Category Archives: Doomsday scenarios

Michael Pettis: China – How Much Investment is Optimal?

If China’s very low level of social capital has long ago made its investment strategy obsolete, that suggests that China has overinvested beyond its capacity to utilize these investments economically. Thus there are hidden losses on bank balance sheets created by the failure to write down physical capital to its true value. In this case Chinese growth cannot help but drop significantly as these losses are finally recognized and as investment levels are sharply curtailed.

Hoisted From Comments: Neoliberalism Tearing Societies Apart

The true destructiveness of neoliberalism is becoming more and more apparent.

Andrew Bacevich: The US in the Middle East – “There Is No Strategy”

At best, the US is waging a war of attrition in the Middle East. And we ignore the fact that people in that part of the world hold grudges for centuries.

How Bank Networks Amplify Financial Crises: Evidence from the Great Depression

The Global Crisis emphasized the fragility of international financial networks. Despite this, there has been little historical research into how networks propagate financial shocks. This column explores how interbank networks transmitted liquidity shocks through the US banking system during the Great Depression. During banking panics, the pyramided-structure of reserves forced troubled banks to reduce lending, thus amplifying the decline in investment spending.

IMF Not Funding July Greece Deal, Still Wants Serious Debt Relief Before Committing New Dough

The IMF has not given up on debt relief for Greece, but due to the upcoming Brexit vote, is holding off on the fight until fall.

Sanders and Class Struggle in the Democratic Party

Sanders versus Democratic Party’s institutionalized corruption and domination by billionaires.

Wolf Richter: Business Loan Delinquencies Spike to Lehman Moment Level

While consumer credit card and mortgage delinquencies are tame, business loan delinquencies have taken a big turn for the worse.

Hard Landing Coming Soon? Chinese Officials Set Off Red Alert on Debt, Urge Serious Measure to Contain It

Chinese officials sent a serious warning about ending debt growth. If they are serious, the shock waves will engulf not just China but also the global economy.

Germany and IMF in Staredown Over Greek Debt Relief

The IMF and Germany have staked out irreconcilable positions on Greece. Who will blink first?

After Distancing Herself From Bill Clinton’s Economic Policies, Hillary Wants Him as Mr. Economic Fix It

Like the Bourbons, the Clintons appear to have learned nothing and forgotten nothing.

Money and Banking – Financial Crises

The mechanics of financial crises and how an economy gets there.

Trump Slams US Wars in the Middle East

Despite his considerable flaws as a candidate, Trump is making a serious case against US policy in the Middle East.

Satyajit Das: “Stay in the Name of Reform” – The Fed and ISDA’s Derivative Bankruptcy Initiative

Why a proposal to “stay” derivatives termination in the event of bank bankruptcy is inconsequential and avoids bigger questions about the use of derivatives and failure to rein in risks in this market.

Michael Hudson: Warning to Europe – How the TTIP Threatens Public Health Care and Pensions

Why the TTIP poses a wide-ranging threat to European health and pension policies.

As Clinton Looks Vulnerable, Event Risk Favors Trump (and Sanders)

When Donald Trump became the presumptive Republican nominee, you could almost hear the glee from Camp Clinton. Lambert called the tweets from her supporters “giddy”. The pundits saw Advantage Clinton in her presumed lock on women, blacks, Hispanics, as well as the divide of red versus blue states working in her favor. Yet the body […]