Posted in Economics on June 29th, 2012 2 Comments »
It appears that protectionist sentiment within the steel industry just will not just die down. Earlier last year, Megasteel unsuccessfully lobbied for a levy on steel imports. That was shot down because users of steel protested. Megasteel, being the sole domestic producer of flat steel (used mainly for vehicles and major appliances), in its eagerness [...]
I understand the case for the breaking up of the Eurozone. I do appreciate the virtue behind a flexible exchange rate, especially for cases like Greece. There is a need for rebalancing that a monetary union cannot provide. Yet, I am uneasy at the suggestion of a break-up, of Grexit, because deep inside of me, [...]
Posted in Economics on June 21st, 2012 No Comments »
This economic crisis is a challenge to advocates of small government, especially for those who establish their argument based on finance. Even those who ground their position on something more profound like libertarians are being challenged simply out of the practicality of the situation. The situation is that the cost of borrowing for several governments [...]
Posted in Economics on June 20th, 2012 No Comments »
Kapil Sethi has a really odd piece yesterday in The Malaysian Insider yesterday. It started pretty alright by discussing crime but the strangeness began when he tried touch the realm of economics: At a deeper level though, this desperation points to a changing politico-economic environment that is forcing such radical shifts in behaviour. When there is [...]
Posted in Economics on June 18th, 2012 1 Comment »
…consider the grim fact that even €100 billion may not be enough to put Spain’s banks back on their feet, as they could easily face losses of perhaps three times that amount: Real-estate loans amount to €298 billion, construction credit to €98 billion, mortgages to €656 billion and other loans for families and firms to €683 billion. Assuming a 50% [...]
We live in a time of widespread economic crisis. Europe is in recession. For some European countries like Greece, it is effectively the Great Depression all over again. Economic recovery in the US is slow, with the labor market in May registering horrible statistics to suggest that the US recovery may be flagging. On the [...]
Posted in Economics on June 13th, 2012 1 Comment »
There was a piece of news recently that the government plans to introduce unemployment benefits in Malaysia. By default, as a libertarian, this should be a repulsive idea to me. But really, I can be supportive of the benefits on at least one condition. I like rule-based policy and I mostly dislike discretionary one, especially [...]
Posted in Economics on June 11th, 2012 7 Comments »
So after the rumor of bailout, the official denial and later the external pressure, Spain has finally requested for a bail out from Europe. The bailout is expected to be utilized, in turn, to bail out Spanish banks. The money will come from either the EFSF or the ESM, whichever is politically expedient. Even before [...]
Posted in Economics on June 10th, 2012 No Comments »
A good theory has two characteristics: internal consistency and external consistency. An internally consistent theory is one that is parsimonious; it invokes no ad hoc or peculiar axioms. An externally consistent theory is one that fits the facts; it makes empirically refutable predictions that are not refuted. All scientists, including economists, strive for theories that [...]
Posted in Economics on June 7th, 2012 No Comments »
During the launch of IMF Regional Outlook a few months ago, Anoop Singh, the IMF director for the Asia-Pacific Region mentioned how the financial system is not ready for high-skilled service industry. As his argument goes, banks usually demand collateral before providing any loans to businesses (or, mostly, anybody for that matter). This is perfectly [...]
