Authored by Lakshman Achuthan and Anirvan Banerj via Bloomberg.com,
Two things bear most of the blame: external shocks and economic volatility.
The U.S. managed to avoid recession after the financial crisis, but Japan has succumbed to three contractions since 2009. Economic volatility is a key reason for this divergence, and that tells us a great deal about the risk of future U.S. recessions.
Something strange happened on July 24: on that day the Bank of Japan announced it would reduce the size of its purchases of five-to-ten year JGBs from Y500 billion to Y470 billion. However, instead of yields and the yen spiking, as some had expected would happen, they slumped. And, just as unexpectedly, 10Y JGB yields continued to slump over the next month, despite another reduction in the amount of JGB in the 5-10 year bucket that the BOJ would purchase on August when it further reduced the amount to Y440 billion.
Authored by Giulio Meotti via The Gatestone Institute,
The first time we laid out the dire calculations about what is perhaps the biggest mystery inside China's financial system, namely the total amount of its non-performing loans, by former Fitch analyst Charlene Chu we called it a "neutron bomb" scenario, because unlike virtually every other rosy forecast the most dire of which topped out at around 8%, Chu argued that the amount of bad debt in China was no less than a whopping 21% of total loans.
Authored by Gail Tverberg via Our Finite World blog,
World GDP in current US dollars is in some sense the simplest world GDP calculation that a person might make. It is calculated by taking the GDP for each year for each country in the local currency (for example, yen) and converting these GDP amounts to US dollars using the then-current relativity between the local currency and the US dollar.