Europe

Angela Merkel, the German Chancellor has rebuked the United States for its easy money policies, suggesting it was kicking the can down the road and setting up a greater problem later. It is high time the debate about monetary policy made…

Just a few moments ago I caught a very interesting post on Alice Cook's site UK Bubble. The gist of the post was that things are falling apart in Ireland very quickly. Given what we saw with Iceland, I have to ask: is Ireland next? I…

Jon Danielsson has a very thorough piece up on the VoxEU site which details the catastrophic collapse of Iceland and its banking system. This is a cautionary tale on two fronts. First, Iceland was a small country with a very large…

Last night an article by Niels Jensen of Absolute Return Partners caught my eye. In it, he made a very strong case for worrying about European bank exposure to emerging markets and its potential for creating systemic risk. I would like to…

By now, you are familiar with the carry trade, where one borrows in one's own currency in order to invest in higher yielding foreign assets, often times with significant leverage. The Japanese were famous for making this trade in…

In the last few weeks, the currency market is where the action has been. We have witnessed massive moves in every major currency and in some not so major ones. To my mind, all of this is a prelude to some sort of currency crisis. This…

While I am markedly more upbeat of late about economic matters, I still harbor some deep concerns about the direction of both the global economy and resultant political stability. The Washington Post columnist Anne Applebaum has summed…

Credit markets continue to return to less extreme levels. While we are nowhere near where we were before the onset of the Lehman-induced panic, we are well off the panic levels of the worst of the crisis.The Times of London is reporting…

Yesterday, I made the case for us to be less concerned about the U.S. and even Western Europe, but to be very concerned about a slowdown in Asia. The reasons for this are simple: most analysts now understand the extent of problems in the…

The European Union has finally shown that it can get Europe-wide crisis initiatives of significance passed. Not only many EU countries guarantee bank deposits, but now bank borrowing has been backstopped as well. At first blush, this…