asterisk2a + balancesheet   36

Russian debtors despair as boom turns to bust - BBC News
Millions of Russians took out loans during the economic boom years, but now they face crippling debts and the law is not on their side, the BBC's Oleg Boldyrev reports. [...] The Russian Central Bank says those chronic debts now total 1tn roubles (£10.7bn; $16.7bn). And that is at least 10% of the total personal debt - 10% which cannot be recovered by the banks. [...] "We were a bit stupid," Elena says. "They told us the minimum payment was 5,000 roubles a month and we paid that every month. But that was just the interest, not the loan itself." [...] [ moral of banks - make new loans (performance) vs prudence (and being a bit more conservative) to deny one person a loan just to see them off at another bank where they will get the loan and that rep getting his bonus, and you not. ] [...] After the good years many Russians are now getting a harsh lesson in capitalism - and inadequate regulations mean there is nothing to soften the blow.
Russia  sanctions  debt  servitude  debtoverhang  balancesheet  2015  NPL  financial  literacy  bankruptcy  insolvent  Insolvenzverschleppung  insolvency  moral  beliefs  bonuses  bonus  financial  incentive  incentive  zombie  banks  banking  crisis  investment  management  regulation  self-regulation  regulators  crony  capitalism  oversight  Bank  long-term  view  long-term  thinking  capitalism  Wall  Street  profit  maximisation  shareholder  value 
july 2015 by asterisk2a
Five Years After Lehman, BIS Ex-Chief Economist Warns "It's Worse This Time" | Zero Hedge
The share of "leveraged loans" or extreme forms of credit risk, used by the poorest corporate borrowers, has soared to an all-time high of 45% - 10 percentage points higher than at the peak of the crisis in 2007. + http://www.zerohedge.com/news/2013-09-14/record-high-grade-leverage-means-pik-toggle-lbo-debt-back-and-worse-ever // The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over www.zerohedge.com/news/2013-06-23/bank-international-settlements-warns-monetary-kool-aid-party-over ""central banks must head for the exit and stop trying to spur a global economic recovery... cheap and plentiful central bank money had merely bought time, warning that more bond buying would retard the global economy’s return to health by delaying adjustments to governments’ and households’ balance sheets." http://www.telegraph.co.uk/finance/10310598/BIS-veteran-says-global-credit-excess-worse-than-pre-Lehman.html
unemployment  employment  monetary  policy  Mark  Carney  ope  reflation  zombie  banks  monetary  transmission  mechanism  BOE  banking  crisis  carmenreinhart  BOJ  LBO  balancesheet  policy  folly  QE  liquidity  2013  fiscal  policy  UK  debt  monetisation  political  error  unknown  unkown  greatdepression  zombie  consumer  deleveraging  debt  monetization  Richardkoo  centralbanks  liberal  economic  reform  faultlines  GFC  monetary  theory  exuberance  MarioDraghi  unintended  consequences  global  economy  monetary  stimulus  Help  to  Buy  Scheme  liquidity-trap  zombie  corporations  ECB  monetary  system  political  folly  benbernanke  bank  crisis  Abenomics  rebalancing  China  greatrecession  policy  error  productivity  LTRO  NIRP  OMT  Fed  communication  economic  history  Super  Cycle  stagflation  leverage  KennethRogoff  sovereign  debt  crisis  recovery  unconventional  monetary  policy  ZIRP  USA  BIS  POMO  Funding  for  Lending  Scheme  corporate  governance  fiscal  deficit 
september 2013 by asterisk2a
Lest We Forget | ZeroHedge
The view of the ECB raises some interesting questions. I believe most would agree on two issues; first that the ECB is an insolvent institution and so highly leveraged and under-capitalized that a normal bank would have been in bankruptcy long ago but then a normal bank can’t print money. However it must also be said that the ECB is not a stand-alone institution living on another world and that the national central banks of Europe own it. Second I think most thoughtful people would agree that at some point in time that the financial condition of a central bank matters either in terms of increasing inflation by increasing the money supply or as a matter of valuation if no one or not enough financial institutions will support their currency or if some national central bank opts out on the basis of the economic threat to its citizens. This could be exemplified by Germany.

... The game could end if a major European bank falters
... Loss of Trust = Out of Bonds/Equity - into Gold&Co;.
Jens  Weidmann  Mark  Grant  operationtwist  QE3  QE2  OMT  SMP  greatrecession  GFC  unintended  consequences  Fed  ZIRP  QE  Gold  toobigtofail  confidence  trust  bank  crisis  banking  crisis  debt  monetisation  monetization  PIIGS  sovereign  debt  crisis  Europe  Germany  Bundesbank  MarioDraghi  economic  history  monetary  theory  monetary  policy  balancesheet  accounting  ECB 
october 2012 by asterisk2a
ECB balance sheet tops EUR 3 trln for the first time | ForexLive
Balance sheet 31% larger than the German economy
Balance sheet 33% bigger than the Federal Reserve’s balance sheet

At some point, when the halo-effect surrounding the LTRO diminishes (as sovereign debt pressures return), the size of the balance sheet will weigh on EUR/USD sentiment the way QE1 and QE2 weighed on the dollar.
unintended  consequences  unin  QE  balancesheet  monetary  policy  SMP  2012  LTRO  ECB 
march 2012 by asterisk2a
ECB Decision ... 9th Feb 2012 | ZeroHedge
'transitory' nature of temporary non-standard measure; easing collateral demands (will now accept credit claims) to avoid credit crunch in Europe and help refinance banks (roll over of existing debt, new capital requirements (EBA) & risk aversion)

Simply proves that Europe is running out of any money good assets to pledge to the ECB as "collateral."

DRAGHI NO LONGER SEES `SUBSTANTIAL' DOWNSIDE ECONOMIC RISKS
DRAGHI SAYS IMPACT OF LTRO ON BANK FUNDING IS STILL UNFOLDING
DRAGHI SAYS ECB WILL REVIEW COLLATERAL SITUATION IN 6 MONTHS
DRAGHI SAYS ECB `CONCERNED' ABOUT SLOWING DOWN IN CREDIT
DRAGHI SAYS BNK LENDING SURVEY DOESN'T FULLY REFLECT LTRO
Draghi Says ECB Will ‘Take More Risk’ on Collateral
DRAGHI SAYS TALK ABOUT ECB SHARING LOSSES `IS UNFOUNDED'

http://www.zerohedge.com/news/ecbs-collateral-pool-expansion-%E2%82%AC71-trillion-imminent-trash-cash-increase-its-balance-sheet

"Loss on Balance sheet holdings is monetary financing of Europe." Draghi
Target2-System discussed minute 47.
target2-system  monetization  SMP  EBA  Europe  creditcrunch  QE  ZIRP  LTRO  balancesheet  collateral  MarioDraghi  2012  monetary  policy  ECB 
february 2012 by asterisk2a
Repairing the Global Plumbing - Mohamed A. El-Erian - Project Syndicate
Unfortunately, the economic outcomes have come nowhere close to matching the intensity of these efforts. Effectively, the central banks have been unconventional bridges to nowhere, owing mainly to their imperfect tools and other government agencies’ inability or unwillingness to act. At some point – and we are nearing it – bridges to nowhere become a standalone risk: they can topple over.
politics  folly  growth  Portugal  Greece  haircut  UK  USA  Europe  crisis  debt  sovereign  GFC  2012  recession  balancesheet  richardkoo  liquidity-trap  liquidity  LTRO  BOE  Fed  ECB  policy  fiscal  monetary 
january 2012 by asterisk2a
Mark Blyth on Austerity - YouTube
Fallacy of composition.

Who is footing the bill of the GFC!? And the mistakes of the past?!
debt  private  public  inequality  occupywallstreet  class-warfare  politics  OECD  history  economics  GFC  austerity  deleveraging  richardkoo  recession  balancesheet 
january 2012 by asterisk2a
ECB's Balance Sheet Now Far Bigger Than Fed's, More Levered Than Lehman, PIIGS Exposure Up 50% In 6 Months | ZeroHedge
Bloodmberg chart of the day shows, the ECB's balance sheet is not only far greater than the Fed, at $3.2 trillion compared to $2.9 trillion for Ben Bernanke, but at 30x leverage, has the same risk as Lehman did at its peak.

“The ECB is providing liquidity and confidence to the banking system, yet all the while its own leverage and balance sheet size is hitting new highs. It seems likely that the market will begin to watch the rising leverage with interest and growing concern."

"Through its government bond buying and liquidity provision to banks, we estimate that the ECB’s exposure to weaker eurozone economies has now reached €705bn, up from €444bn in early summer – an increase of over 50% in only six months, raising fresh questions about its credibility, independence and possible losses it may face in the case of future sovereign defaults."
PIIGS  solvency  Europe  creditcrunch  liquidity-trap  liquidity  QE  SMP  leverage  2011  balancesheet  Fed  ECB 
december 2011 by asterisk2a
The War on Wages in the West - YouTube
Dr. Heiner Flassbeck: If wages don't rise and the "pathological" power of finance is not pushed back, we will face a deep depression

-------------

Are we in a stage of Great Pain, where the Global Economy realigns, gets leveled.
On each side something gotta give, ... inflation in Emerging and Frontier world and deflation, stagnation in the developed world.

With hindsight ... in 20 years, things will be clearer.
sovereign  bubble  debt  recession  balancesheet  richardkoo  UK  Japan  economic-thought  fiscal  policy  competitiveness  productivity  Europe  USA  history  economic  debtoverhang  stagnation  deflation  income  wages 
december 2011 by asterisk2a
Sweden Revamps Central Bank Tool Kit on Crisis - Bloomberg
The crisis has demonstrated that central bank models don’t take financial system risks properly into account, Ingves said, adding that it’s necessary to design econometric models that better catch the dynamics of the global economy.

Federal Reserve Chairman Ben S. Bernanke last month signaled he also may be changing his view on the degree to which asset prices should be incorporated in monetary policy, a tool he in 2002 deemed “far too blunt” to prevent bubbles. “The possibility that monetary policy could be used directly to support financial stability goals, at least on the margin, should not be ruled out,” Bernanke said on Oct. 18 in a speech in Boston.
GFC  financialcrisis  financialmarket  centralbanks  lesson  economics  model  academia  academics  monetary  policy  tools  error  folloy  monetarism  leverage  deleveraging  Riksbank  ECB  Fed  balancesheet  QE  reform  history 
november 2011 by asterisk2a
So let me get this straight | ForexLive
The US has spent approximately $4.5 trln in stimulus while more than doubling the Fed’s balance sheet in the last three years. But the economy continues to struggle, just as the Japanese economy continues to struggle ten years after the government there deployed similar tactics (and still deploys them to this day…)So why in the world would the president demand a joint session of Congress to unveil a tiny $300 bln package of proposals to try and move the needle on a $14 trln economy?Are you kidding me?Einstein’s definition of insanity is repeating the same activity again and again and expecting a different result. Clearly, the government and the Fed are insane…Sometimes doing nothing is the best policy. This might be one of those times…The die is cast; the consumer is tapped, tinkering at the margin may move polls for a short while but it won’t move the economy.
balancesheet  recession  richardkoo  USA  japan  history  lesson  2011  lostdecade  presidency  barackobama 
september 2011 by asterisk2a
Bernanke Turns Timid in Krugmans View - Bloomberg
“I think Bernanke’s definition of the long run is ‘after all this nasty stuff is behind us’” Krugman said in an e-mailed response to questions. “And similarly for Fed policy. So the speech was basically saying that in the long run we don’t matter, and in the short run, which could be pretty long, not our problem.”On his New York Times blog after the speech, Krugman quoted John Maynard Keynes: “This long run is a misleading guide to current affairs. In the long run we are all dead.”
JacksonHole  2011  greatrecession  recovery  Fed  monetary  fiscal  policy  USA  Japan  lostdecade  paulkrugman  QE  stimulus  reform  ZIRP  history  liquidity-trap  balancesheet  recession  richardkoo  debtoverhang  debt  sovereign  crisis 
august 2011 by asterisk2a
Ben Bernanke realised printing yet more money would look desperate - Telegraph
The reality is QE has already done an awful lot of damage. America has expanded its base money supply three-fold in two and a half years – from 6pc to 18pc of national income. But even this jaw-dropping measure hasn't led to much of an expansion in monetary measures, such as M2 that include bank lending, precisely because the banks, for all the propaganda to the contrary, are still determined not to lend. They can make more money simply channelling QE money into stocks and other investments.Crucially, the banks also remain petrified of counter-party risk in the inter-bank market. Many of them, disgracefully, are still concealing vast sub-prime losses in off-balance-sheet vehicles. So they assume other banks are doing the same. Such mistrust between the banks – "we're lying, so they must be lying" – gums up the wheels of finance and starves even creditworthy firms of the funds needed to invest and create jobs.

zombi banks - same as japan +10 years ago.
transparency  Fed  benbernanke  2011  JacksonHole  QE  QE3  QE2  quantitative  easing  ZIRP  M2  moneysupply  monetary  policy  inflation  deflation  USA  UK  monetarybase  interbank  LIBOR  trust  confidence  toxicassets  subprime  zombi  banks  company  capitalism  fiatmoney  politics  barackobama  presidency  GeorgeOsborne  davidcameron  greatrecession  recovery  lostdecade  Japan  balancesheet  recession  richardkoo  deleveraging  debtoverhang  sovereign  debt  crisis  centralbanks  trichet 
august 2011 by asterisk2a
Relax, central banks can still save us - Telegraph
Military demobilisation allowed an instant cut in the US budget deficit. Today the rot is structural, a failure to stop health care and ageing costs spiralling out of control.

The eurozone obviously needs looser money. M3 broad money is stagnant and real M1 deposits have turned negative, even in Germany and Holland. Real M1 is contracting at an alarming pace in Italy. EMU growth has wilted, five countries are spinning towards default, and the banking system is seizing up. This cries out for a change of course, yet the European Central Bank is still tightening.
USA  debtoverhang  deleveraging  balancesheet  recession  greatrecession  GFC  depression  history  paulkrugman  sovereign  debt  crisis  ECB  monetary  policy  supply  M1  M3  velocity  money  creditcrunch  error  folly  benbernanke  trichet  2011  August  JacksonHole  lesson  greatdepression  fiscal  austerity  europe  UK  presidency  barackobama  davidcameron  angelamerkel  sarkozy  GeorgeOsborne 
august 2011 by asterisk2a
Euro Traders Put Trust in Trichet as Merkel, Sarkozy Disappoint on Bonds - Bloomberg
Unlike the Federal Reserve, the ECB mops up the extra currency it creates through a program known as sterilization. It does that by auctioning seven-day term deposits from banks. The Fed’s $2.35 trillion in bond purchases, known as quantitative easing, went unsterilized, inflating the supply of dollars.
Fed  ECB  Sterilization  monetization  QE  2011  sovereign  debt  balancesheet  QE2  PIIGS  Euro  bailout 
august 2011 by asterisk2a
Bob Janjuah: Euphoric In The Short-Term, Apocalyptic In The Longer | zero hedge
The only way DM (and EM) policymakers have been able to deliver even barely acceptable trend growth has been through the use of unsustainable policies which put short-term gains first but which clearly create huge longer term risks to sovereign credit quality and which leave a deeply negative scar in the minds of the private sector, which is attempting to de-lever and which knows it is facing the mother of all tax liabilities going forward. The reality is that absent a private sector debt binge (the private sector is not that stupid) and assuming we are coming to or are at the end of the line with respect to policy, then DM trend growth over the next 3/5 years will be in the 1-1.5% range.
economics  deleveraging  sovereign  debt  bubble  PIIGS  USA  Europe  China  policy  folly  economy  balancesheet  recession  recovery  2011  outlook 
july 2011 by asterisk2a
YouTube - ‪Dalton Doubts Public Appetite for More Fed Stimulus‬‏
Fed targeting asset prices, ... higher asset prices does not mean people will spend.
Asset prices do support bank balance sheets, as in form of capital holdings, thus in form of lending capacity,
but if nobody want to borrow, nothing to lend to.
balance sheet recession richard koo
deleveraging process still ongoing in private space
and in parts of real world govs - uk austerity
Fed  monetary  policy  doubt  benbernanke  2011  QE3  ZIRP  economics  economy  401k  richardkoo  balancesheet  recession  recovery  greatrecession  deleveraging 
july 2011 by asterisk2a
Corporate Cash Con - NYTimes.com
And now trickle-down economics — specifically, the idea that anything that increases corporate profits is good for the economy — is making a comeback.
On the face of it, this seems bizarre. Over the last two years profits have soared while unemployment has remained disastrously high. Why should anyone believe that handing even more money to corporations, no strings attached, would lead to faster job creation?the evidence strongly says that the real reason businesses are sitting on cash is lack of consumer demand. In any case, if corporations already have plenty of cash they’re not using, why would giving them a tax break that adds to this pile of cash do anything to accelerate recovery?
- indeed

Big business already has the money it needs to expand; what it lacks is a reason to expand with consumers still on the ropes and the government slashing spending.
paulkrugman  USA  recovery  recession  greatrecession  2011  corporate  cash  unemployment  GDP  assessment  balancesheet  richardkoo  lostdecade  sovereign  debt  public  private  debtoverhang 
july 2011 by asterisk2a
How Capitalism Went On A Brief Sabbatical Which Became A Permanent Vacation: Rosenberg Explains "The Artificial Recovery" | zero hedge
The WSJ emphasizes the implications of the on-going deleveraging cycle on the front page of today's paper — Debit Hamstrings Recovery. It is so obvious that as much as the government tries to slow the process, it cannot prevent the private sector from healing itself after decades of tremendous credit excess. U.S. consumers have 30% more credit card and other revolving debt on their balance sheet than they did just a decade ago. While outstandings are down 6% from the peak, there is still considerable contractions to go before household debt levels revert to the mean relative to both income and assets. 

--
and Fed does QE and ZIRP to stop asset deflation, contraction. as it fears deflation bc with shinking assets size, less loans can be given out as one of the size of the banks balance sheets shrink (capital form). and less loans means less business development and new jobs in form of new business ... so the thinking.
deleveraging  USA  debt  balancesheet  recession  richardkoo  QE  ZIRP  reflation  deflation  deflationary  Fed  2011  benbernanke 
june 2011 by asterisk2a
BIS: interest rates too low | City A.M.
INTEREST rates are too low in developed economies, risking a dangerous price instability and market distortions, the Bank of International Settlements (BIS) declared yesterday.

 abnormally low rates “risk creating serious financial distortions, misallocations of resources and delay in the necessary de-leveraging” in advanced countries.
Unusually, BIS singles out the Bank og England for its loose monetary policy in the face of inflation that is more than double its two per cent target.
Bank of England: “One wonders how long its current policy can be sustained.” The report shows that combined with interest rates of 0.5 per cent, Britain has a negative real interest rate of minus four per cent, lower than that of the US, the Eurozone and Japan.
the Bank of England that its lack of control over commodity prices, which are driving inflation, means that raising rates won’t help.
“extraordinarily loose monetary policy” is boosting commodity prices because a “search for yield”
ZIRP  unintended  consequences  bubble  BOE  BOJ  Fed  ECB  recovery  monetary  policy  2011  greatrecession  creditcrunch  liquidity-trap  liquidity  reflation  reflate  balancesheet  recession  commodities 
june 2011 by asterisk2a
Bernanke May Face Self-Induced Paralysis - Bloomberg
As a Princeton University professor, Ben Bernanke castigated the Bank of Japan in 2000 for a “case of self-induced paralysis” that led to a decade of stagnation. Now, the Federal Reserve chairman may be allowing the U.S. central bank to fall into the same trap after its second round of quantitative easing ends this month.By all but ruling out another cycle of bond purchases, Fed officials have left themselves with little in the way of policy options to respond to slowing growth and rising unemployment. This raises the risk that the U.S. will remain saddled with what Bernanke himself has called a “frustratingly” sluggish recovery that leaves millions of Americans out of work.“I worry that QE3 will be hostage to QE2,” said Vincent Reinhart, a former director of the Fed’s monetary-affairs division who is now a scholar at the American Enterprise Institute in Washington. “That may lead to that self-induced paralysis” in further easing policy to aid the economy.
benbernanke  monetary  policy  USA  QE2  QE-2.0  QE  Fed  2011  stagnation  history  japan  lostdecade  economy  unemployment  deleveraging  growth  deflation  balancesheet  recession  deflationary  stimulus  fiscal  presidency  barackobama 
june 2011 by asterisk2a
Richard Koo Calls For, Surprise, More Reconstruction Stimulus To Prevent Japan's Natural Disaster From Becoming A Man-Made Calamity | zero hedge
To prevent this natural disaster from becoming a man-made calamity (ie a recession), the government needs to push ahead with reconstruction efforts. With private savings surging, the necessary funds can be borrowed for now. Later, once businesses and households start looking to the future, funding can and should be shifted to tax hikes and budget reshuffles." That is the conventional wisdom. For all those who wish to read what will happen if and when Japan continues on this unsustainable path of converting private savings into public funding without regard for demographics, please read Dylan Grice (here, here and here).
richardkoo  japan  balancesheet  recession  lostdecade  earthquake  tsunami  fukushima  2011  economy 
june 2011 by asterisk2a
Fed Lending Benefited Banks Far and Wide - NYTimes.com
The Fed data showed that the biggest recipient of taxpayer assistance was, naturally, Citigroup. It was followed closely by Morgan Stanley, Merrill Lynch and Bank of America. Goldman Sachs was also a large beneficiary during the darkest moments of 2008.
Remember that the Wall Street firms were imperiled by their excessive use of borrowed money, which generated huge paydays when the cost of those funds was cheap and the values of the assets they were buying were rising at a steady clip. After the bubble burst and financing evaporated, the firms were able to tap into a lending program created by the Fed in mid-March 2008 after Bear Stearns collapsed. It was called the Primary Dealer Credit Facility.
The program allowed firms to borrow at low interest rates — ranging from 3.25 percent when the program began to 0.5 percent when the last loan was made in May 2009. The firms had to post various securities as collateral when they borrowed, and some of those securities were risky indeed.
fed  benbernanke  balancesheet  interbank  report  financialcrisis  FinancialCrisisInquiryCommission  2008  2009  bearstearns  citigroup  goldmansachs  shadowbanking  fanniemae  freddiemac  aig  lending  overnight 
december 2010 by asterisk2a
Bernanke Faces Skepticism on Policy Tools - Bloomberg
“There’s now a cost-benefit analysis for future actions which I’d contrast with the ‘whatever it takes’ philosophy of the crisis,” Stanford University Professor John Taylor, creator of an interest-rate formula used by central banks, said in an interview. “The benefits of additional quantitative easing are quite small.”

Some Fed policy makers are skeptical of the need for further stimulus. “I have long said the recovery would be modest,” Kansas City Fed President Thomas Hoenig, the symposium’s host, said in an Aug. 25 Bloomberg Radio interview. “I think people have to realize that. We are going through major adjustments.”
fed  fiscal  policy  benbernanke  2010  QE  balancesheet  recession  recovery  2011  ZIRP  economics 
september 2010 by asterisk2a
Bob Janjuah: "We Are Trapped In Some Sort Of Horrendous Keynesian/Monetarists' Nightmare...." | zero hedge
Kevin's work also made clear that one 5%+ GDP data point, driven by inventory, was certain - he thgt it would be Q3 09 but it ended up being in Q4. However, we both have felt and feel that the prvte sector is in the middle of a long multi-yr period of balance sheet repair, and that the questions re sustainable real 'growth' could/can only be answered once we strip out and/or see the abatement/absence of UNSUSTAINABLE government largesse/bailouts/handouts etc. To us, once you strip away the policymaker and his period of peak effectiveness, where we are now much closer to the end rather than the beginning, what is left to take grwth forward is not very much at all.

I refer of course to the key themes Sovereign Creditworthiness; and The Great Battle between Voluntary Austerity & Deflation, vs Involuntary Austerity, Inflation/Stagflation, Serial Bailouts, Debt & Debasement.

MV = PY / EMU M3 was -.3% y/y in 09, means that even with +M, V was negative. It is a balance sheet recession.
Keynesianism  monetization  balancesheet  recession  richardkoo  private  public  debt  sovereign  austerity  default  globalisation  economics  M3  moneysupply  macroeconomics  greatrecession  UK  history  Japan  argentina  Greece  PIIGS  EMU  Europe  USA  BRIC  China  brasil  emergingmarkets  paulvolcker  competitive  competitiveness  Germany  Finland  euro  reflection  double-dip  reflate  developing-world  may  2010 
may 2010 by asterisk2a
Bob Janjuah: "This Is An Uber Bear Early Warning Alert...Major Risk Asset Sell Off Will See S&P Into 800s...The Fed Will Start New $5Tr QE Program" | zero hedge
First please refer back to my last comment, dd 26th April (Bob's World: What an idiot!)....2 takeaways from this note in particular - 1) my bearish trading call on risk assets, looking for a 10%/10%+ S&P selloff over late Apr and May from the 1220 level, driven by sovereign concerns, was spot on - maybe not bearish enough!, and 2) the point of market and taxpayer revulsion with the horrendous Keynesian/monetarist nightmare forced upon us by policymakers has come to bear. Sovereign limits and sovereign credibility concerns are not now a future risk - they are HERE. The enormous failure here is that the private sector has barely had time to catch a breath, let alone develop any form of self sustaining private sector recovery, before these limits have already begun to hit home.

As I have been saying for many months, the TRUE underlying private sector trend is one of DEFLATION (balance sheet repair thru reduction of nominal debt levels).

China in Bear territory.
Keynesianism  keynes  public  sector  bubble  debt  sovereign  2010  s&p500  PIIGS  UK  USA  2011  concerned  growth  balancesheet  recession  recovery  greatrecession  richardkoo  infaltion  deflation  policy  China  stimulus  package 
may 2010 by asterisk2a
Nomura's Richard Koo warns of UK double-dip - Channel 4 News
Budget deficit: how shoud the UK control it?
"If you try to do fiscal reform prematurely, I assure you your budget deficit will increase not decrease.

What next for the UK economy?
"We have to get companies to borrow money again. By this zig-zag of fiscal stimulus you will face this problem maybe five years, six years down the road and that kind of prolongs the problems.

So the choices politicians make right now will determine whether or not we have a lost decade?
"Yes that's very much the case."
double-dip  UK  usa  richardkoo  balancesheet  recession  recovery  debt  deficit  public  government 
april 2010 by asterisk2a
Reshaping the Federal Reserve | MintLife Blog | Personal Finance News & Advice
Fed assets rose 2.3 percent to $2.06 trillion” by the week ending August 19, 2009 – an increase up made almost entirely of private, mortgage-backed securities. Regardless of the merits or demerits of the Fed owning these particular securities, what matters from an institutional standpoint is that the Fed can now own private securities – a major departure from long-standing precedent.
AIG  Fed  TARP  politics  economy  lehmanbrothers  BearStearns  MBS  balancesheet  recession  2010  moralhazard 
february 2010 by asterisk2a
Albert Edwards: At 500% Net Liabilities To GDP, It Is Too Late To Prevent The Collapse Of The G-7; Greece Is Irrelevant, We Are All Now Insolvent | zero hedge
I am persuaded though by Richard Koo's book about the lessons from Japan's balance sheet recession. The crux of his analysis is that governments have no option but to stimulate aggressively all the while the private sector is de-leveraging. ANY attempt at fiscal cuts simply results in renewed recession and a further loss of confidence, thus making it even harder and more costly to sustain any subsequent recovery - and hence the budget deficit ends up bigger than before (e.g. see chart below). This is exactly the outcome I expect.
greece  PIIGS  debt  economy  europe  CDS  deflation  euro  EMU  crisis  2010  dubai  Keynesianism  keynes  society  unrest  unrecht  economics  battle-for-the-world-economy  battle-of-ideas  battleforideas  japan  history  lesson  balancesheet  recession  greatrecession 
february 2010 by asterisk2a

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