From Project Syndicate: Today’s fragile global economy faces many risks: the risk of another flare-up of the eurozone crisis; the risk of a worse-than-expected slowdown in China; and the risk that economic recovery in the United States will fizzle (yet again). But no risk is more serious than that posed by a further spike in … Read more
No Hollywood scriptwriter could plot a more implausible story. Here is the plotline sequencing: Bankers make NINJA loans, securitize them, and sell on to government GSEs Bankers destroy all the loan documents and begin random and fraudulent foreclosures, throwing millions of innocent victims out on the street GSEs sue bankers and force them to take … Read more
The following was published by my firm, Westwood Capital, LLC, as a research report this morning and is subject to the disclaimers set forth below. A convenient copyable data table can also be found at the end of this post. It has been just over 36 hours since the release of the 2012 CCAR (the “stress … Read more
An interesting thing happened in Q4 2011: the corporate saving rate declined following two quarters of gains. Nominal net saving by the domestic business sector fell 3%, while nominal gross fixed investment and inventories surged 6% – the two pushed the saving rate down nearly 40 bps to 2.94% of GDP. The corporate saving rate (gross saving … Read more
Near-term China investment decisions and US trade and economic policymaking are influenced by competing views of China’s longer-term outlook. Yet economic models of China’s long-term growth are shaky, debatable and hence few in number. Official statements from China’s leadership about long-term expectations, and more importantly about the composition of long-term economic growth, are even more … Read more
The re-emergence of China has dominated recent economic and political discourse. The Chinese economy is forecast to expand by around 60 % in the period between 2007 and 2012, compared to around 3% for developed economies. While China’s rise is important, its drivers are frequently misunderstood and poorly analysed. China’s economic structure is deeply flawed … Read more
The saga that is the Greek CDS trigger – a credit event being ruled only after CACs were inserted retroactively and then used by the Greek government to force the debt swap – made me think of a classic scene in the Princess Bride. Watch the YouTube clip of Billy Crystal as Miracle Max, who famously … Read more
The two most crucial questions about the Greek public debt crisis have been whether the country would be forced to default on its public debt and whether it would have to leave the euro area. At present Greece has pursued an orderly default on its privately held debt, but it remains in the euro area. … Read more
CNBC — Portugal is likely to be the next to restructure its debt and exit the euro zone, economist Nouriel Roubini predicted on CNBC Friday. There are several euro-zone countries in trouble, including Italy and Spain, but Roubini sees Portugal as the weakest. The longtime bear and chairman of Roubini Global Economics said the Greek … Read more
Well, a weekend during which Greece seems to have been finally able to pass muster on its bond deal, while Mario Draghi has given the official “all clear” on the debt crisis, seems to be as good a moment as any to have a look at the country which many investors consider likely to be the next … Read more