The reports said the students would be put to work on construction projects in major cities and on other works in a bid to rebuild the economy. This could indicate that the country’s food crisis and economic problems are worse than previously thought.
Combined with reports of additional EU aid it appears the speculation of severe stress in the Hermit Kingdom appear to be correct.
The European commission is to give €10m (£9m) in urgent food aid to North Koreans on the brink of starvation, after negotiating for "unprecedented access" to ensure that the food goes straight to those most in need.
With North Korea on the ropes I wouldn't be surprised to see some sabre rattling and more than your usual number of threats and provocations in the near future. South Korea recently winning the 2018 Winter Olympics bid provides North Korean a new 'delicate' target to threaten as well.
I previously mentioned an entertaining video regarding the competing economic theories of Keynes and Hayek. Here is round two, and while its a few months old it deserves attention.
When watching the video pay close attention to the assistants to each boxer, you may recognize some other names as well as what appears to be Chairman Ben Bernanke in the first row of the meeting.
While the debate over monetary and fiscal stimulus continues (most recently as the wrangling over the federal debt limit) I'd like to repeat a graph I've shown before.
Total US debt (private, corp, government) to GDP rose for this entire data series until the great financial crisis of 2008. Since then its been dropping and this is one reason our recovery has felt so sluggish as corporations and individuals continue to delever.
I have mentioned before how even with a very steep yield curve we are not seeing a rebounding economy and others have noticed this as well; the steep yield curve mechanism appears broken.
for virtually the entire period beginning in late 1929 and continuing right through the Great Depression and into the 1950s, the yield curve was resolutely positive. And yet that period coincided with the two worst downturns in the last 100 years, as well as three other recessions.
Until the private sector deleverages monetary policy levers will be less effective. I have suspicions as to how Mr. Bernanke will 'fix' this problem but I'll leave that to a later post with evidence.
So what explains the current crisis and malaise? I think Steve Keen is on to something. I strongly suggest you watch this video and examine his theories.
edit: sorry about the autoplay. Hit the pause button to stop it.
Some notes from Jim Chanos' presentation at the Vail value conference. (thanks Katsenelson) Provides more detail on Chanos' bearish position in China. Note Chanos is a short seller so he is always bearish on something.
The brochure said the company would develop the land for agro-forestry farms and after expiry of the plan period, trees and cash crops would be cut and money from the sale would be guaranteed by post-dated cheques.... The Income Tax Department sniffed out a trail of bribes the company had paid buying real estate. The department says it has evidence that the palms of the registering authorities were greased while purchasing land at Jharmari for Chandigarh Extension 22 Project.
I should do a forensic study to see if the income statement and balance sheet could have alerted people to the possible fraud. A rogues gallery of failures / frauds could me most instructive.
While Greece is dominating the news (again) there are other rumblings in Euroland you should be watching. Below is the spread between German and Spanish 10 year yields. The trend is not going the right way.
Furthermore yesterday Spanish 10 year yields went up on a 'risk off' day. No longer does the market consider the government debt of Spain a safe haven when the equity and other risk markets go down. I'm closely watching the relative and absolute levels of Spanish debt As the Greece situation develops keep an eye on this to see if the panic spreads to Spain.
Attached is the year over year change in the Case-Shiller home price index and new housing permits. The year over year rise in 2010 was most likely due to the one time tax credit provided by the Federal Government.
One may notice it appears new home permits lead the rise and fall of home prices. Regardless both prices and new home permits are negative on a year over year basis which does not bode well for future employment or home price appreciation.
Saudi's ready to pump more oil after OPEC disagreements. Could get interesting if Saudi Arabia decides to burn the other OPEC nations and pump all out. They have done this before to let everyone know who's boss.
If you are looking for a good historical book regarding oil and politics I'd suggest The Prize: The Epic Quest for Oil, Money & Power
Central banks are culpable for cycle of boom / bust -- I have been meaning to write a longish entry regarding how specifically emerging market central banks have contributed to the cycle of boom and bust but this will have to do until then
I know, cheery stuff! Here's some good news: Industrial jobs coming back to America? -- China's inflation and a declining dollar may help induce an improvement in domestic production. This macro idea has been something I've been considering for a while.