The lessons of the crisis of 40 years ago
Andy Lees takes a sceptical view of fiat currency and the excess credit it has created over the past forty years and uses a few charts to demonstrate his points.
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Browsing Tag
malinvestment
Worrying weak macro trends in China, US and Europe
Economic growth warning signs are evident all around in recent data from the US, Europe and China. This should mean negative earnings surprises by Q3 earnings season.
Hoenig: Big banks are fundamentally inconsistent with capitalism
Hoenig, like many Fed leaders from the Reserve banks outside of Washington and the money centers in New York, Boston and San Francisco, is more comfortable with safe and boring banking than the higher risk model that brought the global…
On why Bill Gross supports a job guarantee despite railing against the deficit
Politically, the whole thing looks a lot like Japan. To my mind, the right approach then is to de-emphasize “increasing... borrowing and lending” and re-emphasize increasing jobs and employment. Whether we see work sharing as we see in the…
Roach: Return of the Living Dead
Rather than adding stimulus with the aim of goosing demand to help the economy reach escape velocity, I would say that the central objective of economic policy is to help the economy reach full employment. Doing so will increase demand,…
Gross and Rosenberg: QE3 will see interest rate caps
Yesterday, I indicated that the FOMC has already considered offering unlimited quantitative easing to target specific interest rates during the second round of quantitative easing. I believe the Fed will do this in QE3, and apparently Bill…
Rajan: Easy money will not create sustainable growth
Raghuram Rajan, one of the few mainstream economists to warn of the US housing bubble, has recently written a piece which is highly critical of US monetary policy. His view, one that I share, is that US policy favours debtors over savers in…
Financial Shock and Awe in China
To sum up: Non-performing loans look to be a full 10% of Chinese GDP. That’s high. The Chinese government is confronting this writedown problem head-on. While a number of analysts have opinions on the measures just taken, it is far from…
China: First the credit writedowns, but then what?
The immediate problem is the excess capital investment and the costly maintenance of the projects it has spawned. Longer-term, Asia's growth prospects look good.
More on the China-bearish ‘factor mobilisation story’
There is a difference between economic growth from mere factor mobilisation and economic growth from increased productivity. One requires a lot more capital investment and debt than the other. If and when capital investment growth slows,…