Post Tagged with: "Willem Buiter"

Willem Buiter, monetary dominance and the convergence to zero

Willem Buiter, monetary dominance and the convergence to zero

I have still yet to get my hands on Willem Buiter’s recent research piece about his proposed China-led global recession. However, I have since seen snippets of the piece and have heard what he has to say about it. And frankly, he makes a lot of sense. Let me review the bits I have seen of what he is saying, using my own parlance and analysis. The title says it all about the economic environment and the economic model: disninflationary environment dominated by weak fiscal policy and a monetary offset globally. The outcome, I believe, like Buiter, is likely to be serious economic under-performance.

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Will India be the big surprise for 2015?

Will India be the big surprise for 2015?

Let me keep this Friday piece short as I am going to go a little out of my wheelhouse and talk about India. I have been hearing a lot of positive noises about India from various sources including Eswar Presad, Willem Buiter and Christopher Wood. As we head into 2015, we are all looking at the risks in emerging markets like Russia, Venezuela, Nigeria and so forth. But India seems to be a play that deserves a fair degree of attention as they may surprise to the upside.

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The German view of the Euro crisis

The German view of the Euro crisis

The Germans got into the eurozone out of a desire to increase European integration and to strengthen Europe as an economic area that rivalled the United States. Yet, now we are in a period where the Germans are being blamed for everything that’s going wrong with the Euro. I think the Germans do deserve some of this blame but not all of it and I want to briefly post why. Consider this an addendum to the other Edward’s piece that was posted just before this one, but from my own somewhat pro-German point of view.

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On Fed tapering, policy co-ordination and emerging market risk

On Fed tapering, policy co-ordination and emerging market risk

I am concerned about what is happening in the emerging markets but not alarmed. Fed tapering was a proximate trigger but not a cause. All indications are that the crisis is hitting only the most exposed and vulnerable markets and that this doesn’t have to boomerang onto other markets. The worry has to be that contagion causes the locus of stress to spread to economic agents that should be less vulnerable, causing the crisis to metastisize and spiral out of control. Policy co-ordination in foreign exchange will be key if this occurs.

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Why fiscal sustainability matters

Why fiscal sustainability matters

By Willem Buiter This post first appeared on Vox Fiscal sustainability has become a hot topic as a result of the European sovereign debt crisis, but it matters in normal times, too. This column argues that financial sector reforms are essential to ensure fiscal sustainability in the future. Although emerging market reforms undertaken in the aftermath of the financial crises […]

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Buiter: ‘it was clear that Cyprus was a laboratory’

Buiter: ‘it was clear that Cyprus was a laboratory’

Back to the Willem Buiter interview in Financiëele Dagblad. Here Buiter continues with some comments on Jeroen Dijsselbloem’s admission that bail-ins will be the preferred vehicle for conducting rescues going forward so as not to burden the public balance sheet.

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Buiter: Most European banks are zombies

Buiter: Most European banks are zombies

It’s Easter weekend here in Germany and I caught this interview with Willem Buiter from the Financiëele Dagblad that I get by e-mail each morning. I thought it was significant enough that I would translate it. Buiter has been fairly pessimistic about the future integrity of the euro zone and thinks that some of the euro members are destined to leave the euro area.

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Buiter was right about Europe’s phony bank stress tests and the Dutch mortgage crisis

Buiter was right about Europe’s phony bank stress tests and the Dutch mortgage crisis

Nationalised Dutch lender SNS Reaal, the fourth largest bank in the Netherlands has recently been nationalised despite a reported 13 percent Tier 1 capital level in the most recent round of banking stress tests in Europe. Clearly, the stress tests weren’t particularly stressful. I would go so far as to say they were ‘phony’.

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Buiter expects writedowns on Dutch mortgages, recommends debt jubilee

Buiter expects writedowns on Dutch mortgages, recommends debt jubilee

The Dutch press is reporting that Willem Buiter, the Dutch-born Chief Economist of Citigroup, believes that we are going to witness a slew of writedowns in the Netherlands unless the Dutch can right the economy and stop the fall in house prices.

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Spanish house price decline accelerates to 15.2% year-on-year

Spanish house price decline accelerates to 15.2% year-on-year

The last time I reported on the Spanish housing market in August, we were in the midst of a bank deposit run caused by the redenomination risk. This was pre-OMT. At the time, we saw an acceleration in the house price declines. House prices were down 11.2% year-on-year through July. Things have got worse since, with house price declines accelerating […]

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Emergency Liquidity Assistance In The Eurozone – Draghi’s Irreversible Euro Put Explained

Emergency Liquidity Assistance In The Eurozone – Draghi’s Irreversible Euro Put Explained

While the ECB may certainly now buy as many peripheral bonds as it wishes if it deems convertibility risk to be a real issue money is already trickling into cash strapped peripheral economies through the arcane tool of emergency liquidity assistance (ELA)

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Europe is on the brink of something very big

Europe is on the brink of something very big

Euro zone bond markets have come completely unhinged this morning. Spanish 10-year yields have hit the highest level this year at 6.5%. While Italian 10-year yields broke above 6% for the first time since late January. Meanwhile, German yields have moved to a record low of 1.44%. We are now back to levels of stress we last saw during the Italian crisis in November and December. However, this time policy space has narrowed considerably. In short, Europe has reached the critical breaking point.

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