US small and medium-sized banks hit by interest rates
According to an analysis by Reuters, small and medium-sized banks in the US have started to take on risk as the squeeze in net interest margins is beginning to hurt profitability. The goal is to boost...
View ArticleThe changing debate over China’s economy
By Michael Pettis Once again I apologize for taking so long to repair my blog, but it hasn’t been easy. We are slowly fixing up the mess on my website. There will be a link on the site directing...
View ArticleClik here to view.
Not all government deficits are created equal
By Lance Roberts I recently posted some thoughts on “The Most Dangerous Line Uttered During The Debt Ceiling Debate” in which I discussed the idea of having to increase the government’s debt limit in...
View ArticleOn secular bear markets and more on the primacy of monetary policy
Just after I posted today, I ran across two posts from March that I wrote on government and private debt that are related to theme of today’s commentary on potential housing bubbles in Germany and...
View ArticleThe Fed confirms its move to forward guidance and permanent zero
Today’s commentary Recently, I wrote a series of posts predicting that the Fed would give up on QE and move toward forward guidance in order to be able to normalize policy. Nevertheless, I have also...
View ArticleQE is not inflationary, but is it deflationary?
By Frances Coppola I’ve suggested previously that QE could actually be deflationary. I looked at it from several perspectives – collateral effects, the monetary transmission mechanism, distributive...
View ArticleWill debt derail Abenomics?
By Michael Pettis It seems to me that one of the automatic, if not always intended, consequences of Abenomics is to force up Japan’s current account surplus, and in fact to force it up substantially....
View ArticleClik here to view.
Malinvestment and the endogeneity of money
By Frances Coppola So much has been written about the endogeneity of money that I thought it was now widely accepted. But recent exchanges have shown me that people STILL aren’t getting it. Most...
View ArticleA country breakdown as global growth accelerates: Italy, Spain, Greece, Japan
Today’s commentary My contention has been that global growth is accelerating. Backing that up, yesterday I looked at four economies where growth has been good. Only in Sweden were we seeing renewed...
View ArticleThe impact of reform on growth in China
By Michael Pettis I got a lot of feedback from my January 5 blog entry because of my argument that the implementation of the reforms proposed in the Third Plenum all but guarantees that growth rates in...
View ArticleIncentives matter in resource allocation
By Frances Coppola “Rule number one in economics: incentives matter”. So says Tim Worstall, in this post criticising me for claiming that state investment is not necessarily any less efficient than...
View ArticleMarc Faber: China’s Malinvestment Unwind ‘Will Be a Disaster’
Marc Faber appeared on Bloomberg Television yesterday to discuss the Chinese economy. While Faber generally seems to be a long-term bull on China, he had some disquieting things to say about the extent...
View ArticleEconomic and market themes: 2014-05-16 China
I had intended to write the usual multi-country post today but because I have so much on China, I am going to focus there exclusively today. The Chinese property bubble is bursting Chinese wage...
View ArticleThe Economy in the United States and the United Kingdom
Quick note here on the US and the UK to change things up a bit from the Cyprus obsession. The most in-depth research and analysis is on Credit Writedowns Pro. The Economy in the United States and the...
View ArticleEconomic and market themes: 2014-03-21
Sanctions because of the Crimean crisis have had less economic impact than private portfolio preference shifts. However, as Ukraine moves into the EU sphere, further actions against Ukraine could be...
View ArticleThe Chinese credit crisis gets messy
No one has denied that China was overdue for a credit shakeout due to the Chinese government’s desire to stem excess credit growth as the economy rebalances. The question has always been about how much...
View ArticleEurope on the mend and China decelerating
The Euro area composite PMI rose to 54.0 from 53.1, making it unlikely that the ECB will move against deflation in May The Chinese HSBC/Markit flash manufacturing PMI was up to 48.3 from 48.0. However,...
View ArticleClik here to view.
The Fed model and shocks to the price of credit (wonkish)
What if the Fed Model is wrong? Perhaps it's the change in the level of interest rates that matters, not the level. So irrespective of how high interest rates are, if the change, the delta, is large...
View ArticleClik here to view.
Central banks, interest rates, house prices and resource allocation
A couple of weeks ago I told you about two properties in London that I was familiar with as background for my post on house price inflation in the UK. What was clear from those two examples and dozens...
View ArticleClik here to view.
Tail risk zero bound dynamics are driven by credit risk, not interest rates
This is my third post on tail risk now. I think the continued and broadening market volatility we have seen across asset classes in the last few months is a sign of increased tail risk and i wanted to...
View Article
