zero hedge Thu 2010-05-13 17:50 EDT

Willem Buiter Issues His Most Dire Prediction Yet: Sees "Unprecedented" Fiscal Crises, US Debt Inflation And Fed Monetization

...we were very surprised when we read Willem Buiter's latest Global Economic View (recall that he works for Citi now). In it the strategist for the firm that defines the core of the establishment could not be more bearish. In fact, at first we thought that David Rosenberg had ghost written this...Buiter presents a game theory type analysis, which concludes that the US and other sovereigns will soon be forced into fiscal austerity. Among his critical observations (we recommend a careful read of the entire 68 pages), are that the US is highly polarized, and that the Fed, which is "the least independent of leading central banks" would be willing to implement "inflationary monetisation of public debt and deficits than other central banks." The next step of course would be hyperinflation. And Buiter sees America as the one country the most likely to follow this route. Most troublingly, Buiter predicts that a massive crisis is the only thing that can break the political gridlock in the US in order to fix the broken US fiscal situation...

debt inflated; dire predictions; Fed Monetizing; fiscal crises; see; unprecedented; Willem Buiter Issues; Zero Hedge.

naked capitalism Sun 2010-02-28 13:23 EST

Rogoff Foresees A Wave of Sovereign Debt Defaults

Kenneth Rogoff, former IMF chief economist warned that a series of sovereign debt defaults is likely to be in the offing...Rogoff is far from alone in seeing sovereign defaults as likely, but so far, the chorus of concern comes mainly from analysts and investors rather than well-known economists (Willem Buiter was notable exception in that regard). One correspondent said that one of his sources, with impeccable contacts, anticipates 12 sovereign debt defaults in the EU...

naked capitalism; Rogoff Foresees; sovereign debt Default; wave.

Jesse's Café Américain Tue 2009-12-01 10:06 EST

Morgan Stanley Fears UK Default in 2010

Jesse

As you may recall we are bears on sterling, and view the UK as the Iceland of the G20.The monetary policies of the Bank of England were as bad as those of the Greenspan - Bernanke Fed. The difference is that the UK does not hold the world's reserve currency as a captive source of revenues. As an aside, we see that Bank of England advisor and economic franc-tireur Willem Buiter has decided to seek greener pastures as chief economist with Citi in the States. Timely exit. Bravo, Willem.

2010; Jesse's Café Américain; Morgan Stanley Fears UK Default.

Thu 2009-11-19 19:43 EST

Jesse's Café Américain: Willem Buiter Apparently Does Not LIke Gold, and Why Remains a Mystery

Dr. Willem Buiter of the London School of Economics, and advisor to the Bank of England, has written a somewhat astonishing broadsheet attacking of all things, gold. I have enjoyed his writing in the past. And although he does tend to cultivate and relish the aura of eccentric maverick, it is generally appealing, and his writing has been pertinent and reasoned, if unconventional. That is what makes this latest piece so unusual. It is a diatribe, more emotional than factual, with gaping holes in theoretical underpinnings and historical example.

Jesse's Café Américain; likely gold; mysteriously; remains; Willem Buiter Apparently.

Willem Buiter's Maverecon Thu 2009-10-15 16:51 EDT

Kornai on Soft Budget Constraints, Bail-Outs and the Financial Crisis

Nobel Prize winning economist J��nos Kornai

...Spreading of the SBC syndrome is at once a cause and an effect of the crisis. I will not say it is the only cause: the situation that led to the crisis was brought about by a complex of factors. But I will say firmly that softening of the budget constraint is one of the main causes of the crisis. The general softening tendency has been reinforced in the United States and several other countries by successive bailouts over the last ten or twenty years. Some economists, such as Professor Chenggang Xu, have been pointing for years at a close link between the crisis in East Asia and earlier bailouts. [moral hazard generalized]

bail-outs; Financial Crisis; Kornai; Soft Budget Constraints; Willem Buiter's Maverecon.

Willem Buiter's Maverecon Sat 2009-10-10 14:00 EDT

Expect little and you may yet be disappointed

Willem Buiter

...the most disappointing development this year was the performance of president Barack Obama and his administration - and my expectations were modest to begin with...On the fiscal side, Barack Obama is presiding over the biggest peace-time government deficits and public debt build-up ever. According to my back-of-the-envelope calculations there is about a 10 percent of GDP gap between the medium and longer-term spending plans of the Obama administration and the taxes the Congress is willing and able to impose. The reality that you cannot run a West-European welfare state (with decent quality health care, decent pre-school, primary and secondary school education for all), rebuild America's crumbling infrastructure, invest in the environment and fulfill your post-imperial global strategic ambitions while raising 33 percent of GDP in taxes, has not yet dawned on the Obama administration or on the American people at large...Clearly, the qualities one needs to get elected to high office in western democracies are not qualities that are likely to be helpful once you have achieved high office and are expected to govern and lead. To survive the selection process to become president you have to be able to stitch together a coalition of special interests that can provide sufficient financial and sweat equity resources to win this grueling race to the top. Once you get there, you should shed the unfortunate baggage you accumulated on your way up and govern in the interest of all the people. Few can do that. Apparently Obama is not one of them.

disappointment; expectations; Willem Buiter's Maverecon.

Willem Buiter's Maverecon Sat 2009-10-10 13:13 EDT

I know I know nothing; but at least I know that

Willem Buiter

...Except for the important qualifier that the US dollar is a global reserve currency, and that the US government (and private sector) has most of its domestic and external liabilities denominated in US dollars, the pathologies of financial boom, bubble and bust in the US, the UK, Iceland, Ireland and Spain (and many of the Central and East European emerging market economies) track those of classical emerging market crises in South America, Asia and CEE in the 1990s, rather well. The emerging market analogy makes one less optimistic about a robust recovery, as typically, emerging markets whose financial sector was destroyed by a serious financial crisis took many years to recover their pre-crisis growth rates and often never recovered their pre-crisis GDP paths.

know; least; Willem Buiter's Maverecon.

Thu 2009-10-08 17:04 EDT

After subverting bank insolvency, our leaders are now about to make a mess of liquidity

FT.com | Willem Buiter's Maverecon

Unless there is a major change of direction among global economic and financial officialdom, we are at risk of ending up with a world in which liquidity provision is privatised and insolvency risk for banks is socialised. This would be the exact opposite of what makes sense: solvency is (or should be) a private good and liquidity is (or should be) a public good...The authorities should not waste their limited organisational capital to force banks to provide inefficiently the public good of liquidity when confidence and trust are low. They should instead focus on ways of enforcing hard budget constraints on banks - to confront them with the realities of insolvency in a way that separates shareholders, unsecured creditors, boards and managers from their investments while leaving the bank as a functioning organisation capable of continued intermediation.

leaders; liquidity; makes; Mess; subverting bank insolvency.

Thu 2009-04-16 00:00 EDT

naked capitalism: Willem Buiter: Treasury Will Have to Abandon Current Approach to Banks

Abandon Current Approach; bank; naked capitalism; Treasury; Willem Buiter.

Wed 2009-04-01 00:00 EDT

naked capitalism: Willem Buiter Strikes Again, Calls for Over-Regulation of Banks

bank; called; naked capitalism; Regulators; Willem Buiter Strikes.

Wed 2009-04-01 00:00 EDT

FT.com | Willem Buiter's Maverecon | The Fed's moral hazard maximising strategy

FT.com | Willem Buiter's Maverecon | The Fed's moral hazard maximising strategy

com; Fed's moral hazard maximising strategy; FT; Willem Buiter's Maverecon.

Tue 2009-02-24 00:00 EST

naked capitalism: Willem Buiter: The US and UK as Banana Republics

banana republic; naked capitalism; UK; Willem Buiter.

Tue 2009-02-24 00:00 EST

naked capitalism: Willem Buiter: Mismanagement by the Officialdom Can Produce a Depression

Depression; mismanaged; naked capitalism; officialdom; produced; Willem Buiter.

Fri 2009-02-20 00:00 EST

FT.com | Willem Buiter's Maverecon | Home loans in the US: the biggest racket since Al Capone?

Buiter urges end the deductibility of mortgage interest in the personal income tax, close down Fannie and Freddie and end the role of the US government in the provision of residential mortgages

biggest racket; Capone; com; FT; home Loans; Willem Buiter's Maverecon.

Mon 2009-01-19 00:00 EST

naked capitalism: Willem Buiter Argues Against Eurozone Breakup Worries

Eurozone Breakup Worries; naked capitalism; Willem Buiter argues.

Fri 2009-01-16 00:00 EST

Jesse's Café Américain: Willem Buiter Warns of a US Dollar Collapse While China Makes a Move

Jesse's Café Américain: Willem Buiter Warns of a US Dollar Collapse While China Makes a Move

China make; dollar collapses; Jesse's Café Américain; move; Willem Buiter Warns.

Fri 2009-01-16 00:00 EST

naked capitalism: Willem Buiter Calls for Less US Stimulus, Expects Collapse in Price of Dollar Assets

dollar assets; expected collapse; naked capitalism; Price; stimulus; Willem Buiter Calls.

Fri 2008-12-12 00:00 EST

naked capitalism: "The western financial system we knew has collapsed"

Willem Buiter

Collapse; knew; naked capitalism; Western financial systems.

Fri 2008-11-07 00:00 EST

naked capitalism: Willem Buiter: "We are laying the foundations of the next systemic crisis"

Buiter lambasts Paulson

Foundation; lays; naked capitalism; system crisis; Willem Buiter.

Wed 2008-10-08 00:00 EDT

naked capitalism: Willem Buiter: Banking System in North Atlantic Probably Insolvent

banking systems; naked capitalism; North Atlantic Probably Insolvent; Willem Buiter.

Tue 2008-09-09 00:00 EDT

FT.com | Willem Buiter's Maverecon | If it's broke, fix it - but how?

FT.com | Willem Buiter's Maverecon | If it's broke, fix it - but how? 2008-04-18; ``The worst outcome of the current financial crisis would be a return to the status quo ante that produced the pathologies, anomalies and contradictions that are its root causes.''

broke; com; Fix; FT; Willem Buiter's Maverecon.

Tue 2008-07-15 00:00 EDT

naked capitalism: Welcome Willem Buiter and Mohamed El-Erian to the Banana Republic Club!

Banana Republic Club; Mohamed El Erian; naked capitalism; Welcome Willem Buiter.

Sat 2008-07-12 00:00 EDT

FT.com | Willem Buiter's Maverecon | Time for comrade Paulson to pull the plug on the Fannie and Freddie charade

FT.com | Willem Buiter's Maverecon | Time for comrade Paulson to pull the plug on the Fannie and Freddie charade

com; comrade Paulson; Fannie; Freddie charade; FT; plug; pull; Time; Willem Buiter's Maverecon.

Mon 2007-10-08 00:00 EDT

Maverecon - Willem Buiter's Blog: Murder in the Markets: Whodunnit?

Willem H. Buiter and Anne C. Sibert: A brief history of securitisation and off-balance sheet finance (SIV; subprime implosion; lender of last resort (LOLR))

Market; Maverecon; murdering; whodunnit; Willem Buiter's Blog.