credit

I just wrote a post for Credit Writedowns Pro on the regional government problems in Spain. The following chart from El Pais is useful in that context.

I don’t want to be too glib here. I recognize that policymakers are in an extremely difficult position and that there is no longer any easy solution, but railing at the markets rather than trying to understand why they are doing what they…

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,…

Scott Barber of Reuters shows us with the chart below that over the last 30 years bad debt in Spain has tracked unemployment and moved inversely with GDP growth. The higher the percentage of doubtful loans is, the lower GDP growth and the…

the ECB decided to prop up the German economy with low interest rates, rates that produced negative real interest rates and housing bubbles in Ireland and Spain. This was a policy designed to "bail out" the indebted German economy. We…

I would submit then that the problem is the debt. This is true right across the developed economies. Until the debt is reduced, global growth will be slow and that makes economies susceptible to recession. As much as the President wants to…

This is a belated commentary for Friday. I have a lot of links on the global growth slowdown today but I covered this earlier saying Weak global economic data signal likelihood of global recession. I wanted to highlight Marshall Auerback's…