I owe readers a longer comment on this, since we may be going into crisis mode (ah, the joys of waking up and toddling out to the computer to see what wheels are falling off the global financial system today). Your humble blogger may be a bit jaded (two years of watching the crisis and […]
Read more...An interview with the Financial Times by Li Daokui, who serves on the Chinese central bank’s monetary policy committee, included an uncharacteristically candid comments on the state of China’s housing market and by implication, the direction of Chinese interest rate movements. From the Financial Times: “The housing market problem in China is actually much, much […]
Read more...As previous posts on this blog have discussed, trying simultaneously to shrink total private sector debt levels and government debt levels at the same time, absent very aggressive currency depreciation or other measures to increase net exports, is likely to result in a fall in GDP and deflation. Ironically, that means overly aggressive measures to […]
Read more...During the crisis of 2007-2008, there was fair bit of discussion of the so-called Minsky Moment, when an economy that has built a house of cards of speculation and over-leveraged “Ponzi units” (creditors that could never make good on their commitments, and are viable only by finding new suckers to give them new debt to […]
Read more...By L. Randall Wray, a Professor of Economics at the University of Missouri-Kansas City who writes at New Economic Perspectives WASHINGTON, 7 NOVEMBER 2017*. Yesterday Speaker of the House Dennis Kucinich was sworn in as President, replacing President Jeb Bush, who had fled to Riyadh, Saudi Arabia, aboard Air Force One seeking asylum in his […]
Read more...We’ve begged to differ with those who argue that the US will emerge largely unaffected by the economic headwinds hitting Europe at near gale force. The Eurzone has lashed itself to a deflationary mast via the scale and scope of its austerity measures. Its only route (absent a breakup) to alleviate the impact is a […]
Read more...Oh, if you don’t love the smell of naplam in the morning, you will not be happy with the market actions. Per my delayed Bloomberg, Euro flirting with recent lows, at 1.2281. Gold off at $1187 an ounce. (which fits if you believe in deflation, even though gold does well in deflation, the inflationistas may […]
Read more...Wolfgang Munchau, in the Financial Times, revives a line of thought that was voiced from time to time during the financial crisis: that some countries (the UK, Germany, the Netherlands, Switzerland) had banking sectors that were so large that it was an open question as to whether they could credibly backstop them. One of the […]
Read more...It’s hard to tell whether the story at the Guardian, based on a memo apparently leaked by Germany’s finance ministry, is overstating the situation in contending that changes Germany will demand for the euro regime could require a Lisbon treaty negotiation. From the article: Following Greece’s debt emergency and with the euro in the throes […]
Read more...Ouch. The media has been fixated with the euro versus the dollar, and has paid less attention to some of the dramatic action on other fronts. Mrs. Wantanabe seems to be shedding risk, big time.
Read more...By Warren Mosler, a fund manager, co-founder and Distinguished Research Associate of The Center for Full Employment And Price Stability at the University of Missouri in Kansas City, and creator of the modern euro swap futures contract. Gillian Tett of the Financial Times wrote today about stress in the dollar funding markets, which she regards […]
Read more...Some readers and commentators have argued that the EU should not have bailed out Greece, but instead should have restructured its debt. The logic is that Greece is a goner; there is no way it can meet its existing obligations, and a bailout serves to throw good money after bad. Better to engage in triage […]
Read more...By Jan Kregel, former professor of economics at Università degli Studi di Bologna and Johns Hopkins,m and currently a senior scholar at The Levy Economics Institute and Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute A week ago eurocrats launched their […]
Read more...Be careful about your cultural stereotypes! From Bloomberg, via Marshall and Andrew: Update: Hah! I missed a post from Mark Thoma that also shows that Greeks work more hours than Germans, a LOT more.
Read more...It’s starting to fell like 2007 and 2008 all over again: banks suddenly cautious about lending to each other, with the stress spilling into other markets. Per Bloomberg: The cost to hedge against losses on European bank bonds is 63 percent higher than a month earlier. Investment-grade corporate debt sales in the region plummeted 88 […]
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