Italian furniture desing: Forza Formabilio http://t.co/Oxd0JLfUYt
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Category Archive: Global Macro
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Pompeii’s Villas and Rome Burns While Bernanke Fiddles
After posting his article “Pompeii and Henry Paulson” on RGEMonitor.com, Chris Carroll has indicated to me that the purpose of this article was to “spur Bernanke to try to provide his own views… My suspicion …is that he [Bernanke] thinks buying the toxic assets is a bad idea …. I think Bernanke believed all along [...]
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What Next?
If the panic of the second week of October 2008 worsens, governments need to be prepared to stop it using auditing, recapitalisation, and liquidation. A stopgap stabilisation plan would be to guarantee all banks’ short-term liabilities, audit their assets, and then clean up the mess. We are in a midst of a banking panic caused [...]
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Desperate Times Require Desperate Measures
Barry Eichengreen says we need to implement aggressive fiscal policy measures, and those measures need to be coordinated across countries: Time to grasp the fiscal nettle, by Barry Eichengreen, CIF: …[G]overnments now need to recognise that they have not just a financial crisis but an economic crisis on their hands. We are well past the [...]
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Fix the Credit Problem, Not its Symptoms
Two weeks ago Monday, markets traded down 300 points at the open. The sell-off seemed to be in anticipation of what was widely considered to be a poorly thought-out bailout plan. As it became clear that the $700 billion package was not going to be approved by the House, the Dow Jones Industrial Average plummeted [...]
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Global asset re-pricing
It’s about 7:45 AM ET as I write this and the overseas stock markets are getting hammered. I can’t say I don’t fear what is going to happen today because I do. We are witnessing a meltdown of unimaginable proportions that is not just limited to one asset class or one sector of the economy [...]
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Status report on the financial crisis: we’re at a critical point in time
Summary: Here is a brief report with conclusions only. The situation is moving too rapidly and become too complex for explanations. This post describes the natural evolution of the trends I have written about for the past year, which are now reaching a climax. Not yet, but soon we will be able to see the shape of [...]
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Another Iceland?
European savers are shocked by the way in which their money has been frozen in Iceland. In the Netherlands, TV-reporters showed how Icesave has absonded with the money, leaving empty call centres in their Amsterdam offices. Next came the uncertainty about whether the Icelandic authorities would honour the deposit guarantee. An exceptional situation, but not [...]
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House Prices: Corrections and Consequences
Housing prices[1] have begun falling this year in several advanced economies, a sharp contrast from the increase in prices seen during 2007 in almost all countries save the United States where a housing correction has been underway since late 2005. In real terms, and on a seasonally-adjusted basis, house prices fell in the first half [...]
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Why Federal Reserve Policy Is Failing
The Federal Reserve and U.S. Treasury continue to fail in their attempts to stabilize the U.S. financial system. That is due to failure to grasp the nature of the problem, which concerns the parallel banking system. Rescue policy remains stuck in the past, focused on the traditional banking system while ignoring the parallel unregulated system [...]
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Dense Smoke on the Horizon
Let’s take a step back. We are all becoming so focused on the individual policy “trees” of the continuing crisis that its time to take a broader look at the forest. The forest, regretably, is burning – and localized, helicopter-ed water drops aren’t sufficient and are taking too long to get to the source of [...]
