Category Archives: Credit markets

Capital Inflows and Booms in Asset Prices

Yves here. This is a tidy and useful addition to the literature on how high levels of international capital flows generate financial instability.

Eric Ben-Artzi: How Risky is Citigroup’s New, Improved Version of a Once-Toxic Type of Synthetic CDO?

We are all still paying the price for the stream of ever more leveraged credit derivatives that fueled the world’s greatest credit bubble. It appears that some of these are attempting a comeback.

Servaas Storm: Some Remarks on “Larry Summers, Secular Stagnation and the Crisis of the New Consensus Model”

It is truly ironic to see Lawrence Summers and Paul Krugman promote sustaining asset price inflation as the only viable option left to get away from secular stagnation.

The European Balanced Budget Disaster

In the immediate aftermath of the financial crisis, most European governments allowed the automatic stabilisers to kick in and implemented some mild discretionary measures, despite the strictures of the Stability and Growth Pact (SGP). But it was not long before the siren calls for “fiscal consolidation” arose…

Wolf Richter: French Megabank – “Germany Should Leave The Eurozone”

France’s government is struggling to stay relevant….and Groupe BPCE may have provided an answer by telling Germany to pay up or exit the Eurozone.

Why Should Banks be the Only Ones with Accounts at the Fed?

Should everyone with a Social Security number have an account at the Fed?

Yanis Varoufakis: The Emerald Isle Remains in Chains

A conversation with Phil Pilkington on Europe’s disgraceful triumphalism regarding Ireland’s ‘exit’ from its ‘bailout’

Ilargi: QE, The People And The Damage Done

A report issued by McKinsey Global Institute last week on the real world impact of QE warrants more scrutiny than it has gotten so far.

Catalan Politician Does Unthinkable, Threatens Spain’s Creditors

By Don Quijones, a freelance writer and translator based in Barcelona, Spain. His blog, Raging Bull-Shit, is a modest attempt to challenge some of the wishful thinking and scrub away the lathers of soft soap peddled by our political and business leaders and their loyal mainstream media. Cross posted from Testosterone Pit

There are certain things politicians should never do – assuming, that is, they want to hold on to their jobs. Using the dirty “s” word (sovereignty) for example, is a definite no-no. Also high up on the list of “don’t dos” is threatening the interests of foreign creditors and bondholders.

Yet this is precisely what Oriol Junqueras, the firebrand leader of Esquerra Republicana Catalana (ERC), the second largest party in Catalonia’s government coalition, did last week

Krugman, Following Summers, Endorses Asset Bubbles

We have now passed the event horizon into a world run by Dr. Pangloss. In a Sunday afternoon post, Paul Krugman enthusiastically endorses an IMF presentation by Larry Summers which depicts asset bubbles as necessary and desirable. And that means they both agree they should not only continue, they should be encouraged.

Randy Wray: What If China Dumps US Treasury Bonds? Paul Krugman Inches Toward MMT

Our deficit hysterians love to raise the specter of China.

Yanis Varoufakis: Ponzi Austerity – A Definition and an Example

For a while now I have been arguing that Europe’s policies for reducing the public debts of fiscally stressed member-states can be described as a Ponzi austerity scheme. In this post I attempt precisely to define ‘Ponzi austerity’.

Student Debt is Crushing the Economic Future of the Young

If a bad job market wasn’t damaging enough, the cost of paying off student loans does much more harm to the long-term prospects of young people than is commonly realized.

Has QE Stimulated Credit?

Yves here. As much as the post below is a very useful recap of data in terms of the impact of QE, I need to hector “Unconventional Economist” for being pretty conventional. His headline question, whether intentionally or not, reinforces the notion that it was reasonable to think that QE, or super low rates generally (as in ZIRP) would lead to increase lending….