Will any outside iceland? RT @LondonBSchool: Grimsson: "The way we were treated by G. Brown will be remembered for centuries in Iceland!"
17 minutes ago
Global Macro Channel: Latest Posts
-
Finance & Markets
Emergency Global Rate Cuts: 50 bps
Coordinated rate cuts around the world, 50 basis from the Federal Reserve, European Central Bank and four other central banks. The banks lowered interest rates in an unprecedented, emergency coordinated bid to “ease the economic effects of the financial crisis.” The Fed cut its benchmark rate by a half point to 1.5%, as the ECB [...]
-
Europe
No European Ownership of the Fortis Problem
The nationalisation of the Dutch Fortis assets has led to euphoric reporting in some Dutch newspapers, as if Holland beat Belgium in soccer. Minister of Finance Bos is lauded for negotiating a bargain price and president Wellink of the Dutch central bank (DNB) for his foresight and his unfaltering protection of ABN-AMRO. In truth [...]
-
Finance & Markets
The Meltdown (Part I)
Global capital markets have seized up. Confidence is evaporating. Put simply, no lender trusts any borrower to repay, fearing that that borrower won’t be able to rely on anyone else to honor obligations. Even banks are hoarding cash, unwilling to lend to other banks. Everyone with any savings is heading for the hills — for [...]
-
Finance & Markets
How Bad Will the Downturn Be? Stylized Facts
The IMF released several chapters of the World Economic Outlook; one chapter entitled Financial Stress and Economic Downturns provides some insights into the ramifications of the current financial turmoil. click to download figure Figure 4.7 from WEO (Oct. 2008). Notes: Sources: Haver Analytics; OECD, Analytic Database; OECD, Economic Outlook (2008); and IMF staff calculations. The [...]
-
Finance & Markets
A Response to Lawrence Summers
Larry Summers is certainly right in asserting that the impact of Hank Paulson’s US$700 billion plan on the US fiscal position need not be very large and it will depend very much on how it is deployed and how the economy performs. He is also right in arguing that, in the present difficult economic circumstances, [...]
-
Europe
Can the IMF Save the World?
As the financial crisis has unfolded, the International Monetary Fund has been noticeable mainly for its absence. This will now change at least temporarily as its Governors assemble for their annual meeting and the kleg lights are turned on. The question is whether those Governors and the management to whom they entrust the Fund’s operation [...]
-
Europe
French And German Anger Misses The Fact
Anger runs deep. It is aimed at financiers, who first earned huge and conspicuous bonuses and now successfully force taxpayers to pay for their mistakes. It is also aimed at financial markets, whose merits have been oversold. The mantra that financial markets always allocate resources better was never true. Financial markets suffer from very [...]
-
Global Macro
Are We Still Sure We’re Not in a Recession? More on the Employment Situation
I hate to pile on, perhaps in a repetitive fashion given Jim’s post, but a mere three weeks ago, Donald Luskin was asserting “Things today just aren’t that bad.” And, pulling a comment out from mid-September, we have this definitive statement: “But in the final analysis let’s just stick to facts. We are not in [...]
-
Global Macro
No coins, no COIN
Introduction: It is important that move beyond the panic “oh my god” stage, and consider what these events mean for America. On one hand, recessions are not Armeggedon, but part of the normal business cycle. The economy must both inhale and exhale. Let’s not be like the fictional savages, who each winter worry that the [...]
-
Emerging Markets
BofA Gives Details on Loan Modification Program
Nice to see that the Feds aren’t the only ones bailing people out. Tonight I see a release from BofA wherein it essentially bails itself out itself via a $8.4-billion mortgage modification program for people with home mortgages obtained through its Countrywide subprime subsidiary. Granted, it did this at the urging of various state Attorneys [...]
