Japan experienced stock market, credit and real estate bubbles in the late 1980s, but with more intensity than the U.S. later experienced. Prior to 1990, the Japanese economy and financial system were considered superior to the U.S.' as expressed in several books, such as Japan as Number One (1979). Japanese society was considered more thrifty and conservative than Western societies. In hindsight Japan was not immune to speculative euphoria and bubbles.
Since taking over as president on a permanent basis in 2008, Raúl Castro has undertaken a self-described effort to “save” Cuba’s socialist system by introducing various market reforms. To date, that program has included the establishment of non-agricultural cooperatives, the legalization of private farms and small businesses, the recognition of private ownership of homes (and right to buy and sell), and the relaxation of restrictions on travel outside of Cuba.
When Prime Minister Shinzo Abe and the LDP were returned to power in late 2012, the victory was attributed less to enthusiasm for the winners than to frustration with the incumbent DPJ. However, the LDP’s comeback was completed at upper-house elections held in July 2013, at which voters registered a clear vote of confidence in the prime minister and his government’s program of monetary easing, fiscal stimulus and structural reforms that has been dubbed “Abenomics.”
When President Barack Obama nominated Federal Reserve vice chairman Janet Yellen to take over as Fed chairman after Ben Bernanke departs in January, the markets purred a sigh of relief. The Fed’s adherence to ultra-low interest rates and quantitative easing to boost risk taking and asset prices is now expected to continue for at least another year and most likely until the end of 2015. This could prove costly.
Since the global recession began in 2008, Europe has struggled. For example, last year the European Union (EU) which is comprised of 27 countries with a consumer base of approximately 500 million, registered -0.2 percent growth. Although its economy has improved, it remains vulnerable. Nonetheless, there is a considerable upside not reflected in these figures.
The average home price in 20 major cities rose 12.1 percent over a 12 month period ending in June, according to the S&P/Case-Shiller Home Price Indices, a leading measure of the U.S. real estate industry. But this trend may be coming to an end as the increase in home prices appears be slowing partly due to rising mortgage rates. But the bigger picture sheds light perhaps on a more difficult issue.
Reacting to the 2008 collapse of Lehman Brothers, which portended a further implosion of banking, The Wall Street Reform and Consumer Protection Act (Dodd-Frank) was enacted in 2010. As this financial catastrophe reaches its third anniversary, a recent bipartisan panel from the American Enterprise Institute characterized the Dodd-Frank Act for what it is: "a failure." This is one forgettable anniversary.
The broad coalition government formed in the aftermath of two snap elections held in May and June 2012 has not held up well under the strain of implementing a painful austerity program demanded by the EU and the IMF as a condition for two packages of bailout loans. The coalition was already leaking support when the Democratic Left, the smallest partner, abandoned the government in protest over the enforced closure of the state broadcaster, ERT.
President Enrique Peña Nieto has managed to enlist the backing of both the conservative PAN and the left-leaning PRD for the reform agenda of his PRI administration. The unprecedented tripartite alliance, dubbed the “Pact for Mexico,” has agreed to steer a total of 95 reform initiatives through the 500-member Chamber of Deputies, and has already delivered in the areas of education, labor-market rules, and telecommunications.
President Park Geun-hye has suffered a number of political setbacks since taking office in February. This includes the forced withdrawal of four prospective Cabinet nominees from consideration owing to various transgressions or questionable affiliations, allegations that agents of the National Intelligence Service engaged in illegal political activity on behalf of Park’s presidential campaign, and accusations that her top aide committed sexual assault during a state visit to the U.S. in April.
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