Mosler Economics

Can’t be making Tariff Man happy: Highlights The effects of cross-border trade actions have been difficult to pinpoint in the national economic data but outlines may be appearing in goods trade. The nation’s goods deficit swelled to a much larger-than-expected $79.5 billion in December as exports fell 2.8 percent in the month to $135.7 billion following 0.9 percent contraction in November. Agricultural exports, a focused area with China, fell 1.9 percent in the month and are...

Chinese state company defaults offshore, first time in 20 years (FT) A Chinese state-owned enterprise from the country’s remote north-west has failed to repay a US dollar bond in Hong Kong, the first offshore default in 20 years and the latest sign investors can no longer rely on Chinese authorities to bail out state groups. Qinghai Provincial Investment Group defaulted on a $10.9m interest payment due on the Hong Kong note on Friday, then missed a separate principal and...

The notion behind what is called “Modern Monetary Theory,” or MMT, is that as long as the Fed can keep interest rates low without sparking inflation, the national debt and budget deficit won’t be an issue. MMT has been espoused by politicians including Rep. Alexandria Ocasio-Cortez, D-N.Y., and Democratic presidential candidate Sen. Bernie Sanders of Vermont. Powell conceded that he has not read up on the theory but said he has heard some “pretty extreme claims” about how it...

Japan downgrades industrial outlook for first time in 40 months (Nikkei) The Japanese government on Thursday downgraded its monthly assessment of industrial output for the first time in more than three years. The Cabinet Office’s economic report for February says “weakness can be seen in some areas” of production, qualifying a view of moderate growth that had been kept unchanged since October 2015. February’s report also downgraded the assessment on corporate profits. It...

Asia’s exports to China plunge as economy stumbles (WSJ) Japan’s exports to China in January sank 17.4% on the year to 958.1 billion yen ($8.65 billion), accelerating from December’s 7% drop. South Korean exports to China in January slid 19% on the year, a steeper rate than in the previous two months of decline. Taiwan’s mainland-bound shipments, which make up 40% of its total, also fell for the third consecutive month in January by 7.5%. Singapore suffered a 25% plunge....

Tariff man, aka Agent Orange, doing a number on global economies… Just went negative: Services moved up some but the trend still looks down: Japan appearing to be collapsing as well: And these recent headlines: Argentina Leading Economic Index The economy of Argentina shrank 0.1 percent month-over-month in January 2019, following a 0.3 percent contraction in the previous month. It is the eleventh consecutive decrease in economic activity but the softest since a mild 0.2...

Japan exports hit by biggest fall in 2 years on weak China demand (Reuters) Japan’s exports fell 8.4 percent in the year to January. It was the sharpest annual decline since October 2016, and followed a revised 3.9 percent year-on-year drop last December. Japanese exports to China, Japan’s biggest trading partner, fell 17.4 percent in the year to January. Slowing shipments ahead of Chinese New Year holidays likely helped slow China-bound exports, finance ministry officials...

China Total Vehicle Sales Vehicle sales in China tumbled 15.8 percent from a year earlier to 2.37 million in January 2019, following a 13 percent drop in the previous month. It was the seventh consecutive annual decrease in vehicle sales in the world’s largest auto market and the sharpest since January 2012 amid slowing economic growth. Still, new energy vehicle sales jumped 140 percent to 95,700 units, making the sector the best performing one among the whole automotive...

Starting to look more like most of the rest of the world: US retail trade fell by 1.2 percent from a month earlier in December 2018, following a revised 0.1 percent growth in November and missing market expectations of 0.2 percent gain. It was the steepest decline in trade since September 2009, as sales fell in almost all categories. Excluding automobiles, gasoline, building materials and food services, retail sales dropped 1.7 percent in December after an increase of 1...