category: Euro

An Economic Year in Review: 2010

Auld Lang Syne

Auld Lang Syne

Commonly pronounced: ‘Old Lang Zine’, this is the song most frequently associated with the New Year. What is it? Listen here.

Why are we discussing it?

For the Sake of Old Times

A Scottish poem set to music, it can loosely be translated into: “for the sake of old times”.

This iconic song asks the rhetorical question: should the past be forgotten? The song then answers ‘no’ – we will remember times past and celebrate the present together.

Hence, in the spirit of the New Year and Auld Lang Syne, we will review 2010.

A Humorous Rendition of 2010 from The Washington Post:

“There were bright spots. Three, to be exact:

1. The Yankees did not even get into the World Series.

2. There were several days during which Lindsay Lohan was neither going into, nor getting out of rehab.

3. Apple released the hugely anticipated iPad, giving iPhone people, at long last, something to fondle with their other hand.

Other than that, 2010 was a disaster.” – Dave Barry

Accurate, yes, but missing some key pieces.

2010: From the Ashes we Rise

2010 was a year of slow rebuilding (U.S.), confronting serious issues (Europe), and growing pains that come with explosive growth (China and the Emerging Markets).

The Globe officially emerged from one of the most serious recessions in history (2008-2009). And while things are not fantastic, they are unquestionably better.

Quick Year-in-Review Economic Summaries Across the Globe

2010 Summary: The U.S.

2010 Summary: Europe

2010 Summary: China

Send Some 2010 Goodwill!

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This Week’s News: Who’s Living the High Life?

Photo curtsey of Vanity Fair

Who’s Living the High Life?

Europe was, China is… and it looks like Investment Bankers always will

The big news on the week came from a few fronts.

Europe:

Ireland accepted a bailout package last Sunday night. It totaled 85B Euros. In addition, Portugal was placed on watch for an S&P ratings downgrade this week. For more read: What is a Ratings Agency?

The big worry is that Portugal and Spain may be the next ones to need a bailout. While Portugal would not be a huge problem, Spain certainly would.

Amidst all of this bad news, the value of the Euro versus the dollar fell. In the month of November, it was down over 5% versus the dollar, moving from 1.4 towards 1.3. In other words, one euro now buys fewer dollars.

China:

The country has been under pressure for an unlikely reason—it’s doing too well. China reported a trade surplus and a jump in PMI. For more read: What is PMI?

The Chinese government has been trying to “cool” markets by taking money out of people’s hands (generally referred to as monetary policy). This is the opposite of quantitative easing which tries to stimulate markets. Read: Quantitative Easing: Explained in Cartoons.

This has hurt Chinese stock markets. In the month of November, the Shanghai Index was down a little over 7%.

For people looking for a good long-term entry point into Chinese markets, many use these dips as opportune times to invest.


The U.S.

Taxes, Black Friday and Investment Banking is Back….Party!

The debate over whether we will extend the Bush Tax Cuts rages on. The NYT opines, In Tax Cuts, the Options Run Short, that Democrats will likely need to concede. But, perhaps they can negotiate to raise taxes on those earning over 1 million.

Black Friday was a success with traffic up at most retail locations. It was reported that people were buying more luxury items (such as  jewelry) and less “staples” (like the toothpaste you got last year for Christmas). Side note: why the heck do they call it Black Friday? Read here.

And…. it’s not just the retailers who feel a bit happier this year. It’s the Investment Bankers! The NYT reports that exuberance (read excess) is making a comeback: With a Swagger, Wallets Out, Wall Street Dares to Celebrate.

What Exactly is An Investment Banker?  And why do they get iPads? Read: iPads for iBankers.

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