In the western world the consciousness of the catastrophic effect of any tragedy similar to Fukushima usually fades fast. A few months, half a year is usually all it takes. However this time is different– those famous 4 words. Or maybe not? The 100-something years old tradition of the West in the Far East...
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Previously was discussed that Chinese economy depends mostly on real estate and infrastructure development for its 10% GDP growth, while the export cannot growth that fast. The real estate shows all signs of a major bubble, however more research is needed to confirm that.
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In the previous part I discussed the balance sheet of the People Bank of China. Relative to GDP, PBC book is about 4x times bigger than Federal Reserve, with most of the assets in dollars and most of the liabilities in Yuan. In Spring 2010 one of the Bloomberg guests estimated that it sufficient...
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In the part 2 I was discussing the dollar peg. Today the topic is the dollar sterilization.
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In part 1 of this article I wrote that I believe in strong monetary cooperation between all three reserve currency stakeholders: the USA, Europe and Japan. As Japan is suffering the most from deflation it got carte blanche from other two to engage in massive debasement of its currency. Once Japan is done the...
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Nobody knows what will happen. The discrepancies of economic predictions are at a record high. From deflation to hyperinflation, from the Euro getting destroyed to the dollar death cross, from idiotic “new normal” to idiotic Ken Fisher. But please note that while concrete economic criteria like unemployment, the inventory cycle, budget deficit, and GDP...
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The question being asked again and again to almost every guest on Bloomberg radio in the past few weeks is: should we turn toward fiscal prudence or should we stimulate the economy no matter how large the deficit will be? The answers split, though it’s hard to estimate exactly at which proportion. To us ordinary bloggers, this...
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I don’t want to repeat Dylan Ratigan’s description of the financial sector as a “con job”, or something I wrote, as a “financial ring“. Instead, I want to describe the warfare that Obama is undertaking with the financial sector in terms of the extra-long cycle, the Kondratieff Wave.
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Greece is virtually falling apart but nobody’s watching. Today I’ve spent 15 minutes listening the Jim Cramer show, (which was quite an accomplishment). He did not mention Greece in the first 15 minutes (he later answered to my tweet and claimed that he mentioned Greece twice). And other media is covering Greece but it doesn’t...
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Please don’t take this prediction too seriously but I think the “Phrase of the Year” will be something like– “… is struggling to hedge its exposure” and hence the “Word of the Year” will be something like “hedging”. Of course it will be #1 only in the case the word “meltdown” does not beat it out.
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The World is partying like it is 2007 all over again. The reasons are two: the crazy money printed by Helicopter Ben and the moral hazard produced by the universal bailout of everything, everywhere. I still see the traces of sanity in the US consumers’ minds as they are running a pretty decent savings rate but...
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The spectacular rebound in oil prices in 2009 could be attributed to two major factors: fears of currency debasement that lead to excess hoarding and speculation; and discipline of well-oiled Opec members to cut production.
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Last year I was not making making predictions for 2009, mostly because my call for 2008 was ridiculously correct and I had nothing more to say. But this year will be different and I’ll try to make some predictions.
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The big financial question that every econo-blogger must be aware of is: how come that the proportion in profits in the economy as the whole that the financial industry was taking was constantly increasing all the past few decades and yet this same financial industry became the epicenter of the systemic crisis we are...
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As almost all WSE authors posted their view on reverse REPO announcement, I think I have to post my take as well. Yes, in general I think it is a warning to some of the most leveraged carry-trade players. But my view is a small refinement in the same direction.
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