Comments on: Many Countries Are Worse Off Than We Are

By: The Risk of Deflation in the Eurozone

The Risk of Deflation in the Eurozone — Fri, 29 May 2009 15:47:59 +0000

[...] Private sector demand is weak; it’s hard to see who will lead the recovery within the eurozone. In addition, the demand for European exports has fallen much more than expected, as seen – for example – in the big decline in German Q1 output. [...]

By: The Risk Of Deflation In The Eurozone « The Baseline Scenario

The Risk Of Deflation In The Eurozone « The Baseline Scenario — Fri, 29 May 2009 15:32:23 +0000

By: AMo

AMo — Wed, 27 May 2009 14:43:50 +0000

Simply because our phony means of payment (i.e. the little rectangles of papers we call US dollars) become worthless does not mean there will no longer be viable economic activity.

By: q

Tue, 26 May 2009 01:10:56 +0000

MOS burger is way better than mcdonalds IMHO.

By: paul canosa

paul canosa — Mon, 25 May 2009 02:40:10 +0000

GDP is down significantly in japan, and daily consumption have changed as well.

For example McDonald’s is now the leading fast food retailer here in Japan after many years of poor results. This has been mainly due to a dollar sale on burgers, which the Japanese have turned to in tough times.

There is also a bonus season, which is roughly equal to another months salary. Yet this years bonuses have been cut back.

The toll roads here have also instituted a cut in the costs of driving when using an automated debit system. People can now drive anywhere in japan for a max fee of 1000 yen on sundays.

Yet you can get a 30 year fixed rate mortage for about 3%

Things change slowly in Japan, but the pace of change has picked up of late

By: Kevin M. Arts

Kevin M. Arts — Fri, 22 May 2009 22:47:54 +0000

The problem with commodities is that most of them are contingent on economic activity. If there is a true flight from the dollar, how likely is there to be enough economic activity to support a demand for commodities? That is, of course, outside of their role as a store of value…

Gold maybe. Unlikely though.

By: AMo

AMo — Fri, 22 May 2009 22:32:39 +0000

You’re certainly right on the weakness of ALL fiat currencies, but people will leave the eventually.

There is no fiat currency that has lasted the test of time.

I think people will run to anything real. Commodities being the best.

By: q

Fri, 22 May 2009 19:44:24 +0000

it is not pretty. just saying that germany isn’t 3X as bad as the US even though the number would indicate that.

By: tyson vandament

tyson vandament — Fri, 22 May 2009 19:19:44 +0000

Canada is doing relatively better, but it is not even across the country. Central Canada (Ontario/Quebec) are getting hammered by weak demand for manufactured goods and higher Canadian dollar. Western Canada is holding up better do to natural resource prices. Also, jobs losses are up, but like most OECD nations Canadian dont lose healthcare when they lose their jobs, which is nice. Also, many Canadian (both companies and individuals) are using this as an opprotunity to buy US assets, whether real estate or existing businesses (Bank of Montreal cash purchase of portion of AIG’s insurance division).

By: Kevin M. Arts

Kevin M. Arts — Fri, 22 May 2009 18:49:50 +0000

I don’t know about that. Japan’s balance sheet is pretty awful. Germany’s deficit is projected to quickly deteriorate (link 1).

Moreover, this is likely to worsen over the next few years, as the debtor nations begin a process of deleveraging (link 2). Given that the #2 and #3 largest importers of German products are the US and the UK, respectively, I imagine that Germany will not see a substantial improvement in public finances for quite some time (link 3). It is unlikely that Germany’s other trading partners (France, Netherlands, Italy) will be able to soak up the excess.

Note that the net surplus countries are initiating pathetically weak efforts to spur domestic consumption.

Link 1: http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200905200615dowjonesdjonline000472&title=german-bundesbankdownward-pressure-on-global-economy-easing
Link 2: http://globaleconomicanalysis.blogspot.com/2009/05/effect-of-household-deleveraging-on.html
Link 3:http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Navigation/Statistics/Aussenhandel/Handelspartner/Handelspartner.psml

By: Kevin M. Arts

Kevin M. Arts — Fri, 22 May 2009 18:20:29 +0000

I agree that the dollar’s fundamentals are very weak, but a run to where? Gold? Commodities? Certainly not the euro. Yen fundamentals are also weak. The yuan? Not nearly ready. Where to then?

By: Alfred

Alfred — Fri, 22 May 2009 16:30:46 +0000

Outputgrowth in Japan, Germany, Italy and the EZ comes mostly from exports. It is the weakness in the major supply side economies that causes this drastic contraction of GDP. This is no cause for celebration to be sure.

By: q

Fri, 22 May 2009 15:37:00 +0000

the hardest hit countries are exporting countries with lots of savings and large government safety nets. their gdp may suffer a bit but i doubt their domestic balance sheets are as bad as those numbers would indicate.

the baltics are another story.

By: spencer

spencer — Fri, 22 May 2009 13:48:40 +0000

The US number is 6% annualized. Annualized means that if the one quarter 6% rate were continued for three more quarters the four quarter or year over year rate would be 6%.

To make the US number comparable to the other data divide by 4 to make it 1.5%. Not exactly because of the impact of compounding, but close enough.

By: Rogier Swierstra

Rogier Swierstra — Fri, 22 May 2009 06:24:49 +0000

Are you sure these numbers are correct? I recall hearing of US GDP dropping at about 6% (annualized) a few times … this could be month-end numbers, instead of quarter-end, but it should show up.