Are the Germans Going to Crash the World Economy?

As Greece squeezes by without a “Grexit” — earlier this week eurozone ministers approved a four-month bailout extension— markets, politicians, pundits are far calmer today than they were a few years ago. Back then, in the fall of 2011, the prospect of a eurozone without Greece sent global markets into turmoil. Granted, it was bad year, what with a near-U.S. debt default and pervasive fears of a European Monetary Union undone by mountains of bad bank debt. By late November 2011, international credit markets were exhibiting the same danger signs of stress that followed the collapse of Lehman Brothers in September 2008, and it appeared that the long-feared next stage of a global financial implosion was at hand. It took the simultaneously actions of the world’s central banks, followed by a “final” bailout of Greece by the “troika” of the IMF, the European Central Bank and the Eurozone countries to the tune of 240 billion Euros.

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Should Investors Fear Global Tensions?

Over the past few months, geopolitical crises seem to have proliferated. First, in March, long-simmering tension between Russia and the Ukraine metastasized to a full-blown crisis after the government of Ukraine was toppled by a popular revolt. That then led to the Russian annexation of Crimea, which was followed by sanctions imposed by the Western states, armed conflict between Russian separatists and the Ukrainian government in eastern Ukraine, and even more sanctions.

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GDP's Early Relevance

Economist Zachary Karabell explains the historical progression of the leading indicators in use today. Starting with World War II and continuing through the '50s and '60s, Karabell describes how the numbers came to be policymaking tools. This Carnegie Council event took place on March 11, 2014. For complete aud

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Latest Record Results Show Apple a Bigger Global Power Than Most Nations

Yet again, Apple announced record sales and earnings. Yet again, its “Jobs report” stood in stark contrast to the monthly official jobs report. For the past four years, as the U.S. economy has stumbled, Apple has soared. As millions have lost jobs or stayed underemployed, Apple has sold more phones, iPads, and computers than most thought possible. While its success certainly has come at the expense of competitors such as Research in Motion (maker of the BlackBerry) and Nokia, it has generated tens of billions in revenue and sold tens of millions of devices by reaching new customers and not simply taking market share. And it has seen its most dramatic success during one of the worst economic slumps in the developed world.

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Huge Corporations Win Global Economic Spoils as 99 Percent Get Squeezed

The 1 percent versus the 99 percent—the haves and the have-nots; the government or the people; China versus the United States. Our conversations today are framed by these splits, yet as compelling as these are, they are each secondary to the yawning gulf that has emerged between large, multinational companies and everything else.

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Markets’ Mania Persists as Stocks Soar on News of Eurozone Deal

In yet another chapter in the manic saga of global markets, stocks soared Thursday around the world after European leaders announced yet another comprehensive plan to solve—once and for all?—the deepening sovereign-debt crisis. The outpouring of optimism was given an added boost by the release in the United States of third-quarter economic figures that indicated GDP increased 2.5 percent, and the icing on the proverbial cake was supplied by news that the Chinese government would potentially add some of its trillions in reserves to help shore up ailing European finances.

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Hard or Soft Landing for China? How About No Landing

The past few weeks in financial-land have been dominated by two combustible fears: 1.) that this time Greece really will default on its debts and plunge the Eurozone into chaos; and 2.) that this time China really will hit the brakes and bring much of global economic activity down with it. One of these fears alone would be enough to roil markets. Together they have been a potent and toxic mix.

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Stimulating

After months of confusion, we are about to close a painful chapter in the economic crisis of 2008-2009. With the imminent passage of the $800 billion stimulus package combined with the roll-out of the next stages of the government-orchestrated bank bailout and recapitalization, we are about to end the talking phase and enter the doing phase. While no one can say for sure whether these plans will work, it’s certain that they will have an effect.

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Hu’s on First — China and the United States

So Hu came to Washington, met with some CEOs, had a nice dinner and a 21-gun salute, and opened the Chinese purse to the tune of $45 billion in new business between China and the United States. The buzz was mostly positive, and the billions didn’t hurt. But it’s safe to say that most Americans are hardening into a view of China as a hostile competitive threat, and many Chinese have concluded that while the 20th century may have belonged to the United States, the 21st belongs to them.

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The G-20: This Time, It’s Different

Last week’s G-20 economic summit in South Korea was widely depicted as a failure for the Obama administration and a rebuff for the United States. In many respects, it was. Obama remarked that if the U.S. hadn’t tried to set the agenda, it would have had an easier time. “Part of the reason that sometimes it seems that the United States is attracting some dissent is because we’re initiating ideas,” he said. “We’re putting them forward. The easiest thing for us to do would be to take a passive role and let things just drift which wouldn’t cause any conflict.”

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The Winds Are Still Blowing East

While Washington is glued to the drama over health care, over the past few days, Russian Prime Minister Vladimir Putin has been in Beijing meeting with Chinese leaders including Premier Wen Jiabao and President Hu Jintao. In a series of communiqués, they celebrated the “strategic partnership” between the two countries and charted a course of future close relations.

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Superfusion: How China and America Became One Economy and Why the World’s Prosperity Depends on It

The economic relationship between China and the United States is the defining issue of our day. While debates over health care are vital to American society, and while challenges ranging from Iran to Afghanistan to North Korea are real, nothing will determine the arc of the coming decades — or will shape domestic life and prosperity in the United States — more than the emergence of China as a global economic superpower unrivaled except by America.

 

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Much Ado About Dubai

Global markets sank sharply at the end of last week on fears that Dubai World, a subsidiary of the government of Dubai, was on the verge of defaulting on approximately $60 billion of the emirate's $80 billion in total debt held by creditors world-wide. The rush of news stories added to the wildfire of panicky speculation, with headlines ranging from "Dubai Default Risk May be Big US Bank Problem," to "Dubai Shows Limits of Government Rescues."

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