Citing 2019’s world economic performance as “the feeblest since the global financial crisis,” this month the World Bank reduced its economic forecasts through 2022. The bank sees U.S. growth dropping below 2 percent due to unpredictable trade policies restraining investment and the costs that U.S. tariffs add to goods. Europe’s economy will grow by only...
Category: TRENDS ON THE U.S. ECONOMIC FRONT
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EUROPE: THE STRONG GROW WEAK
Despite the European Central Bank (ECB) dumping cheap money into the region’s economy last September when it sent interest rates deeper into negative territory – to -0.5 percent from -0.4 – and revived its €2.6 trillion bond-buying program, it’s not working. Germany, Europe’s largest and strongest economy, is expected to grow just 0.5 percent for...
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THE CHINA BLUES
As China’s economic growth rate tumbled to a 30-year low in 2019, corporate loan defaults surged to $18.6 billion, compared to $12.2 billion the year before. The largest group of sour loans is among corporations that borrowed heavily to grow rapidly during China’s recent expansion. Many government-owned companies are faring no better. Last November, Tewoo,...
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THE FISCAL BINGE
Despite record low interest rates of 1.25 percent and a previous government’s fiscal stimulus, South Korea’s economy hasn’t moved out of the slow lane. The exporter nation is expected to post a 2 percent growth rate for 2019, its worst record in a decade. South Korea’s economy has taken hits from China’s weakness and a...
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EMERGING MARKET BLUES
While the developed equity markets registered strong gains, emerging market indexes remained weak. The MSCI EM Index, which tracks these lesser-known markets, has gained just 47 percent since 2009, compared to the MSCI World Index, which gained more than triple that amount during the same period. The World Bank cites a litany of issues stifling...
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ECONOMIES SLOW DOWN, MARKETS MOVE UP
U.S.: Short-Term Highs, Long-Term Lows Despite warning signs of a global economic slowdown, Wall Street’s on a high. The S&P 500 is up 27.3 percent this year, its biggest annual gain since 2013, the Dow’s up 21 percent, and Nasdaq 32.8 percent. But for next year, the word on the Street is more growth but...