All’s quiet — so far — in the City and Wednesday’s papers are fresh off the stand.
In the spirit of the nightly U.K. newscasts that painstakingly review the next day’s newspaper front pages, here’s a quick take on Wednesday’s papers, all of which front the Tuesday night arrival of President Obama. Many note the diplomatic and security force the president brought with him.
All’s quiet — so far — in the City and Wednesday’s papers are fresh off the stand.
In the spirit of the nightly U.K. newscasts that painstakingly review the next day’s newspaper front pages, here’s a quick take on Wednesday’s papers, all of which front the Tuesday night arrival of President Obama. Many note the diplomatic and security force the president brought with him.
Israel’s central-bank governor said Tuesday he will continue to push an expansionary monetary policy — while keeping an eye on inflation — as Benjamin Netanyahu ushers in a new government and the country fights the ripple effects of the global economic crisis.
“Monetary policy will continue to be expansionary until there are signs of inflation,†central-bank Gov. Stanley Fischer said in an interview. “We’re doing very expansionary things now, and we’re going to have to be prepared to undo them when the economy starts recovering.â€
Israel hasn’t been hit as hard as many developed economies in the current crisis. That’s thanks in part to measures like tight bank regulations and strict mortgage terms. But the economy is highly dependent on exports — they account for some 45% of the country’s gross domestic product. That translates into economic pain at home when the rest of the world is suffering.
The central bank is forecasting a contraction this year of as much as 1.5%. And Israel’s corporate-bond market essentially has been dried up since last year amid the global credit crunch. The bond market had attracted sizable investments from savings plans and pension funds, whose values now have plummeted. In March, the Bank of Israel cut its benchmark interest rate to 0.5%. It was the latest in a series of cuts that have brought rates down from 4.25% in October.
The central bank this month also proposed a stimulus package, calling for a boost in spending on infrastructure and benefits to further blunt the effects of the downturn. Though the government has been slow to match Mr. Fischer’s monetary policy with fiscal-policy moves, the economy is one of the most pressing domestic issues facing Mr. Netanyahu and one on which he prides himself. He won praise as finance minister from 2003 to 2005.
“We’ve had this period between governments in which we’re waiting for the new government to present its plans, and what precisely they’ll come up with will be very important in terms of determining the way ahead,†Mr. Fischer said.
But Israel’s own ability to turn the economy around will be limited by its dependence on the rest of the world. “We’re not going to take off rapidly until the rest of the world’s economy starts making a comeback,†he said. Mr. Fischer, a former senior World Bank and International Monetary Fund official, said he is in close touch with officials taking part in this week’s G-20 summit of the world’s largest economies.
Despite the country’s small size, Israeli officials hope to play a part in the current debate about restructuring the global economy. In June, Israel is to host the annual meeting of the International Organization of Securities Commissions, bringing together financial-market watchdogs from more than 100 different countries for the first time since the economic crisis hit.
Israel’s central-bank governor said Tuesday he will continue to push an expansionary monetary policy — while keeping an eye on inflation — as Benjamin Netanyahu ushers in a new government and the country fights the ripple effects of the global economic crisis.
“Monetary policy will continue to be expansionary until there are signs of inflation,†central-bank Gov. Stanley Fischer said in an interview. “We’re doing very expansionary things now, and we’re going to have to be prepared to undo them when the economy starts recovering.â€
Israel hasn’t been hit as hard as many developed economies in the current crisis. That’s thanks in part to measures like tight bank regulations and strict mortgage terms. But the economy is highly dependent on exports — they account for some 45% of the country’s gross domestic product. That translates into economic pain at home when the rest of the world is suffering.
The central bank is forecasting a contraction this year of as much as 1.5%. And Israel’s corporate-bond market essentially has been dried up since last year amid the global credit crunch. The bond market had attracted sizable investments from savings plans and pension funds, whose values now have plummeted. In March, the Bank of Israel cut its benchmark interest rate to 0.5%. It was the latest in a series of cuts that have brought rates down from 4.25% in October.
The central bank this month also proposed a stimulus package, calling for a boost in spending on infrastructure and benefits to further blunt the effects of the downturn. Though the government has been slow to match Mr. Fischer’s monetary policy with fiscal-policy moves, the economy is one of the most pressing domestic issues facing Mr. Netanyahu and one on which he prides himself. He won praise as finance minister from 2003 to 2005.
“We’ve had this period between governments in which we’re waiting for the new government to present its plans, and what precisely they’ll come up with will be very important in terms of determining the way ahead,†Mr. Fischer said.
But Israel’s own ability to turn the economy around will be limited by its dependence on the rest of the world. “We’re not going to take off rapidly until the rest of the world’s economy starts making a comeback,†he said. Mr. Fischer, a former senior World Bank and International Monetary Fund official, said he is in close touch with officials taking part in this week’s G-20 summit of the world’s largest economies.
Despite the country’s small size, Israeli officials hope to play a part in the current debate about restructuring the global economy. In June, Israel is to host the annual meeting of the International Organization of Securities Commissions, bringing together financial-market watchdogs from more than 100 different countries for the first time since the economic crisis hit.
Israel’s central-bank governor said Tuesday he will continue to push an expansionary monetary policy — while keeping an eye on inflation — as Benjamin Netanyahu ushers in a new government and the country fights the ripple effects of the global economic crisis.
“Monetary policy will continue to be expansionary until there are signs of inflation,†central-bank Gov. Stanley Fischer said in an interview. “We’re doing very expansionary things now, and we’re going to have to be prepared to undo them when the economy starts recovering.â€
Israel hasn’t been hit as hard as many developed economies in the current crisis. That’s thanks in part to measures like tight bank regulations and strict mortgage terms. But the economy is highly dependent on exports — they account for some 45% of the country’s gross domestic product. That translates into economic pain at home when the rest of the world is suffering.
The central bank is forecasting a contraction this year of as much as 1.5%. And Israel’s corporate-bond market essentially has been dried up since last year amid the global credit crunch. The bond market had attracted sizable investments from savings plans and pension funds, whose values now have plummeted. In March, the Bank of Israel cut its benchmark interest rate to 0.5%. It was the latest in a series of cuts that have brought rates down from 4.25% in October.
The central bank this month also proposed a stimulus package, calling for a boost in spending on infrastructure and benefits to further blunt the effects of the downturn. Though the government has been slow to match Mr. Fischer’s monetary policy with fiscal-policy moves, the economy is one of the most pressing domestic issues facing Mr. Netanyahu and one on which he prides himself. He won praise as finance minister from 2003 to 2005.
“We’ve had this period between governments in which we’re waiting for the new government to present its plans, and what precisely they’ll come up with will be very important in terms of determining the way ahead,†Mr. Fischer said.
But Israel’s own ability to turn the economy around will be limited by its dependence on the rest of the world. “We’re not going to take off rapidly until the rest of the world’s economy starts making a comeback,†he said. Mr. Fischer, a former senior World Bank and International Monetary Fund official, said he is in close touch with officials taking part in this week’s G-20 summit of the world’s largest economies.
Despite the country’s small size, Israeli officials hope to play a part in the current debate about restructuring the global economy. In June, Israel is to host the annual meeting of the International Organization of Securities Commissions, bringing together financial-market watchdogs from more than 100 different countries for the first time since the economic crisis hit.
The U.S. economy should find its footing around the middle of the year even after another “significant” contraction in the first quarter, Federal Reserve Bank of Minneapolis President Gary Stern said Tuesday.
Still he warned in an interview with The Wall Street Journal and Dow Jones Newswires that, when the recovery does come, it will be hard to discern right away.
“My forecast is actually for some improvement beginning around the middle of the year,” Stern said. “That doesn’t mean we’re going to take off to exceedingly rapid growth.”
But the inevitable worries about double-dip recession won’t get a very receptive response from Stern, who is in his third recession since becoming head of the Minneapolis Fed 24 years ago. His tenure, the longest of any current Fed official, spans the chairmanships of Paul Volcker, Alan Greenspan and Ben Bernanke.
“One of the things I’ve observed coming out of the last two recessions is that there’s always a lot of concern about (how) ‘this is a very fragile recovery’” and worries that “if the Fed doesn’t do just the right thing…the whole thing will collapse again,” he said, leading to talk of “double dips, triple dips.”
Stern knows from experience how hard it is to spot the trough of a business cycle. Recalling his days as the Minneapolis Fed’s research director in 1982, he said that he told the Minneapolis Fed’s directors that there was “no sign of the recession ending” in November of that year. Of course, the National Bureau of Economic Research eventually determined that the recession did in fact end that
same month.
Even if his recession-dating record isn’t spotless, Stern knows his history, and “if you look at history I don’t know if we’ve ever had a double dip,” with the possible exception of 1980 and 1982, he said.
Still, Stern expects the employment market to play out this time much as it did coming out of the last two recessions in 1991 and 2001, with job growth slow to catch up to rising output.
Stern disputes comparisons between the current economic downturn and the Great Depression.
To be sure, “these are in my judgment historic times in the financial sector,” Stern said. Noting that there used to be five major, standalone investment banks in the U.S., Stern said, “if you had told me 13 months ago we were going to have zero at the end of March, I’d have said no way.”
On the other hand, “I wouldn’t rush to the Depression when it comes to the economy for comparisons,” Stern said.
“For those of us who were around for ‘80-’82 and ‘73-’75, what’s happening in the economy and a lot of the rhetoric that goes with it rings more familiar,” he said.
Stern also said that he sees some signs that credit market conditions have improved since late last year, though the gains are of the uneven “two steps forward, one step back” variety.
Hoping to disarm nations ready to lay the blame for the international economic slump at the United States’ feet, a senior White House official said Tuesday Washington will not shy away from accepting some responsibility for the crisis in international financial markets. He also laid out how a new financial regulatory structure could be policed.
“President Obama has been fairly open in sort of saying what he believes the causes of crisis are, and that some of them rest in the weakness of the regulatory system in our country,†Michael Froman, deputy White House national security adviser for international economic affairs, told reporters here. “I don’t think we are at all averse in having an open dialogue about the causes of the crisis. … We’re not here to be defensive or to be shirking any responsibility.â€
He said the summit of the Group of 20 nations here will expand the reach of the Financial Stability Forum, an organization crafted by the nations with the seven largest economies, to include representatives from all 20 members of the G-20, to give large developing countries, such as Brazil and China, more say in the regulation of cross-border financial institutions. The forum would also be charged with implementing a crackdown on tax havens that will be recommended Thursday when the G-20 summit concludes.
Mr. Froman’s overtures come as many members of the G-20 are looking to punish the United States and Britain for what they see as a free-wheeling style capitalism that led to the crisis crushing their economies.
“This crisis was caused by no black man or woman or by no indigenous person or by no poor person,” Luiz Inacio “Lula” da Silva said last week after talks with Prime Minister Gordon Brown of Britain. “This crisis was fostered and boosted by irrational behavior of some people that are white, blue-eyed. Before the crisis they looked like they knew everything about economics, and they have demonstrated they know nothing about economics.”
Mr. Froman tried to deflect such recriminations, saying the nations of the G-20 have already come together to embrace a four-part agenda of “sustained†economic stimulus, international financial regulations, free trade and aid to the poorest countries buffeted by the crisis. The members have already agreed to “expand the scope of regulations to any institution, market or product that’s systemically important to the international financial system,†he said, mentioning hedge funds in particular.
“The stakes for this summit are very high,†he said.
The economy reached another depressing milestone in February. For the first time since at least 1979, every single state in the nation contracted, according to the Federal Reserve Bank of Philadelphia. Says Michael Feroli, of J.P. Morgan Chase, “Until recently, some natural resource dependent states like Wyoming, North Dakota and Arkansas fended off the recession, but in February the last hold-out, Louisiana, also slipped into contraction.â€
The Philly Fed constructs coincident indices of economic activity based on four main data points: payrolls, the unemployment rate, manufacturing hours and real wage and salary disbursements. The following chart shows the three-month change for February.
You can’t tell your bailout without a scorecard. The U.S. Treasury Department, as part of the Obama administration’s push to use the Internet to communicate directly with the public and make good on its pledge to be transparent, relaunched its financialstability.gov Web site Tuesday. Features include
You can’t tell your bailout without a scorecard. The U.S. Treasury Department, as part of the Obama administration’s push to use the Internet to communicate directly with the public and make good on its pledge to be transparent, relaunched its financialstability.gov Web site Tuesday. Features include
