A few important conceptual milestones on the macro front over the past weeks.
First, it’s pretty clear the real economy is now collapsing both due to tight credit as all financial actors deleverage and as a result of a revision in growth expectations such as Keynes wrote so clearly about. Forced liquidity was not enough. An [...]
A week ago the entire family endured the flights from Cuzco to Lima, Lima to Buenos Aires, Buenos Aires to Auckland, and Auckland to Christchurch. 30 hours en route is the time tax we pay in living out here on the edge of the edge; and most of the time it is a worthwhile trade-off.
At [...]
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Posted 08 December 2008
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I’m off to the APEC CEO Summit in Lima, Peru and so in a bit of a rush. So I’ll just dump the good stuff that’s crossing my desk this Monday morning without too much editorial.
In short, I’m looking for signs of de-coupling of the real economy from the financial smoke and mirror factories - [...]
Much discussion on the inter-tubes post the Obama/Dem landslide about the need to get the global economy going and at the same time resolve the clear problems with the de-facto Bretton Woods II arrangement in which the poor emerging economies finance consumption in the rich US, UK and EU.
Martin Wolf does a good job laying [...]
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Posted 06 November 2008
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Tagged: FT
Well, Barack Hussein Obama is in - the 44th President of the Unite States - with a solid Democratic majority in the Congress and the Senate, and the right to appoint 2 or 3 new Supreme Court justices for life. When Ohio voted Democratic for the first time since Lincoln the race was all but [...]
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Posted 05 November 2008
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Tagged: Guardian
In anticipation of my time freeing up in 24 hours or so, here’s some last-minute analysis from the best election site I’ve come across (and they keep on getting better): http://www.fivethirtyeight.com/
McCain, to win, absolutely HAS to win Florida, Georgia, Missouri, Indiana and Montana; and almost certainly both Ohio and North Carolina.
Obama will win if he [...]
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Posted 03 November 2008
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For example, Charles I of England. There is no doubt that cash has been good to hold over the past year, US dollars and yen especially as everyone squared their accounts.
But Morgan Stanley doesn’t believe in deflation, and neither do I.
Although headline prices likely will decline sharply in coming months, underlying inflation over [...]
We’ve moved from the imminent collapse of bank balance sheets and trade credit to the work-out phase, both in the real economy and for the national debt now underpinning the banks.
Tim Duy via Economist’s View says:
Once the deleveraging is complete, foreign investors will realize they are now awash in Dollar denominated assets at [...]
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Posted 30 October 2008
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Kedrosky has a chart of major currencies showing only the Yen is holding it’s own, indeed rising, against the USD over the past two months.
Update, an even better chart:
Brad Setser also notes that this dollar strength was not global investors fleeing to a “safe” currency.
Net TIC flows in August (line 30) were essentially [...]
Greg Ip quantifies the level of intervention thus far, and warns that there could be far more to come.
Before the crisis began, the Fed had $868 billion of assets, 91 percent of them in innocuous Treasury bills and bonds. Now it has $1.6 trillion in assets, with less than 30 percent of them [...]
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Posted 20 October 2008
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Tagged: FT, Guardian