Minneapolis Federal Reserve President Neel Kashkari told CBS “Face the Nation” on Sunday the recovery from the pandemic is stalling and called for more for fiscal aid. He said: “If 11 million Americans can’t pay their bills, can’t put food on the table, can’t make their credit card payments, their […]

The lack of progress in reaching an agreement on US fiscal stimulus is the biggest “catalyst” of market volatility for stocks right now, National Securities’ chief market strategist Art Hogan told CNBC Wednesday. He said: “The No. 1 catalyst in this market causing the most volatility is the path of […]

Minutes from the Federal Open Market Committee’s September 15-16 meeting show Federal Reserve officials raising concerns that a lack of new fiscal support could hinder the US economic recovery. FOMC participants “assumed the enactment of some additional policy support this year,” according to the minutes. Without such support, “the pace […]

After abruptly ending stimulus talks on Tuesday, President Trump reversed course and called for a piecemeal strategy to passing some economic aid. In Tuesday night tweets, the president called for Congress to pass $US25 billion in airline aid, $US135 billion in funds for the Paycheck Protection Program, and another round […]

Federal Reserve Chair Jerome Powell on Tuesday made his most pronounced call yet for additional relief spending, saying that the risks of passing too little stimulus far outweighed the risks of overspending and that a diminished rebound would be “tragic.” Hours later, President Donald Trump said in a tweet that […]

The US economy doesn’t need stimulus in the next 30 days, Morgan Stanley’s top equity strategist told CNBC’s “Closing Bell” on Tuesday. “I don’t think we need stimulus in the next 30 days for the economy to stay afloat. There is no risk of a double dip recession in the […]

President Donald Trump abruptly ended negotiations over new federal coronavirus spending on Tuesday, all but delaying more aid until at least next month. “It will mean more people dropping into poverty and people making terrible choices between rent, medicine, and food on the table,” Heidi Shierholz, a senior economist at […]

Goldman’s David Kostin told CNBC on Tuesday that markets are expecting a blue wave election victory, citing polling and betting market data. The chief US equity strategist said that consequential moves in the market may not be that dramatic because a large fiscal stimulus may offset higher taxes proposed by […]

Failure to pass adequate and timely stimulus endangers the US economic recovery, Federal Reserve Chairman Jerome Powell said Tuesday. In one of his most pointed calls for new aid, Powell noted that the risks of passing new relief measures “are still asymmetric.” While overspending risks are small, passing too little […]

Investors should capitalise on the best stock-picking conditions in “quite some time” and buy on any election-related weakness, according to UBS’s Frank Panayotou. The financial adviser said on Monday that stocks in healthcare, industrials, consumer discretionary, and global markets look attractive to him right now. Markets will continue to be […]

Economist Mohamed El-Erian said investors shouldn’t be overly reliant on stimulus support from the Federal Reserve or US lawmakers. He said gold and government bonds offer little protection against major sell-offs. Democrats unveiled a $US2.2 trillion stimulus plan this week, but El-Erian said “investors should not expect US law makers […]

Ray Dalio told Top100funds.com that a Joe Biden win will be a “negative initially” for markets but won’t be bad in the longer term. The founder of Bridgewater Associates explained: “It’s all a matter of money and spending.” Dalio said that markets will do well in the long term if […]

Today’s inflation concerns mirror those seen after the 1980 economic slump. And James Paulsen, chief strategist at The Leuthold Group, sees the trend as a boon for markets. The inflation surge seen four decades ago kicked off “a fabulous ‘disinflationary,’ two-decade performance in both the economy and the stock market,” […]

Democrats must unite against Senate Republicans’ new slimmed-down proposal for fresh stimulus, Senate Minority Leader Chuck Schumer said in a Thursday letter to his caucus. The GOP is floating a bill expected to cost $US500 billion to replenish select relief programs. The proposal “appears to be completely inadequate and, by […]

US officials may need to ramp up fiscal stimulus to avoid a “double-dip” recession, former Atlanta Fed president Dennis Lockhart told CNBC’s “Squawk Box Asia” on Friday. If authorities fail to control the virus and that results in further economic pain, a second downturn could be on the cards, Lockhart […]

Four in five panelists surveyed by the National Association for Business Economics said they see at least a 25% chance of the coronavirus fuelling a second economic downturn, or a “double-dip” recession. Nearly two-thirds of respondents said they viewed the US as still in a recession, and almost half said […]

Unemployment remains high and new jobless claims are still above 1 million almost five months into the coronavirus pandemic. Former top Obama economic advisor Jason Furman says Republicans made a mistake in assuming the economy would recover on its own without further government spending. “They have recessed without having acted […]

Marci McGregor, senior investment strategist, Chief Investment Office, Merrill and Bank of America Private Bank, told Bloomberg on Monday that the recession is in the rear-view mirror and a synchronised expansion is underway around the world. The strategist pointed to strong trends in housing and the resilient consumer as signs […]

Hedge funds are net short against the dollar for the first since May 2018 amid extreme weakness, Bloomberg reported Monday. The greenback has fallen about 6% against the euro alone since the start of the year. Big government and central bank s pending has pushed interest rates down and weakened […]

Bridgewater’s Karen Karniol-Tambour told Bloomberg on Thursday that the “new era” of economic policy is the coordination of monetary and fiscal policy. Changes in interest rates and quantitative easing are no longer the primary drivers of economic cycles, she said. She added that this new era of policies requires a […]

With monetary easing taking a back seat, it’s time for Congress to step up and issue more fiscal stimulus, Charles Evans, president of the Federal Reserve Bank of Chicago, said Monday. “The ball is in Congress’ court,” he said, according to Reuters, adding fiscal policy is “really fundamental for getting […]

The US entered a new phase of economic recovery “sooner than expected” but still faces challenges in the labour market and in curbing the coronavirus’ spread, Federal Reserve Chair Jerome Powell said in prepared remarks. Positive labour market and economic activity data suggest the US is on its way to […]

The Bank of Japan increased its COVID-19 stimulus from 75 trillion yen ($US700 billion) to 110 trillion yen ($US1.02 trillion) on Tuesday. “Japan’s economy has been in an extremely severe situation due to the impact of the novel coronavirus (COVID-19),” the central bank said. Japan has been one of the […]

US President Donald Trump is considering launching a $US1 trillion infrastructure stimulus plan, according to Bloomberg. Bloomberg said that most of the funds would go to infrastructure work in roads and bridges, and the rest of the funds would be devoted to improving 5G and rural broadband, confidential sources said. […]

Germany will borrow $US69.8 billion more than expected in 2020 to help fund its coronavirus fiscal stimulus packages, Bloomberg reported Monday. This will bring the country’s borrowing to 218 billion euros ($US245.4 billion) this year, Bloomberg said. Germany announced a 130 billion euro ($US146 billion) stimulus response to coronavirus earlier […]

US stocks sank Thursday as another round of dismal weekly jobless-claims data offset new economic stimulus efforts in Europe. US jobless claims for the week that ended on Saturday totaled 1.9 million, the Labour Department said Thursday. That exceeded the median economist estimate. Continuing claims, which represent the aggregate total […]

US stocks sank Thursday as another round of dismal weekly jobless-claims data offset new economic stimulus efforts in Europe. US jobless claims for the week that ended on Saturday totaled 1.9 million, the Labour Department said Thursday. That exceeded the median economist estimate. Continuing claims, which represent the aggregate total […]

The European Central Bank increased its Pandemic Emergency Purchase programme by a further 600 billion euros ($US676 billion) on Wednesday. Markets were largely expecting a 500 billion euros ($US563 billion) increase. The new package takes the ECB’s total announced monetary stimulus to 1.35 trillion euros ($US1.52 trillion). ECB also extended […]

Nobel Prize-winning economist Joseph Stiglitz said in an interview with CNBC that US stimulus programmes have “failed, and we have to admit that.” The US has launched $US2 trillion worth of stimulus, and another $US3 trillion package is set to be voted on by the Senate. Stiglitz, who won a […]

Germany could launch a fresh package of stimulus of as much as 100 billion euros ($US112 billion) to defend against the coronavirus, Bloomberg reported, just days after the EU proposed a 750 billion euro ($US826 billion) pan-European plan. Germany is reportedly considering measures such as aid for families, car subsidies, […]

Senate Majority Leader Mitch McConnell said Friday that considerations on a “fourth and final” economic relief bill will begin “in about a month,” NPR reported. Congress has been mired in talks over additional aid. House Democrats passed a $US3 trillion spending package on May 15, but McConnell has since refused […]

Standard Chartered said if the Fed were to introduce negative interest rates, it would have to be at least -0.5% or -1%, in what the bank called a “Hail Mary” move. “No one likes trying a ‘Hail Mary’ from midfield as the clock ticks down when you are losing, but […]

Hedge fund veteran George Soros says Europe should introduce so-called perpetual bonds – bonds that have no maturity – to help finance the response to the economic impact of the coronavirus. With a perpetual bond, the principal, or the amount that is borrowed, is never paid back, and the borrower […]

“There is a strong likelihood we will need another bill” to keep the economy afloat through the coronavirus pandemic, Treasury Secretary Steven Mnuchin told The Hill on Thursday. Mnuchin’s comments arrive as House Democrats’ $US3 trillion relief package sits stuck in the Senate, where Senate Majority Leader Mitch McConnell refuses […]

The Bank of England is now open to the idea of negative interest rates, Governor Andrew Bailey said, just days after it had ruled them out. “We do not rule things out as a matter of principle,” Bailey said during an appearance in front of a UK parliamentary committee. The […]

More stimulus from Congress is likely needed if the economy is to recover from its current slump, Robert Kaplan, president of the Federal Reserve Bank of Dallas, said Wednesday. Targeting state and local governments with aid will be key to ensuring a smooth rebound, he added in an interview on […]

Germany and France on Monday proposed a European Recovery Fund worth €500 billion ($US547 billion) to tackle the economic fallout from the coronavirus pandemic. The plan would be the most significant transnational fiscal effort in Europe since the Marshall Plan, which helped rebuild the continent after World War II. Designed […]

Emerging markets entered the current downturn with lower rates than in past recessions, leaving them with a diminished ability to prop up their economies, Nobel-winning economist Paul Krugman told Bloomberg on Friday. Such nations now face a liquidity trap, where interest rates sit at the floor and monetary easing loses […]

The Treasury Department plans to borrow $US2.99 trillion in the April-June quarter to pay for the government’s economic-aid measures. Congress has so far allocated nearly $US3 trillion to fiscal relief, and borrowing will likely increase if additional aid is passed. The department also expects to borrow an additional $US677 billion […]

Fresh monetary and fiscal aid is needed if the economy is to survive a “historic contraction,” Robert Kaplan, president of the Federal Reserve Bank of Dallas, told Fox Business on Friday. Kaplan sees US GDP sliding as much as 30% in the second quarter alongside unemployment soaring to 20%. While […]

The Senate passed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, on Wednesday, sending it to the House of Representatives and setting up President Donald Trump to usher in roughly $US2 trillion in economic stimulus with the coronavirus threatening near-term recession. The stimulus measure passed 96 to […]

The Senate’s $US2 trillion spending package would employ historic amounts of government cash to combat the coronavirus and its economic fallout. Legislators unveiled the fiscal-stimulus plan Wednesday evening after days of blockages and hurried negotiations. The bill finally passed the Senate on Wednesday evening by a vote of 96 to […]

Central banks and governments around the world are turning to a slew of economic relief tools to curb the coronavirus’s fallout. Several trillion dollars worth of stimulus are set to pad G-20 economies in the coming weeks as the outbreak stifles consumer activity and threatens a deep global recession. Here […]

C utting interest rates and increasing money supply will do little to combat coronavirus’ economic fallout, former Treasury Secretary Larry Summers argued in a Washington Post column. Monetary policy “is not likely to be very effective” and “could create problems down the road,” he said. Cheaper loans might fail to […]

Governments, central banks, and organisations around the world are utilising a range of policy tools to pad economies hit by the coronavirus. The G-7 announced Tuesday it would monitor the outbreak and act appropriately to keep economies from contracting, but its statement didn’t name specific actions to be used. The […]

The coronavirus is a once-in-a-lifetime epidemic that will squash those who don’t defend for a worst-case scenario, Bridgewater co-founder Ray Dalio wrote in a Tuesday LinkedIn post. The billionaire investor pointed to insurance companies offering insurance against the outbreak and investors selling deep out-of-the-money options as those set to face […]

Central banks have relied on rate cuts to stimulate their economies, but HSBC has argued government spending may also be needed to fight recessions. Cutting interest rates, already close to or in negative territory, may not prevent slowdowns alone due to geopolitical pressures, HSBC said. The bank said fiscal policy […]

Central banks in some of the world’s largest economies are gearing up to deploy new monetary stimulus to stave off a brewing global recession. But that stimulus might not be enough to prevent a downturn, according to Morgan Stanley. China, Germany, and the US have also floated various fiscal stimulus […]

In an interview with 60 Minutes on Sunday, Democratic Congresswoman Alexandria Ocasio-Cortez discussed some so-called radical economic ideas. Turns out, they’re not so radical. But her opposition will still find them incredibly threatening. That’s because she’s changing a discussion about economics that has gone uncontested for about 40 years, and […]

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Goldman’s Alec Phillips writes in a note to clients that the odds of Congress reaching some kind of “small bargain” is on the rise. It’s way too hopeful to imagine that Congress in this environment would ever be able to reach a broad deal on spending, entitlement, and taxes. But, […]

After the financial collapse, the US faced a problem in terms of how to stimulate the economy. The Fed had reduced interest rates to basically zero, and so it was forced to use additional, quasi-experimental tools to keep pumping. And these measures have had limited, and somewhat unpredictable effects. Meanwhile, […]

Don't expect a grand bargain.

President Obama signed a deal that would end the government shutdown and raise the debt ceiling. Critics note that under the terms of the deal, we would wind up back here again in a few months. Potomac Research Group political strategist Greg Valliere is not going down that road. “We […]

The government has shut down. Historically, the stock market itself usually does fine when this happens. But some some companies are disproportionately exposed to the government, which means a shutdown is bad for business. Goldman Sachs recently published a report listing the stocks of these companies. We pulled the the […]

Stocks are tumbling today, and some pundits are blaming the impending U.S. government shutdown. But this wouldn’t be the first time the government shut down. In fact, the stock market actually rallied during past shutdowns. Below is the chart for the S&P 500 showing what happened in the double-barreled shutdown […]

What's left?

The forced spending cuts known as the sequester are set to at least start kicking in on Friday. Soon, the attention will turn to the next potential crisis. 

A key policy goal right now is to minimize short term austerity since the deficit as a per cent of GDP is already shrinking quickly, and the deficit should continue to shrink over the next few years. So my view has been that something would be worked out on the […]

During the budget standoff between President Bill Clinton and congressional Republican leaders back in 1995 and 1996, widespread layoffs of federal workers played havoc with the federal bureaucracy and posed serious hardship and inconvenience for millions of taxpayers across the country. Furloughs of as many as 800,000 federal employees temporarily […]

“Sequester” has become the boogie man of the American political body. As a result, Americans in the military, retirees, and Medicare recipients will probably see cuts in their wages or benefits. Meanwhile, Congress pushes for the purchase of 300 new tanks at a cost of $3 billion. General Ray Odierno, […]

[credit provider=”AP”] The Progressive Caucus released a budget proposal this week which would stop the upcoming sequester, and replace the austerity cuts by closing unpopular loopholes and making targeted reductions to the budget. While the plan has literally no chance of passage in Congress, it does provide a good outline of how […]

Goldman’s Alec Phillips has a great note out about the coming decline in government spending.

[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Mountrushmore.jpg”] The break is over. It’s that time again to shift our attention back to the US fiscal situation.Nomura’s America’s Morning Comment notes the confluence of events (sequester, budget, debt ceiling, new budget outlook) that will begin to dominate.

[credit provider=”The U.S. Army on Flickr”] When the debt ceiling hike was agreed to in 2011, the GOP demanded spending cuts, which Obama was obviously keen to avoid, especially in a weak economy, and needing to face re-election.So the deal was this.

Dear Readers,

Taro Aso, Japan’s Finance Minister who has a serious problem with foot-in-mouth disease says Let Elderly People ‘Hurry Up and Die’

It is inevitable that around this time of year, investors ponder what the year may hold in store for the markets.

[credit provider=”Kanaka Menehune”] There’s a dire need for infrastructure spending in the U.S.Unemployment in the construction industry remained elevated, ending 2012 at 13.5 per cent. 

[credit provider=”Will Merydith via Flikr”] It’s been a month of high drama on the economic policy front as leaders in Washington grappled with the fiscal cliff.But out in the real world, not many people seemed to care as the economy did just fine.

[credit provider=”AP”] TaxVox proudly presents its 2012 Lump of Coal awards, Thelma and Louise edition, for the worst fiscal policy ideas of the year.The winners are:

Given all the news coverage and the drama over what is at stake, it can 
be easy to think of going over the fiscal cliff — as the spending cuts take effect and tax cuts finally expire — as the end of the world.

[credit provider=”Shutterstock”] In discussing the fiscal cliff issue, the one big takeaway not to forget is that it is all about austerity—-extreme austerity if we go over the cliff and a lesser amount of austerity if we settle it before year-end. More than likely, this is the start of new era […]

Social Security (SS) has released its estimates for the December data for benefits payed and taxes received. With this info, I can estimate the 2012 results that will be formally reported in five-months. It was a ho-hummer of a year for SS, it tread water vigorously, and ended up with […]

[credit provider=”U.S. Navy photo by Lt. Christopher Senenko” url=”http://www.navy.mil/view_single.asp?id=5746″] The fiscal what? Cliff? How about the fiscal “speed bump.”The CEO of the fourth largest U.S. defence firm, Raytheon (5th largest in the world), Bill Swanson “is telling investors sequestration would be a ‘speed bump,’ not a ‘guillotine,'” according to Politico.

via WorldIslandInfo.com

This week marks Golden Week, a national holiday in China. However, the United States has its own holiday to observe. Today begins a new fiscal year for the U.S. government. Unfortunately, a new year likely brings another trillion in federal debt to add to the mounting total.

We recently reached out to our favourite economists asking what one thing would spur the U.S. economy.

[credit provider=”Getty”] Nomura economist Lewis Alexander (who is a former Treasury economist under the current President) is out with the first note we’ve seen on the Paul Ryan pick.Alexander’s take? The pick is likely to strengthen support for fiscal consolidation, and pull forward the debate about the Fiscal Cliff, thus […]

Last weeks comments by Mario Draghi in which he claimed that he would do ‘whatever it takes’ to save the Euro has markets expecting action.

There was an interesting article out this morning from Reuters stating: 

[credit provider=”wikimedia commons” url=”http://commons.wikimedia.org/wiki/File:OwensVly1924.jpg”] Let’s be crystal clear: we don’t believe any of these people are bad or are intentionally trying to destroy the world.But if there’s one thing that has become obvious, it’s that policy paralysis is a major contributor to the ongoing global economic malaise.

In an interview with Bloomberg TV, economist Joseph Stiglitz stated that the Fed obviously mismanaged the economy before 2008 and that the outlook for America to return to full employment in the next few years looks very bleak.

[credit provider=”UpTakeVideo via YouTube” url=”http://www.youtube.com/watch?v=vAqO_xjgK7E”] In December the leaders of the EU agreed to a fiscal compact, which Ireland will vote on tomorrow. It would sanction countries that spend too much or don’t sufficiently cut their debt. Former Obama economic advisor Austan Goolsbee says that’s not the sort of fiscal union […]

The Congressional Budget Office is out with an analysis of what happens if we hit the proverbial “fiscal cliff” at the end of the year — when more than $600 billion in tax and spending provisions potentially change.

You frequently hear people debate the Obama recovery against the Reagan recovery, but it’s pretty dicey.

[credit provider=”AP” url=”http://www.apimages.com/OneUp.aspx?st=k&kw=argentina%201989&showact=results&sort=creationdatelower%3Aalphabetical&intv=None&sh=10&kwstyle=and&adte=1300468526&pagez=60&cfasstyle=AND&rids=c9688825fae6da11af9f0014c2589dfb&dbm=PY2000&page=1&xslt=1&mediatype=Photo”] With Argentina seeking to nationalize its largest oil company, Morgan Stanley’s Daniel Volberg sees increased odds of a hard landing.“Policy radicalization” has suddenly become the top risk in the country.

[credit provider=”Bloomberg via YouTube” url=”http://www.youtube.com/watch?v=y_8NqzEo2OI”] Everyone is freaking about 2013 because of the giant “fiscal cliff” that the economy faces.Morgan Stanley’s economics team led by David Greenlaw summarizes:

This is, perhaps, the most controversial slide in Richard Koo’s latest presentation on the state of the global economy.

If there are no changes to current law, 2013 promises to bring a big wave of fiscal tightening.

We just had the pleasure of attending a briefing by Nomura US economist Lewis Alexander on the outlook for the rest of the year, and the implications of the coming election.

[credit provider=”The New York Times” url=”http://6thfloor.blogs.nytimes.com/2012/03/28/painting-a-cover/”] Nobody wants much to think about it yet, but it’s well understood by everyone in Washington and on Wall Street, that a potentially massive fiscal problem is looming for the economy next year.The issue is divided into three parts: