Category Archives: Globalization

Greece Rescue Collides With the Policy Trilemma

A fair number of policy commentators are hewing to the view that somehow the EU will cobble together some sort of solution to the Greek fiscal mess because the alternatives look vasty worse. As Paul Krugman noted: Now what? A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As […]

Open Source Inquiry Opportunity: Some of Goldman’s Greece Swaps Made Public

In a New York Times op-ed late last year, Bill Black, Frank Partnoy, and Eliot Spitzer called for an open source investigation: we know where the answers are. They are in the trove of e-mail messages still backed up on A.I.G. servers, as well as in the key internal accounting documents and financial models generated […]

Can Eurobanks Take a Greek Default?

The markets did not react well to the Friday combo plate of weaker than expected European growth, Chinese tightening ahead of the anticipated schedule, and less than convincing remarks regarding what if anything the EU intends to do about its little looming sovereign debt crisis. And top it off by having Greece PM Papandreou launch […]

Das: “Trading Places”

By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives False Economy: A Surprising Economic History of the World by Alan Beattie Misadventures of the Most Favoured Nations: Clashing Egos, Inflated Ambitions, and the Great Shambles of the World Trade System by Paul […]

Devaluing Currencies May Not Be Such a Great Economic Cure After All

Reader Swedish Lex points out an important implication of a recent VoxEU post on the Nordic economic model and how it fared in the crisis: The Nordic countries – Denmark, Finland, Iceland, Norway and Sweden – are champions of free trade and open markets… The Nordics have all had different monetary regimes since the euro. […]

Germany Backs Greek Rescue to Save German Banks (Update: Germany Says No Decision Made)

Equities and commodities markets rallied on the belief that Greece would be rescued, and that notion is increasingly looking accurate. The Telegraph provides an update (hat tip Swedish Lex): Wolfgang Schäuble, Germany’s finance minister, has asked officials to prepare a plan in time for a summit of EU leaders on Thursday, according to reports in […]

Is Greek Crisis a Precursor to a “Global Margin Call”?

Two readers, Don B and Marshall Auerback, pointed to a Ambrose Evans-Pritchard story at the Telegraph which argues the the sovereign debt perturbations have the potential to have ramifications as serious as the subprime/Alt-A crisis. Now Evans-Pritchard has a tendency to the apocalyptic, but he also made some astute calls in 2007 and 2008 (as […]

Are Greek Sovereign Debt Tremors a Start of a New Phase of the Crisis?

After the months of buoyant markets, a return to crisis-type headlines seems troublingly familiar, even though the perturbations of the last day or so are a pale shadow of the worst months of the crisis. And some are making the bull case. For instance, a headline at Clusterstock trumpetss, “Yesterday’s Bloodshed Sent The VIX Soaring […]

Rosner: “Has the New York Fed been serving the public trust? Has Geithner?”

By Joshua Rosner, a managing director of an independent financial services research firm who writes for New Deal 2.0 In Geithner’s AIG testimony before the House Oversight Committee, the Secretary again tried to sell the notion that ‘if we didn’t act then, millions more would have lost their jobs and thousands of factories would have […]

Obama Snubs EU

And after those nice Europeans gave Obama that peace prize! (well, the Nobel foundation provides the funding, Norwegians make the pick, dunno how EU members felt). From the Financial Times: President Barack Obama will not attend a European Union-US summit to have been held in Spain in May, dealing a further blow to the EU’s […]

Ambrose Evans-Pritchard: Apocalypse 2010

Ambrose Evans-Pritchard is nothing if not decisive in his views, and has a undisguised fondness for the bearish perspective. But he was correct on the 2008 inflation/commodities headfake, saying repeatedly that deflationary forces would prevail when that was decidedly a minority view. He is also a Euro-skeptic, and I’m less comfortable with that position. The […]

“Reviving Confidence in the American Economy – China, Investment and the Deficit Hawks”

By Robert Johnson, former chief economist of the Senate Banking Committee and Senior Economist of the Senate Budget Committee who writes at New Deal 2.0. Since the early 1980s, rises in the living standard of middle class United States citizens have not kept up with the gains in labor productivity. Wages in the middle class […]

Calls For Protectionist Retaliation Against China Rise

What is truly remarkable about two comments in the last two days in the august Financial Times, is that they both say protectionism against China is likely. One actually urges it, the other pretty much says it’s a-comin’ unless China mends its ways. And both pieces were written by reputable economists, the last people you’d […]

The China Decoupling Myth?

One of the motherhood and apple pie items in econ-land is that the world needs global rebalancing, which is code for China has to stop being a mercantilist and currency manipulator, and the US has to quit borrowing a ton and overconsuming (or underproducing, which is another way to frame the same problem). But once […]