment?

Tim Bond, head of global asset allocation at Barclays Capital, has hinted that they might be. He says that history shows current conditions to be the best for both assets.

 Since 1925, we find that in those years in which GDP was above trend and inflation below trend, U.S. equities have delivered an average 10.6 percent real return, with 20-year Treasuries delivering a 5.2 percent real return. 

The G20 is made up of the finance ministers and central bank governors of 19 countries and the European Union.

If it takes two successive quarters of falling GDP to enter a recession, how can a country emerge from recession with only one quarter of growth?  In the past week or so, journalists have declared the recession over in France, Germany and now Japan.  Of course, most reports rightly ask how long this will last and stress that a genuine recovery is far from certain.

Some people regard the two quarters definition of a recession as arbitrary and a bit silly, something supposedly cooked up by one of Lyndon Johnson’s economic advisers  to avoid acknowledging a downturn until after the next election.

But it does serve a serious purpose: At least it reduces the risk that we’ll be misled by a statistical blip in one quarter’s data which might be revised away in the next release.

Fears of the swine flu are rising and some doomsayers compare the pandemic with the Spanish flu outbreak in 1918, which infected a quarter or even half of the world’s population and claimed more than 40 million lives– or 2 percent of the then 2 billion global population.

However, French bank BNP Paribas says comparisons with the Spanish flu seem excessively pessimistic and the damage to annual global GDP growth this time would be around 1-2 percentage points.

It does warn however that a severe pandemic could cause a second year of global recession in 2010.

Worried about the growing debt? You can help. In a little-known cranny of the Treasury’s website, the government asks for the help of everyday Americans in repaying the total public debt, which it tallies at a startling $11.3 trillion (or 80 percent of GDP).

In a section called “Debt to the Penny and Who Holds It,” Uncle Sam provides advice for those looking for the tip jar.

“How do you make a contribution to reduce the debt? Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public.”

It's official: Japan's economy shrivelled at a record pace in the first quarter.

Needless to say the 4.0 percent contraction in GDP (an annual rate of 15.2 percent, if you speak American) from January to March was not pretty -- especially when you see that the pain has spread from Japan's big autos and tech factories to the broader economy.

Much has been written about Japan's heavy dependence on exports from its powerful manufacturers and how the slide in orders from the United States and Europe has forced factories to curb output, lay off staff and slash capital investment.

But that GDP figure is looking backwards to a time we know was bleak for the economy.

The International Monetary Fund’s bumbled calculations on the financing needs of some eastern European countries revealed last week were met in Austria with disbelief, ridicule but also a quiet smile.

The IMF said it had overstated external financing needs of some countries in its Global Financial Stability Report, released on April 21, largely because of double-counting errors. The corrections have trickled in.

Worrying reports earlier this year indicating west European banks had lent $1.7 trillion to IMF-bailed-out states like Ukraine and Hungary worsened a steep selloff in the region’s assets. Policymakers lashed back at the time, saying the fear was blown out of proportion.

Like every recession before it, this slump will end. Some day. JPMorgan economist Bruce Kasman thinks that day may come sooner than expected.

“In what feels like the first time since the Babylonian era, we are making an upward revision to our U.S. GDP forecast,” he wrote in a note to clients.

He now sees the economy contracting at a modest rate in the current quarter, which ends in June, with growth resuming in the third quarter. By the middle of next year, he thinks GDP will be growing at a 4 percent rate. That ought to be strong enough to generate jobs (although JPMorgan made no change to its unemployment forecast, which shows the rate peaking at 9.5 percent in the fourth quarter).