Money and Finance
- Abe’s Third Arrow, The Second Time Round - By Andrew Smithers
Link to article: Abe’s third arrow, the second time round Abenomics, the term given to the reform package Japanese prime minister Shinzo Abe launched to revive the country’s economy, is based on two myths. One is that the economy has performed...
- Albert Edwards On Japan...
Excerpts from Edwards’ report via ValueWalk: There is a large body of highly respected commentators who dismiss the notion that Japan is bust. My friend, former colleague and Japan guru, Peter Tasker is certainly one of them. In a recent FT article...
- Bridgewater: Spanish Collateral Is Running Out
Via Zero Hedge (I'd love to read the full Daily Observation piece, if anyone has access to it): We estimate that the Spanish banking system only has a few hundred billion euros left in eligible collateral. That means that some of the weaker banks...
- Does Central Bank Independence Frustrate The Optimal Fiscal-monetary Policy Mix In A Liquidity Trap? – By Paul Mcculley And Zoltan Pozsar
Found via Calculated Risk. The United States and much of the developed world are in a liquidity trap. However, policymakers still have not embraced this diagnosis which is a problem as solutions to a liquidity trap require specific sets of policies. There...
- John Mauldin: Kicking The Can Down The Road
How often did we as young kids go down the street kicking a can? “Kicking the can down the road” is a universally understood metaphor that has come to mean not dealing with the problem but putting a band-aid on it, knowing we will have to deal with...
Money and Finance
Albert Edwards: Spain's Bailout Solves Nothing
Going through Japan's lost decade with Peter Tasker was a prequel to our current plight. One of the key differences he had with consensus was on the banks. Consensus believed Japanese banks were at the apex of Japan's economic woes and the main problem. Hence bank recapitalization was seen as the key to turning the economy around.
Peter's view was that although the banking sector was indeed damaging the economy via a credit crunch, the banks were not the problem but a symptom of the problem: the true problem was deflation and the lack of stimulative policies. ...And so it is in the eurozone. The Spanish banking sector is a victim of deflationary policies enacted at the behest of German economic orthodoxy. A bailout will solve nothing.
...Spanish banks need recapitalisation because of the deflationary policies forced on them to reduce Spain's public sector deficit at a time when the private sector is also de-leveraging. Clearly this has a lot further to go and house prices will fall even further as a result.
- Abe’s Third Arrow, The Second Time Round - By Andrew Smithers
Link to article: Abe’s third arrow, the second time round Abenomics, the term given to the reform package Japanese prime minister Shinzo Abe launched to revive the country’s economy, is based on two myths. One is that the economy has performed...
- Albert Edwards On Japan...
Excerpts from Edwards’ report via ValueWalk: There is a large body of highly respected commentators who dismiss the notion that Japan is bust. My friend, former colleague and Japan guru, Peter Tasker is certainly one of them. In a recent FT article...
- Bridgewater: Spanish Collateral Is Running Out
Via Zero Hedge (I'd love to read the full Daily Observation piece, if anyone has access to it): We estimate that the Spanish banking system only has a few hundred billion euros left in eligible collateral. That means that some of the weaker banks...
- Does Central Bank Independence Frustrate The Optimal Fiscal-monetary Policy Mix In A Liquidity Trap? – By Paul Mcculley And Zoltan Pozsar
Found via Calculated Risk. The United States and much of the developed world are in a liquidity trap. However, policymakers still have not embraced this diagnosis which is a problem as solutions to a liquidity trap require specific sets of policies. There...
- John Mauldin: Kicking The Can Down The Road
How often did we as young kids go down the street kicking a can? “Kicking the can down the road” is a universally understood metaphor that has come to mean not dealing with the problem but putting a band-aid on it, knowing we will have to deal with...