dimelab dimelab: shrinking the gap between talk and action.
major | source

major source Topic in The Credit Debacle Catalog

naked capitalism Mon 2010-07-19 17:00 EDT

Satyajit Das Examines Eurozone Stability Fund Three Card Monte

...Central banks and governments have developed an alarming fondness for the very sort of fancy financial structures that investment banks used to camouflage and transfer risk and engage in regulatory arbitrage prior to the crisis...The Eurozone has taken this affinity for financial structuring legerdemain even further, drawing on the most abused structure of the crisis, collateralized debt obligations, to create (as before) super duper AAA credits from less promising material...Das has exposed one major source of vulnerability, that of the impact of ratings downgrades. Auerback points out another: a revolt by workers in the Austerian nations, who will recognized, intuitively, perhaps explicitly, that the sacrifices demanded of them are a transfer to bankers in other countries...

card monte; naked capitalism; Satyajit Das Examines Eurozone Stability Fund.

Tue 2010-05-18 14:16 EDT

billy blog >> Blog Archive >> The enemies from within

...Unemployment is the major source of poverty whether it be in a advanced or developing country. It is alienating, soul destroying, extends its costs well beyond the individual and the income losses alone dwarf the costs arising from so-called microeconomic inefficiencies. The daily loss of GDP involved in not having all available workers doing something productive is mammoth. It is a no-brainer that it is the large economic problem that should be solved in any country...If the private sector cannot produce enough then there is only one sector left ladies and gentleman who can do the trick!...Given the private sector doesn't want to spend at present -- and you cannot blame them for that given the appalling state of their balance sheets and the very unsteady housing market -- there is a danger that demand will drop further unless the government adds to its stimulus packages...the US is an economy that desperately needs more aggregate demand. The only constraint on employment is the lack of spending and there is no financial constraint that exists in a fiat monetary system that prevents the government from eliminating that demand deficiency...

Billy Blog; blogs Archive; enemies.

The Wall Street Examiner Sun 2010-05-09 09:55 EDT

Taking a Minsky Cruise on the Flow of Funds Datastream (part 1)

...Banks (who are, of course, owned by people, equity liabilities are not included in that data set) have always had a big lien on the country, but that lien has doubled (relative to GDP) since 1980. Households used to be a major source of finance in the country but as their distaste for debt faded along with memories of the depression they started to borrow more than they leant. Then, as restrictions to foreign capital inflows fell (how else to maintain a trade deficit without settling in specie) the Rest of the World became a significant source of funds. In 2001, The RoW overtook US Households as a source of funding and this trend has accelerated. Warren Buffett was wrong, we weren't going to become a sharecropper society, we already were one...

flowing; Funds Datastream; Minsky Cruise; Part 1; take; Wall Street Examiner.

Copyright © 2010 dimelab. All rights reserved.