Death Star Economics



China grows less, because the new leadership has done a good job

This week has been quiet and it ends practically in silence.

China released preliminary GDP numbers, showing that 2012 ended on a positive note, with year-on-year quarterly growth pushed up to 7.9% by infrastructure investments. On the back of this, China lifted its growth forecast for 2013 from 8% to 8.2%. But slow down for a second, overall 2012 has seen the least expansion of the economy since 1999! Why the optimism? Oh right, because China’s leadership changed in November and the new guys need to look good. Meanwhile, the People’s Bank of China announced short-term liquidity operations to counteract inflation, “as it too has no choice but to ease although not by the conventional inflation targeting methods now used by everyone else.” read article

In the US debt ceiling crisis (yes, let’s just call it a crisis, it’s become the accepted synonym of any situation) is being complicated by tax refunds. On average, most taxes are being filed in February, says the FT, making it hard to forecast government cash flows:

For instance, in February 2012, daily tax refunds paid out by Treasury varied from a low of $140m on February 2, to a high of $14.7bn on February 8 – with significant spikes and drops within that range throughout February.

In the background, Reuters engages in a US-markets-default-scenario mind gameread article

The Handelsblatt says Commerzbank is looking to cut 6,000 jobs in Germany, joining all other banks in firing people restructuring their employee base.

In other news, David Cameron announced to delay his notorious EU speech in which may or may not set the tone for London-Brussels relations from here on out, due to the gas plant siege in Algeria.

Weekend reading:

– Obituary: Aaron Swatz, co-founder of Reddit, committed suicide last week, read article

– Things to fear in 2013, read article

– Getting behind the burning Boeing batteriesread article

– Off to round two, how history will see Barack Obamaread article

Have a good one.

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