5 great reads for your weekend http://t.co/ccy4axm8Qs
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Finance & Markets Channel: Latest Posts
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Emerging Markets
The IMF should guarantee emerging market debt
The current financial crisis is putting substantial pressure on emerging markets. Many if not all face a serious risk of a sudden and severe slowdown in credit as a consequence of the withdrawal of international liquidity pools until recently available to these countries. The consequences of a credit crunch could be dire for both their public and corporate sector. This would ultimately stall the last engine of growth on which the world economy relies. The International Monetary Fund should quickly put together a preventive facility to restore the capacity of countries with healthy macroeconomic accounts to borrow from private capital markets.
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Finance & Markets
The new, improved fed funds market
Yet another week of institutional changes that render all those nice macroeconomic texts and professors’ lecture notes obsolete.
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The Wilder View
The U.S. economy is efficient and resilient
Yesterday the Bureau of Labor Statistics released its measure of nonfarm productivity. U.S. productivity slowed to a 2.0% annual pace, but relative to the U.K. and Germany, the silver lining shows the innate resilience of the U.S. economy. Once the U.S. economy emerges from the recession, productivity will propel economic growth forward.
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Finance & Markets
A very weak employment report
More bad economic news arrived today from the Bureau of Labor Statistics.
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The Wilder View
The daunting news from the labor market: the U.S. recession is going to hurt
The October employment report was about as bad a report as could be. It is now very clear that firms are laying off workers and clinging to any productivity that they can muster up (See this post for my more sanguine outlook based on U.S. productivity).
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Finance & Markets
Two more FDIC Friday Night Specials: Franklin and Security Pacific
It is now a ritual. Every Friday night the FDIC announces which banks have been playing fas and loose with our money and need to be shut down. This week, there are two banks, Security Pacific of Los Angeles and Franklin of Houston. Franklin is the bank run by Lewis Ranieri, of Liar’s Poker fame and one of the early innovators of mortgage-backed finance.
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Asia
Asian and South Asian markets have spiked recently
.. but are resuming there slide downward. I have attached a (dated) spreadsheet that decomposes the US publicly traded Asian ETFs that may be of interest to those who want exposure to this sector but don’t want to go through the trouble of individual stock. The sheet breaks down sector concentrations and top 10 holdings for each fund.
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Finance & Markets
The Black Hole Gets Bigger: AIG Back for Yet Another Bailout
The Financial Times reports that AIG is up to its old tricks, back again to the trough for more money. Christmas The Iceland credit default swaps settlement is coming soon, you know. -
Finance & Markets
The Credit Crunch Conundrum
Cutting interest rates is not obviously positive for credit expansion.
This newspaper posed the question well: how can there be a credit crunch if credit continues to grow at a torrid 30 percent? Yet, it is undeniable that call rates have risen sharply to double-digit levels. What is going on? And how should monetary policy respond?
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Finance & Markets
US unemployment rate jumps to 6.5%
After stalling at 6.1% in September, the US unemployment rate jumped to 6.5%. This was a truly ugly report as we saw payrolls go down by 240,000 – more than forecast and September was revised up significantly from 169,000 to 284,000.
