Francis Coppola

And particularly in Europe, as this chart shows: The ratings agency Standard & Poors has called for governments everywhere to increase investment spending. It also says they need to improve the efficiency of the spending they are already doing.  Private sector investment spending all over the world fell after the 2008 financial crisis. In Europe, where the crisis started earlier, it started falling in 2007. And it has not recovered. Private sector investors remain risk-averse and...

When a former Bank of England deputy governor gives a presentation entitled "Are Low Interest Rates Natural?" to a extraordinarily high-powered audience of academics and monetary policymakers, you can bet he will come up with some great charts. Charlie Bean's historical analysis of long-term real and nominal yields in the UK is amazing: It is very evident that for most of the last 200 years, nominal and real consol yields have been pretty much pinned together. Charlie said that the gold...

That cliff edge feeling..... Yes, that's Volkswagen's share price. I was amused by the UBS advert. And just to rub salt in the wound, here is Carole King:[embedded content] Anyway, Volkswagen is in deep, deep brown stuff. Here are links to my posts so far on this. I will add more as I write them.1. The Car Manufacturers' Libor Scandal. Rigging emission tests will prove extremely expensive for Volkswagen. But I doubt if VW is the only vehicle manufacturer guilty of nefarious practices. I...

There is a widespread view that much bank lending is unproductive, i.e. does not raise GDP – or if it does, it does so in an unsustainable way by inflating asset prices or increasing inflation, rather than by increasing production.  Many proposals for bank reform therefore envisage restricting banks to “productive” lending, by which usually seems to be meant business finance and short-term consumer credit. Financial transactions on secondary markets, and the purchase of second-hand...

We have become used to tales of banks breaking rules, evading regulation, rigging rates and being fined eye-watering amounts of money when caught. But now their ranks have been joined by an automobile manufacturer. The German giant Volkswagen has been caught rigging the results of emission tests on diesel automobiles.  The emission tests are designed to ensure that new automobiles meet stringent anti-pollution requirements. America’s love affair with automobiles means that air quality can...

Anti-austerity demonstrators in Helsinki, Finland The ratings agency Fitch has affirmed the AAA rating on Finland's sovereign debt. But on reading Fitch's analysis, the justification for this is very hard to see.Finland's economic situation is, to say the least, dire.  This is what Fitch has to say about it: The Finnish economy is adjusting to sector-specific shocks in key industries (electronics, communications and forestry), is already experiencing the impact of an ageing population...

Mainstream media get this wrong all the time. The latest to go down the "paying banks not to lend" rabbit hole is Binyamin Appelbaum in the New York Times. Because he didn't understand how IOER works, he didn't understand the Fed's strategy, and wrote a post that gets it quite seriously wrong. So I've written a Forbes post attempting to set things straight. Here's a taster: The FOMC has decided not to raise interest rates – for now. But it’s still widely expected that rate rises will come...

In July 2008, the European Commission decided that the UK had an "excessive deficit" under the terms  of Article 104 of the Maastricht Treaty. Estimating that Government budgetary plans for 2008-9 would result in a deficit of 3.5% of GDP, the Commission said The excess over the 3 % of GDP reference value is not exceptional in the sense of Article 104(2) of the Treaty. In particular, it does not result from an unusual event outside the control of the United Kingdom authorities, nor is it the...

Daiwa Securities has forecast Armageddon. They say that over-investment in China in recent years has created a debt bubble so great that Chinese authorities would not able to manage its collapse, resulting in a debt deflationary spiral which would make 2008 look like a walk in the park. Such a meltdown would, in their words, "send the global economy into a tailspin".But they also outline another scenario, in which China's economy undergoes a nasty, possibly prolonged recession, from which...