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Yearly Archives
2013
US credit risk appetite hits euphoria
US corporate credit is outperforming other forms of credit assets such as commercial real estate. A good way to see that outperformance vs. global risk assets is in the components of the Credit Suisse Risk Appetite Index. For the first time…
Why, Abe?
Shinzo Abe is a smart man and savvy politician. He has the rare honor of being Japan's prime minister twice. He is celebrating his first year of his second (non-consecutive) term in office. In fact, it is on that very anniversary that he…
Retail sales data in the US mean better growth expectations
The data for the holiday season suggest that that consumer spending in the United States remains robust. Though wage growth has yet to pick up, consumer spending remains robust enough to fuel further economic gains into 2014.
Bubbles, debt and economic growth, Paul Krugman edition
We need to abandon the Loanable Funds model of lending, which treats banks as “mere intermediaries” and therefore ignores them in macroeconomics. the Neoclassical belief in Loanable Funds is the biggest barrier there is to the development…
Wynne Godley: Interest rates, growth and the primary balance
Godley shows that under all scenarios, debt/gdp stabilises at some combination of interest rate, growth rate and primary deficit/surplus - provided there is full employment. So debt/gdp does not "spiral out of control" if government…
The unintended consequences of Abenomics on consumers
The danger of Japan's current policy (Abenomics) is that the outcome could turn out to be the exact opposite of what was originally intended. With wages stagnant, these import-driven price increases are hitting the Japanese consumer quite…
France and the Netherlands moving in opposite directions
Europe’s recovery is still uneven. Recent data in France and the Netherlands show one nation with contracting GDP and the other with expanding GDP. When will the recovery begin in earnest?