Around The Net: Noted For Your Weekend Ruminations – January 24, 2015

Noted for your weekend ruminations or procrastination.

  1. Disinflation And Weaker Growth Put Pressure On Asian Central Banks
    Chinese factories were forced to cut prices for the sixth straight month in January to sell their products, while economic growth in South Korea slowed sharply, raising the prospect of more policy easing from major central banks in Asia.
  2. Consumer and Producer Surplus: A Slideshow-Tutorial
    Consumer and producer surplus are useful concepts for explaining many points of microeconomic theory and policy. Applications include gains from trade in both domestic and international markets, the incidence and excess burden of a tax, and the deadweight loss from externalities.
  3. Why Fear Deflation? – A Tutorial
  4. Expedia Just Bought Travelocity For $280 Million
    The merger marks further consolidation in the online booking space, which has seen a number of acquisitions from Expedia Inc’s main competitor, The Priceline Group.
  5. Why is deflation continuing in Europe and Japan?
    We are no longer at the point where two percent inflation is easy to achieve in Europe or Japan.  Central banks are doubted.  To achieve two, they would have to shoot for four, and thus announce a target of four.
  6. The Keynesian shell game
    During the course of 2013, real GDP growth was almost twice as fast as during 2012, and nominal GDP growth also accelerated. Today some Keynesian like to minimize the austerity program of 2013, acting like nothing of importance happened.
  7. Four Years After Bank of Japan Set 2% Inflation Target, Prices Still Coming Up Short
    Investors are losing faith in Japan’s revival, according to the Bloomberg Global Poll. Financial professionals are the most bearish on the country and its leaders since 2012 after a renewed recession last year and mounting deflation concerns, the survey showed.
  8. Real wages & inflation
    However, in the longer-run, real wages aren’t affected by inflation. If they were, we could achieve higher wages by (credibly) reducing the inflation target – but nobody believes this.
  9. Confidence and the Bazooka
    Unfortunately, it did not work like this, and I am afraid it will not this time either. The private sector signals in all surveys available that it is not ready to resume spending. If governments are not given the possibility to spend more, most of the liquidity injected into the system will remain idle, exactly as it was the case for the (T)LTRO.
  10. Is 2015 the Year of Re-Emerging Markets?
    The other critical consideration is that these emerging market economic fundamentals are not reflected in equity valuations. The MSCI Emerging Markets Index has a P/E ratio of 12—a figure that looks relatively inexpensive when compared to the U.S. stock market ratio of 18 and the index’s long-term average multiple of 14.6. This could present an attractive entry point for under-allocated investors who have determined that emerging markets are a suitable allocation—and there appears to be no shortage of those
  11. Meet the New King, Same as the Old King: Price-Crushing Oil Policy Stands
    “If I reduce, what happens to my market share? The price will go up, and the Russians, the Brazilians, U.S. shale oil producers will take my share,” Al-Naimi told the Middle East Economic Survey last month. “Whether it goes down to $20 a barrel, $40 a barrel, $50 a barrel, $60 a barrel, it is irrelevant.”
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