credit cards

A study of European banks by the consultancy Price Waterhouse Coopers is making the rounds in the German-language press. I haven't seen the study itself but it is communicated by PwC in Frankfurt earlier today. Hence the interest in…

Here's a good video from the Tech Ticker guys showing us that the opaque nature of asset-backed securities is catching up with Wall Street again. This is now becoming a problem in the credit card industry.

Daily commentary Since I have a decent amount of links, I thought i would do a special Sunday daily commentary. The issue I wanted to highlight is credit and how it gets created. At some point I may make a longer version of this to flesh…

Liberalizing interest rates means that those sectors of the economy who have benefitted from very low lending rates – SOEs, local and municipal governments, real estate developers, and other large borrowers – are likely to find many reasons…

The real solution has nothing to do with the Fed because the constraints are demand side and not supply side. But people will continue to exhort the Fed to do more and so they will do more.

Perceptions have certainly changed a lot in the last few months. As recently as three years ago there were so few analysts who were skeptical about the sustainability of Chinese growth that we rarely disagreed among ourselves. Now, however,…

If you look at the rate of growth in credit, it tells you something. When it hits an inflection point i.e. when credit growth peaks and begins to decelerate, investors should take it as a harbinger of declining GDP and a signal to shift…

Australian house prices peaked in June 2010. The motive force behind Australia’s bubble was the same as in the USA and Japan: accelerating debt drove rising house prices during the boom. Now in both those countries, decelerating debt is…

Collapsing credit demand ultimately leads to a loss of banking capital, which is the exact opposite of what the LTRO program was set up to achieve. Interestingly, as the charts below show, banks seem to think that there will be a slowing of…

I caught this statement from Alan Blinder in a debate on the New York Times about teaching economics. Clearly, Blinder sees a huge financial crisis and reflexively understands changes must be made.