When markets were more agitated than they are today, one source of background worry was the Baltics. The countries went on a debt binge, borrowing heavily from Swedish banks. And while the amounts at issue are hardly earth-shaking by credit crisis standards, there is always the possibility that unexpected knock-on effects could lead to more […]
Read more...Many US commentators blithely asset that the US does not need to worry about the reserve currency status of the dollar, since there is allegedly no ready substitute. Yet those arguments ignore the fact that there has already been movement away from the greenback. The Globe and Mail in early 2008 noted: A UBS Investment […]
Read more...By George Washington of Washington’s Blog. As I have recently pointed out, there are strong arguments for ongoing deflation. But even deflationists think that – after a period of deflation – we might eventually get inflation. For example, in October, I guessed 1 1/2 to 2 years of deflation, followed by inflation. Moreover, noted deflationist […]
Read more...Submitted by Edward Harrison of Credit Writedowns I have been very interested in the concept of legal tender of late because of the revelation this summer that the State of California was issuing I.O.U.’s to honour its debts instead of paying in U.S. Dollars, which are legal tender and I.O.U.’s from the U.S. government (see […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives: One year ago, AIG was brought to the brink of bankruptcy as a result its exposure under credit default swaps (“CDS”) (a form of credit insurance). Asset backed securities and Collateralised Debt Obligations […]
Read more...Served by Jesse of Le Café Américain The peak of foreign capital inflows into the US was clearly seen in the second quarter of 2007, just before the crisis in the US that has rocked its banking system and driven it deeply into recession. Are the two events connected? Had the US become a Ponzi […]
Read more...This idea of China being ahead of the game in anything environment protection related probably strikes readers as ironic, given reports of extensive industrial pollution, such as air pollution on a scale that is changing weather patterns, large scale lead poisoning, and cadmium in the soil. As Forbes commented recently, “China: Where Poisoning People Is […]
Read more...Even though this blog and some others have warned of the vulnerabilty of the greenback to erosion of its reserve currency status, many have dismissed that idea as if it were a lunatic fringe view. Yet pound sterling was once the reserve currency and is no more. Now Pimco has joined the camp of seeing […]
Read more...Gideon Rachman has a pretty gloomy piece in the Financial Times on the lousy state of affairs in the Baltics. Short story, like a lot of places, they went on a monster debt bender and now have an awful hangover. Rachman suggests that Baltic woes could blow back and hurt Europe’s recovery. The trigger would […]
Read more...The headline exaggerates, but not by much. Back in April, a Vanity Fair story about Iceland’s remarkable financial blow up was grist for a Vanity Fair story by Michael Lewis, “Wall Street on the Tundra“. The quick version is that Icelandic men were not merely reckless, that is such a common male pathology as to […]
Read more...Served by Jesse of Le Café AméricainSome controversy was triggered over a line of questioning this morning during Ben Bernanke’s testimony before Congress, as reported on some of the top financial blog sites Zerohedge and Naked Capitalism. We read them both daily and are often envious of the depth and breadth of their expertise. Congressman […]
Read more...Ambrose Evans-Pritchard, who has been consistently alarmed about Europe (and often charged in comments of going overboard in general, and on this topic in particular) sounds a particularly loud alarm on Europe, based on the view that the ECB has not eased enough. I have limited insight here. I have been told that German banks […]
Read more...Lordie, is the media incapable of doing anything more than writing up official remarks? This is the latest headline, the lead story on the Bloomberg home page right now: Dollar Gains as China Says ‘Not Aware’ of Reserve Currency Talk That is a very curious remark, given that the central bank, a mere week ago, […]
Read more...If Alan Greenspan were serious about rehabilitating himself, he could hire himself out to central banks and instruct their officials in the art of Looking Serous and Appearing to Say Important Things While Actually Communicating Nothing. This is a crucial skill for anyone in an important bureaucratic position. The Chinese could use a few lessons. […]
Read more...The optimists that have long assumed that the dollar will continue to reign supreme due to lack of alternatives have just have their sanguine views challenged as China threw down the gauntlet on coming up with an alternative, non-country-specific, reserve currency. The US in fact had this option at the time of Bretton Woods and […]
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