Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

More Evidence That LIBOR Is Hazardous to Economic Health

by Jon Hill Monday, July 16, 2012
LIBOR OIS and Bank CDS

Central bankers necessarily spend a great deal of time studying economic and market data that they believe to be forward-looking indicators of the economy’s health.  One such is the so-called “LIBOR-OIS spread” – the spread between the London Interbank Offered Rate (the rate at which major banks can supposedly borrow from each other, unsecured by collateral, for three months) and the Overnight Indexed Swap rate Read more »

More Evidence That LIBOR Is Manipulated, and What It Means

by Jon Hill Tuesday, July 10, 2012
LIBOR v NYFR

Barclays’ admission that it deliberately understated the interest rates at which it could borrow between September 2007 and May 2009 suggests grievous flaws in the widespread process of using LIBOR (the London Inter-Bank Offered Rate) as a benchmark off which to price commercial loans, mortgages, and other forms of lending.  Our figure above illustrates this by comparing LIBOR with so-called NYFR Read more »

“Iceland’s Post-Crisis Miracle” Revisited

by Jon Hill Monday, July 2, 2012
The Northern Lights are seen through a valley leading away from Iceland's Eyjafjallajokull volcano April 22, 2010. Lucas Jackson / Reuters The Northern Lights are seen through a valley leading away from Iceland's Eyjafjallajokull volcano April 22, 2010. Lucas Jackson / Reuters

Back in July 2010, we produced a post examining the “Icelandic Post-Crisis Miracle,” as proclaimed by Paul Krugman.  We showed that Krugman’s “miracle” was merely an artifact of comparing changes in Iceland’s real GDP with that of Estonia, Ireland, and Latvia since the strategically chosen 4th quarter of 2007. Read more »