Daily Archives: January 28, 2010

Simone Baribeau

An unexpectedly large 70 senators voted for Ben Bernanke to stay at the helm of the Federal Reserve for another 4 year term.

Mr Bernanke passed by a far wider margin than some had expected late last week and earlier this week, when his confirmation lost its all-but-inevitable status. Read more

Simone Baribeau

The vote to allow Ben Bernanke’s confirmation vote to go forward was 77 “yes” 23 “no” according to CNBC. So, procedural hurdles easily cleared (only 60 votes were needed), no one can now block the final vote on the Fed chief’s confirmation for a second term. Looks like Mr Bernanke’s reconfirmation is a go.

Simone Baribeau

Senate leaders are confident. Intrade futures give him a 97.2 per cent chance of being confirmed for a second term. The vote is expected later today. Stay tuned for more…

Ralph Atkins

Today’s European Commission confidence indicators provide further reassurance that the region’s recovery remains on track. The eurozone’s economic sentiment indicator continued its v-shape rebound, rising to the highest since June 2008. But there are some interesting divergences – and not just between the big northern European economies and Spain, Ireland, Greece etc.

I was struck by the part of the survey covering manufacturers’ expectations for exports in coming months (which is included only four times a year). German industry is seeing optimism about overseas demand for its products soaring. January’s reading was the highest since the third quarter of 2007 and noticeably better than in the other main eurozone economies. Read more

Simone Baribeau

Daniel Mminele, Deputy Governor of the South African Reserve Bank, today strongly defended its inflation targeting policy, the day after the Treasury announced a review of the scheme.

As South Africa’s economy has suffered the fallout from the global recession – the economy was hit with a whopping 7.4 per cent annualised decline in the first quarter of 2009, though it has since returned to growth and struggles with unemployment rates well in excess of 20 per cent – critics have called for the central bank’s mandate to be widened to include growth and unemployment. Read more

The debate on the eurozone was predictably full of waffle and empty rhetoric. The audience wanted answers to the financing problems of Greece, the economic woes of Spain, and the disaster that has been Latvia, countries that were each represented by their prime ministers. Answers to the genuinely difficult questions over the eurozone’s future, raised by Martin Wolf among others were not to be found.

Instead there was talk by George Papandreou, the Greek prime minister blaming speculators with “ulterior motives” for the high cost of financing his country’s debt. Read more

Simone Baribeau

Brazil posted yet another monthly budget deficit in December, and, yet again, it’s not the economy getting a Keynesian boost. Before interest payments, the budget surplus was 2.06 per cent of GDP, significant, but still far below economists’ expectations. After interest payments, the economy posted a 13.9bn real deficit, up from 2.41bn real deficit in November, the country’s central bank said today in a statement. Brazil’s debt stands at 43 per cent of GDP.

I am at a so-so lunch discussing the prospects for long-term economic growth and have just heard the best comment on global imbalances and the worst suggestion for international organisations. Both came from Angel Gurria, secretary general of the OECD.

The words of truth: “I don’t think anything of substance has been done during the crisis to correct global imbalances. It was the crisis itself that reduced imbalances”. Depressing but true. Read more