I’m in Alaska, amid moose and bear, trying to steal some time away from the absurdities of American politics and economics. But even at this remote distance I caught wind of Sanford Weill’s proposal this morning on CNBC that big banks be broken up in order to shield taxpayers from the consequences of their losses. … Read more
In a recent speech, Atlanta Fed President Dennis P. Lockhart took note of divisions within the Federal Open Market Committee (FOMC) as to whether further quantitative easing (QE) would be effective. When I cited Lockhart’s remarks in a post, a commenter expressed surprise. Yes, said the comment, it is possible to see how some people … Read more
It really rankles critics that MMTers claim they predicted the Euro disaster before anyone else saw it coming. The only problem with that is that we never said such a thing. All we’ve said is that we got it right. If others also got it right, that is great. If they said it first, even … Read more
I didn’t think it was possible, but my confidence in the ability of European policymakers to pull the Continent out of crisis continues to fall. This is saying a lot because I had virtually no confidence to begin with. Consider where we are at today. Greece once again is making the headlines, as it is … Read more
France’s INSEE business confidence, Germany’s Ifo business climate, and the National Bank of Belgium’s business survey demonstrate ongoing infection as the Euro area debt crisis hits business expectations in the core. Through July, business confidence in Germany and France continued to slide while that in Belgium rebounded, albeit from a low base. Of note, the … Read more
In the aftermath of the outbreak of the economic and financial crisis in August 2007, the world’s most important regulators and supervisors quickly arrived at the conclusion that international liquidity regulation must not only be harmonised, but also improved substantially.[1] In December 2010 the Basel Committee of Banking Supervision published Basel III: International framework for … Read more
Nice piece by Martin Essex at the WSJ today, “fingering” those who got it right about the Euro. He says: As the world’s financial markets begin to price in a total collapse of the euro project, there’s no shortage of economists and other experts saying they always knew it was doomed to failure. So who … Read more
Here is what we know about the global economy given the experiences of the past four years: There is a global insufficiency of demand relative to an immense oversupply of labor and productive capacity. The imbalances between high-wage/current-account-deficit/balance-sheet-indebted nations and lower-wage, surplus nations have produced a glut of savings in the latter, relative to the opportunities … Read more
The resignation of a senior IMF economist reflects a reassessment of the IMF role in the euro-zone crisis. On June 18, 2012, Peter Doyle, a senior International Monetary Fund (IMF) economist, resigned and wrote a damning letter to the IMF Executive Board. He accuses the IMF leadership of suppressing staff warnings about the 2008 global … Read more
The scandal surrounding the manipulation of LIBOR sets raises a number of issues. In the first part of the two part piece, the known facts are outlined. In the second part, the broader implications of the episode are discussed.Fix… Depending on context, the word “fix” can mean “set” or “determine”, “manipulate” or “rig” as well … Read more