What was the Lima 2014 UN climate change conference?

  • Delegates from 194 countries met in Lima (Peru) Dec. '14 and held negotiations towards a comprehensive global climate agreement.
  • Goal to reduce greenhouse gas emissions to limit the global temperature increase to 2 °C (36 °F) above current levels.
  • Conference paved the way for 2015's landmark Paris UN Climate Change Conference (biggest opportunity planet earth has for a comprehensive climate change deal).

What questions did the Lima Dec 2014 climate conference leave unanswered?

  • How should burden of cutting emissions be shared?
  • What financial contributions must advanced economies make to allay the cost of whatever the rest of the world agrees to forego?
  • Now that the US and China are involved and making commitments, how can India be brought in too?

What are the notable provisions of Dec 2014 US budget?

  • Good for Immigrants, Wall Street, Oil & Gas industries.
  • Bad for ISIS, Ebola and small endangered birds in the US.
  • Increases limits for individual donations to political parties (from $34k to $340k per year).

What are the populist objections (from both sides of the political spectrum) to the current US budget?

  • $1.1tn spending package backed by both parties in Dec '14 to avoid government shutdown, but characterised by populist rebellions on both sides of political spectrum.
  • Conservatives angry about Obama's immigration policy (which shields millions of unauthorised immigrants from deportation).
  • Liberals angry about provision that helps Wall St. by easing derivatives rules.

What even is Quantitative Easing (QE)?

  • An unconventional monetary policy used by central banks to boost the economy when standard monetary easing has become ineffective.
  • Standard monetary easing = buying SHORT-TERM government bonds from the market in order to push/keep short-term interest rates at a specified target value (no longer works when short-term rates close to zero).
  • QE = buying specified amounts of MEDIUM-TERM AND LONG-TERM government bonds from the market (results in higher price of these bonds and therefore a lower interest rate).

Result of Dec. 2014 Japan snap election?

  • New 2/3rds majority won by Japan's ruling coalition (LDP + Komeito) in a very low turnout (around 52%) election.
  • Election viewed as a referendum on Prime Minister Shinzo Abe's economic policy (Abenomics).
  • Abe's Liberal Democratic Party (LDP) retained its House of Representatives majority (and will govern with the Buddhist-backed Komeito party after they together won 325 seats out of 475).

Is the ECB embarking on big-time Quantitative Easing?

  • Europe in recession so European Central Bank (ECB) needs to do something to boost growth by injecting liquidity into system.
  • Available tools are: [1] Quantitative Easing (purchasing bonds of longer maturity than short-term govt. bonds) [2] Cocktail of other monetary policy tools like buying short-term bonds, asset-backed securities and covered bonds, and auctioning cheap cash to eurozone banks.
  • Thusfar German Bundesbank has been against [1] but [2] doesn't seem to be working so well. Consensus is that chances of [1] occurring are increasing, especially as EU growth slows and US growth picks up.
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