European leaders tear up the rules, with unpredictable consequences : IT TAKES some doing to induce nostalgia for Jean-Claude Juncker. The prime minister of Luxembourg was the head of the Eurogroup of finance ministers when the bail-outs of Greece, Ireland, Portugal and Spain’s banks were agreed on. Those deals now seem like a model of sure-footedness. A bail-out intended to rescue Cyprus and keep it in the 17-strong euro zone backfired so badly this week that the risk of the small island economy tumbling out of the single currency suddenly became real. Although bond markets have remained fairly calm, bank shares have fallen (see chart 1). Even if exit can be averted, the botched bail-out has done a wrecking job on the frail Cypriot economy and beyond. (The Economist)
Read More : http://www.economist.com/news/finance-and-economics/21574040-european-leaders-tear-up-rules-unpredictable-consequences-bungled-bank
Britain’s squeezed households largely explain the country’s flatlining economy :
HENRY FORD said that it was customers, not employers, who really pay workers’ wages; employers merely look after the cash. Ford also thought economies did best when workers could afford to buy the goods that they make. These old American ideas do a good job of explaining Britain’s consumer slump. Digging into a typical household’s accounts suggests when it might end... (The Economist)
Read More : http://www.economist.com/news/britain/21573132-britains-squeezed-households-largely-explain-countrys-flatlining-economy-dropping-shopping
Why Clothes Might Not Be Made in China Much Longer ....
Manufacturing companies are bypassing China and moving factories to cheaper locales in Southeast Asia. Lever Style's Stanley Szeto explains why his company is gradually moving production to Vietnam and Indonesia.(WSJ)
Watch Video : http://live.wsj.com/video/why-clothes-might-not-be-made-in-china-much-longer/BD74F821-AA8A-4F4D-B7D2-60BFC3DFB763.html?mod=WSJ_article_outbrain&obref=obnetwork#!BD74F821-AA8A-4F4D-B7D2-60BFC3DFB763
LESS than a month after taking office as Japan’s new prime minister, Shinzo Abe has been lionised by some prominent Keynesians. His talk of curbing the independence of the Bank of Japan (BoJ) in order to strong-arm Japan out of deflation has won praise from those who think central banks may eventually need to sacrifice their autonomy and monetise government deficits in order to reflate their economies.
(The Economist) ....
Read More : http://www.economist.com/news/finance-and-economics/21570710-bank-japan-tests-limits-shinzo-abes-economic-power-win-some-lose
If Congress fails to cut a deal on the fiscal cliff this year, the scramble to do so in January could run smack dab into yet another high-stakes negotiation -- over raising the debt ceiling.
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By Jeanne Sahadi @CNNMoney November 19, 2012: 9:47 AM ET
Meet the economists who are making markets work better ....... "The Economist"
Read More : http://www.economist.com/news/21567079-meet-economists-who-are-making-markets-work-better-micro-stars-macro-effects
The structure of America's fiscal cliff
AMERICA'S economy seems to have slowed sharply in the current quarter as businesses postpone investment while waiting to see if politicians can avoid sending the country over the "fiscal cliff". That's the combination of tax increases and spending reductions scheduled for the year end. Economists at Credit Suisse have put together a chart of the cliff's components, their size and the likelihood that they will in fact take effect. The total hit is about 5% of GDP. Barack Obama and Congress are most intent on avoiding the expiration of George Bush's tax cuts on the middle class, and the automatic spending cuts (called a "sequester"). Those equal about 2% of GDP. But the parts that are almost certain to occur—expiration of the payroll-tax cut, imposition of discretionary spending caps—still equal a hefty 1.9% of GDP, quite a lot for a still weak economy to support. ( THE ECONOMIST )
Read more : http://www.economist.com/blogs/graphicdetail/2012/11/daily-chart-23