Wednesday, January 18, 2012

Most Influential Economic News of the Year

Last week, we invited our readers to participate in a public poll for the 2011 top 10 economic news. Feedback from our readers has been far exceeding our original expectation. We have received tons of emails from our readers participating in the poll. We thank for all your support for this special poll event.

US Central Bank Federal Reserve

Can Central Banks Save the World during Debt Crisis?

However, some of our readers expressed that they have difficulties in selecting just the top 10, especially because there had quite a lot important economic news about European debt crisis in 2011. For this particular reason, we decide to increase the number of most influential economic news from 10 to 20, thus making it 'Top 20' instead of just 'Top 10'. Even there are now 20 places available for the Most Influential Economic News of the Year, the competition is still very keen and we have to take many important economic news out of the top list. Now we would like to announce our poll results (Top 20) with our own comments, as follows, in ascending date order:

Date of NewsBrief Description of NewsSource of NewsMr China's Comments
1Feb 27China decided to slow down its GDP growth.Reference: Financial Review for 2011 Q1This has been considered as an important and strategic decision for China to improve the quality of its GDP growth by 2015. Read more: 12th Five-Year Plan (2011-2015) and Government Work Report.
2Mar 18G7 jointly intervened the global currency exchange markets.dittoThis G7 intervention was intended to help Japan fighting against the Yen appreciation since the powerful tsunami and earthquake on March 11, 2011.
3Apr 7Portugal needed to seek bailout from International Monetary Fund (IMF) and European Union (EU).Reference: Financial Review for 2011 Q2Portugal was the 3rd Eurozone country (after Greece and Ireland) seeking bailout.
4Jul 21Greece was the first Eurozone country resulting in default.Reference: Financial Review for 2011 Q3Though the Greece default was claimed as voluntary, it should still be a default and should be regarded as one of the most important economic news in 2011.
5Aug 5U.S. failed to keep its top AAA credit rating.dittoStandard & Poor's (S&P) was the first major credit rating agency to downgrade the U.S. sovereign-debt rating to AA+ from AAA.
6Aug 9U.S. Federal Reserve decided to freeze its interest rate target at the existing all-time low (0%-0.25% level) until mid 2013.dittoIt was the first time for the U.S. Federal Reserve to freeze its interest rate target by a precise duration. The move was intended to encourage investors to buy long-term U.S. government bonds by borrowing short-term money.
7Aug 10China suspended approval of all new high-speed rail projects.dittoThis suspension was followed by the Wenzhou train crash on July 23, 2011, and should have a significant impact on the overall volume of fixed asset investments in China.
8Sep 6Swiss Franc (CHF) was pegged with Euro (EUR).dittoSince then, the global foreign exchange market lost one safe-haven currency.
9Sep 17Occupy Wall Street (OWS) protest began in New York.ditto2011 was a year of protest. No wonder why the Occupy Wall Street (OWS) protest was selected as one of the most influential economic news of the year.
10Sep 21U.S. Federal Reserve launched Operation Twist (OT2).dittoIt was another policy of the U.S. Federal Reserve to encourage investors to buy long-term U.S. government bonds.
11Oct 6BoE (Bank of England) launched its QE2 worth GBP 75 billion.Reference: Financial Review for 2011 Q4This QE2 could be considered as a coordinated operation of major central banks, i.e.: to have U.K. resumed printing more money when U.S. was temporarily unable to do so.
12Oct 25China turned to 'fine-tune' its tightened macroeconomic policies.dittoIt was the first time for China to relax its macroeconomic policies after tightening since December 2010.
13Nov 2Contraction began in Germany manufacturing industry.dittoSince Germany is the strongest economic body in Eurozone, Germany on the verge of recession could be a turning point for the European debt crisis. Read more: Global PMI Warning: Which Country Can Save the World.
14Nov 9Italy 10-year government bond yield surged to 7.5%, its euro-era historical high.ditto2011 was a bad year for Italy as the European debt crisis exploded towards the 3rd economies in Eurozone.
15Nov 10Russia entry of WTO (World Trade Organization).dittoIt should be one of the few good economic news in 2011 as Russia entry of WTO (World Trade Organization) should encourage more free trades within Europe region.
16Nov 21U.S. Congress supercommittee failed to reach agreement on fiscal deficit reduction.dittoThere was no big surprise, as arguments between Democrats and Republics in the U.S. should never end.
17Nov 29EU relaxed the EFSF (European Financial Stability Facility) rules to allow buying Eurozone government bonds directly in primary market.dittoAfter allowing EFSF to buy bonds in secondary market since July 21, 2011, EU further allowed EFSF to buy bonds directly in primary market due to insufficient buyers in primary bond market as well. These actions were particularly important to help suppressing the speculative rise in yields of Eurozone government bonds.
18Nov 30Six major central banks jointly offered extra USD liquidity until February 1, 2013.dittoThis special operation also involved an overnight interest rate reduction to 0.5% by the U.S. Federal Reserve.
19Dec 9U.K. decided not to join the new EU treaty for closer fiscal integration.dittoAs U.K. might be marginalized outside the new EU integration, it could limit the future U.K. economic growth in the long run.
20Dec 21LTRO (Longer-term Refinancing Operation) of ECB (European Central Bank) offered EUR 489.1 billion lending to European banks.dittoThis was known as 'Sarkozy carry-trade', i.e.: offer liquidity at low interest rate to encourage European banks to buy Eurozone sovereign debts.

Once again, thank you for your participation in this poll and we will continue to report any influential economic news to our readers for the years to come.


Post a Comment

Popular Articles in this Week (Top 10)

Not What You Want?

Try More Search in Our Website Here...