China’s Debt Endgames

Quick And Slow Deaths… Understandably, the major focus now is on the denouement of the crisis. Pessimists are concerned about a catastrophic crash. Optimists are more sanguine, expecting a soft landing with gradual reforms correcting the systemic issues. The crash scenario is predicated on continuing increases in debt levels and over-investment. Policy adjustments are fatally […]

Privatizations and Debt : Lessons From The Greek Fiasco

 In the midst of the European Debt Crisis, it is tempting to think that high-debt countries could alleviate the recessionary impact of the budget consolidation process by selling (poorly managed) assets and stakes in their state owned enterprises (SOEs), and by using the proceeds to buy back their debts. In addition to providing a cushion […]

Understanding the ‘Looming’ National Debt Issue – Brief Suggestions on Re-aligning Our Perspectives

A great many people across all societal levels, from the wealthy to the poor and even amongst politicians, have completely understandable and dramatic concerns about the “out of control” national debt figures.  Are we permanently hobbling ourselves, and mortgaging our futures?  How can we make sense of these enormous debt numbers? I believe this is […]

Austerity and Growth: Dispelling Confusion With Some Facts

A lot of confusion surrounds the quarrel about austerity and growth in and among the Euro-countries. [1] Confusion helps neither the assessment of the current policies nor the choice of the correct ones. Critics of austerity argue that it is mainly responsibile for the extent and persistence of low or negative growth rates after the […]

Estimated Macro Impacts of the Shutdown

Four business days into the shutdown, and we have already exceeded in length 90% of the government-wide shutdowns that have occurred. What is the macro impact? In an accounting sense, by end-of-Monday, the impact should be to shave off 0.2 ppts of 2013Q4 q/q annualized growth.   Exhibit 1 from Alec Phillips, “Updated Thoughts on the […]

EA Spreads: Why Should the Trend Change?

They changed the title; but originally the NY Times reported “Euro Zone Agrees to Reinforce Maastricht Rules“.  That’s exactly what EA policy makers agreed to last week – not much to bring home. The real shift in policy came from the ECB. Ambrose Evans-Pritchard highlights the ECB’s actions as ensuring some sort of bank profitability, while […]