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 [...]
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 [...]
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 [...]
A team of biologists and chemists is closing in on bringing non-living matter to life.
A lab led by Jack Szostak, a molecular biologist at Harvard Medical School, is building simple cell models that can almost be called life… Szostak’s protocells are built from fatty molecules that can trap bits of nucleic acids that [...]
The FT reports that the emerging market theme is getting a bit stale among foreigners; outflows from emerging markets bond and equity funds reached $29.5bn over the past three months, the highest level since at least 1995. This was the Asia investment trigger I was personally looking for since August 2007, but jumped the gun [...]
Clearing out some of my macro notes; still keeping an eye on the banks, specifically their leverage, capitalisation and lending activity. The score so far: $501bn in write-downs, $353bn in new capital. Still $150bn worse off in terms of ability to weather further shocks than when this started. Kedrosky comments on the decreasing half-life of [...]
Brad Setser thinks that China is back to holding the RMB down to maintain export volume in the face of softening global demand. From the comments:
China prefers subsidizing US consumption of Chinese goods to subsidizing Chinese consumption of Chinese goods… if China’s foreign asset accumulation continues at $800b a year, it will add [...]
Thinks aren’t all that rosy outside in the OECD either.
Mortgage approvals for home purchases in June fell to 36,000, according to the Bank of England—a third of what they were a year ago… One reason is that house prices are down about 9% from their peak in October 2007…
Prices dropped in [...]
The housing-rescue legislation passed by the House and Senate offers emergency funding to Fannie Mae and Freddie Mac along with establishing a $300 billion fund to help struggling homeowners… and now bond investors are again snapping the portfolio up because of the combination of high yields with a government guarantee,
“We like it,” said [...]