debt

The following is the rationale for the ratings action Standard and Poor's took earlier today in downgrading the sovereign debt ratings of Spain Overview     -- The deepening economic recession is limiting the Spanish government's policy…

By Michael Pettis I recently “debated” twice with senior Chinese officials on the future prospects for China. In both cases they made the argument that Chinese growth rates were going to rise in the next few years and that the current deep…

By Andrew G Haldane, Executive Director, Financial Stability, Bank of England There is a long list of culprits when it comes to assigning blame for the financial crisis. This column argues economists are among the guilty, having succumbed…

By Marc Chandler The Bank of Japan did not disappoint and joined the ECB and Federal Reserve in taking new and non-traditional measures.The BOJ did practically everything that we outlined yesterdayand justified its move by downgrading its…

By Michael Pettis In the last issue of my newsletter much of the first half was dedicated to a discussion of recent events in Spain and Italy and why they reinforce the argument that several countries will be forced to leave the euro and…

And going beyond April, the political arithmetic of a post Monti government looks complicated, making the kind of stability needed to advance what the population may well see as “harsh” reforms unlikely. In other words, as Monti says, when…

We have reached end-of-paradigm – the final failure of microeconomics masquerading as macro. The solution, the new macro paradigm, requires monetary literacy and numeracy. And this can only be achieved by removing the conceptual blinders by…

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…

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…