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How Dr. Ben Copperfield makes trillions disappear – twice
Fed Chairman Ben Bernanke is a magician. He can make trillions of debt disappear. Impossible? Let me show you how: Please take a look at the following table[1]. We are only going to look at the total marketable public debt[2]. Broken down into categories by instrument I compared the latest data (July 2011) with the…
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Road Map to Ruin
Budget deficits in “good” times, build-up of government debt Few countries’ (GER, NED) exports lead to trade deficits for others (GR, ESP, POR) Costly bank bail-outs and fiscal “stimulus” Monetary stimulus (0% interest rates); useless Rating agencies finally wake up (downgrades) PIIGS unable to sell more debt as yields rise IMF/EU (read: taxpayers) step…
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Greece: Two Bail-outs and a Funeral
Here we go again. Another bail-out. [Sigh.] I’ll try to make this as entertaining and easily readable as possible – but first the details of the bail-out agreed on July 21st: Fresh EUR 109bn EFSF/IMF loans until mid-2014 Private sector (read: banks) participation of EUR 37bn EUR 12.6bn from bond repurchases at below par (100%)…
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Look at me – I am a junk-rated bank!
Everybody hates rating agencies. They missed Enron (balance sheet fraud), the sub-prime crisis (using models provided by banks) and sovereign debt crisis (concealed by foreign currency swaps). They have been wrong – so what? Stock market analysts are wrong all the time, and investors still read their worthless reports. And what would you expect from…
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Merkel to Sinn: “In my office. NOW.”
Hans-Werner Sinn, head of German research institute Ifo, has just put his life into peril. He had to pick a Swiss magazine (“Bilanz”) to express what nobody else is allowed to mention in Germany: “Greece is a bottomless barrel”. Hans-Werner Sinn, Ifo Institute Picture: Handelsblatt For those who remember, Sinn was the only one among…
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Looking back: “We are buying Greek government bonds!”
May 3, 2010. The EU and the IMF have just announced a EUR 110bn bail-out for Greece. Greek 10-year government bonds are yielding below 9%. German financial newspaper “Handelsblatt” launches a multi-page call to lure unsuspecting citizens into buying Greek government bonds. You can (and should) still read this master piece here. Gabor Steingart, editor-in-chief, opens…
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Hungarian adventures in CHF: Laszlo wasn’t alone drinking CHF-laced Kool Aid
In 2006 and 2007, more than 90% of new Hungarian mortgages were denominated in foreign currencies. Many foreign banks (KBC, Bayerische Landesbank, Erste Bank, Intesa Sanpaolo, Raiffeisen, Unicredit) were luring Hungarians with low interest rates. At the time, Hungarian mortgage rates were around 9%, while Euro-mortgages cost around 4.5%. But those cheapo Swissies were to…
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What a taifun in Vietnam taught me about the Euro crisis
As I was traveling through Vietnam in the mid-nineties our bus drove through an area visited by a taifun. The road was running on a slightly elevated dam, so initially there was no obstacle to continue the journey. Looking out of the window there was water on both sides as far as the eye could…
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US house price decline accelerating
US house prices have entered into an accelerating decline. The more I dig into the details the worse it gets. The most widely followed measure of US single family home price is the S&P Cash-Shiller Home Price Index (CS HPI). First a word on how it is calculated: “The S&P/Case-Shiller Home Price Indices are calculated…
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US house prices – Roll out the welcome mat for a double-dip
by Alexander Gloy Let’s take a look at the situation after the October data from the Case-Shiller home price index has come in[1]: You see all major metropolitan areas peaking between March and May 2010 (the end of the first-time home-buyer tax credit). After only 8 months in positive territory, the overall index comprising 20…
Category: Economy
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