1. Spain: Foreign investors enthuse over Spanish bonds again (FT), in part because the economy is doing better. But is the recovery real? Edward Hugh comments on the comeback:
Here I will focus on three issues that strike me in connection with the latest GDP numbers: the stagnation in the export boom, the difficulties being encountered in reducing the deficit and the ongoing deflation issue. The big question still remains: is this a balanced recovery, an export lead one, or simply a government financed one?He concludes (hardly a spoiler alert):
As I state at the outset, I have no doubt whatsoever that Spain’s economy is undergoing a modest recovery. Even economy minister Luis de Guindos calls it weak, fragile and uneven. Serious doubts exist about the extent to which we are going to see anything resembling a “classic recovery” in Spain, a recovery where solid export growth eventually broadens out into a wider improvement in domestic consumption and investment, even though this is what financial markets increasingly seem to be pricing in. Press headlines have trumpeted the country’s new found growth, but when you dig under the surface and find that most of the latest growth is either accounted for by a sharp DROP IN IMPORTS, or by a CALENDAR ADJUSTMENT IN GOVERNMENT ACCOUNTING, or by the ESTIMATED ARRIVAL OF DEFLATION then the conclusions you draw are hardly reassuring ones.2. Everyone seems to be raising indirect taxes. Here's a data table by KPMG, and here's a report by Ernst & Young.
3. Where in the world is there NOT a housing bubble? The Washington Post comments on analysis by Nouriel Roubini.
4. What do Japanese and Jewish people have NOT in common? I'm sure you can think of many things, but Noah Smith compares their argument cultures.