Comments on: This is what a crisis looks like in the balance of payments data http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/ Sat, 21 Nov 2009 16:40:10 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Links: 2008-12-15 - Credit Writedowns http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-129782 Links: 2008-12-15 - Credit Writedowns Thu, 30 Apr 2009 01:18:48 +0000 http://blogs.cfr.org/setser/?p=4214#comment-129782 [...] But, where does deficit spending lead? BradSetser tackles that question in a thoughtful piece. Brad Setser: Follow the Money - This is what a crisis looks like in the balance of payments data [...] [...] But, where does deficit spending lead? BradSetser tackles that question in a thoughtful piece. Brad Setser: Follow the Money – This is what a crisis looks like in the balance of payments data [...]

]]> By: Videos, Interviews, Gold, Oil and More | Money and Markets Blogs http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-121937 Videos, Interviews, Gold, Oil and More | Money and Markets Blogs Fri, 09 Jan 2009 16:47:51 +0000 http://blogs.cfr.org/setser/?p=4214#comment-121937 [...] This Is What a Crisis Looks Like in the Balance of Payments Data At least a crisis marked by a run out of risky US assets and into safe US assets. Right now Agency bonds — think Freddie and Fannie — are considered risky assets while Treasuries are not. [...] [...] This Is What a Crisis Looks Like in the Balance of Payments Data At least a crisis marked by a run out of risky US assets and into safe US assets. Right now Agency bonds — think Freddie and Fannie — are considered risky assets while Treasuries are not. [...]

]]> By: Videos, Interviews, Gold, Oil and More | Red Hot Energy and Gold http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-121875 Videos, Interviews, Gold, Oil and More | Red Hot Energy and Gold Thu, 08 Jan 2009 19:08:23 +0000 http://blogs.cfr.org/setser/?p=4214#comment-121875 [...] This Is What a Crisis Looks Like in the Balance of Payments Data [...] [...] This Is What a Crisis Looks Like in the Balance of Payments Data [...]

]]> By: Videos, Interviews, Gold, Oil and More http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-121745 Videos, Interviews, Gold, Oil and More Wed, 07 Jan 2009 21:52:36 +0000 http://blogs.cfr.org/setser/?p=4214#comment-121745 [...] This Is What a Crisis Looks Like in the Balance of Payments Data At least a crisis marked by a run out of risky US assets and into safe US assets. Right now Agency bonds — think Freddie and Fannie — are considered risky assets while Treasuries are not. [...] [...] This Is What a Crisis Looks Like in the Balance of Payments Data At least a crisis marked by a run out of risky US assets and into safe US assets. Right now Agency bonds — think Freddie and Fannie — are considered risky assets while Treasuries are not. [...]

]]> By: Videos, Interviews, Gold, Oil and More | Red Hot Energy and Gold http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-121660 Videos, Interviews, Gold, Oil and More | Red Hot Energy and Gold Tue, 06 Jan 2009 17:26:41 +0000 http://blogs.cfr.org/setser/?p=4214#comment-121660 [...] This Is What a Crisis Looks Like in the Balance of Payments Data At least a crisis marked by a run out of risky US assets and into safe US assets. Right now Agency bonds — think Freddie and Fannie — are considered risky assets while Treasuries are not. [...] [...] This Is What a Crisis Looks Like in the Balance of Payments Data At least a crisis marked by a run out of risky US assets and into safe US assets. Right now Agency bonds — think Freddie and Fannie — are considered risky assets while Treasuries are not. [...]

]]> By: wintermute http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-121462 wintermute Sun, 04 Jan 2009 00:34:12 +0000 http://blogs.cfr.org/setser/?p=4214#comment-121462 Any prospect of the US rebuilding its lost manufacturing base, balancing imports with exports is going to be overtaken by much stronger forces. Between 2020 and 2030 nanotechnology will obsolete much of manufacturing with the same inevitability that the mechanisation of the Industrial Revolution marginalised manual labour and handcraft. Countries like China will have little time to benefit from their enormous investment in their new manuacturing base. Fortunately for the US - it will indeed be the hub of this technological revolution. However, the democratisation of information through the internet will mean that all other countries will swiftly engage in this process. Any prospect of the US rebuilding its lost manufacturing base, balancing imports with exports is going to be overtaken by much stronger forces. Between 2020 and 2030 nanotechnology will obsolete much of manufacturing with the same inevitability that the mechanisation of the Industrial Revolution marginalised manual labour and handcraft. Countries like China will have little time to benefit from their enormous investment in their new manuacturing base.

Fortunately for the US – it will indeed be the hub of this technological revolution. However, the democratisation of information through the internet will mean that all other countries will swiftly engage in this process.

]]> By: Brad Setser: Follow the Money » Blog Archive » That was fast …. http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-120541 Brad Setser: Follow the Money » Blog Archive » That was fast …. Thu, 18 Dec 2008 18:01:40 +0000 http://blogs.cfr.org/setser/?p=4214#comment-120541 [...] I’ll be interested to see if they do so — or if they start to view the pound as Europe’s equivalent of an Agency bond … [...] [...] I’ll be interested to see if they do so — or if they start to view the pound as Europe’s equivalent of an Agency bond … [...]

]]> By: Twofish http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-120409 Twofish Wed, 17 Dec 2008 06:08:06 +0000 http://blogs.cfr.org/setser/?p=4214#comment-120409 Ying: Why does Chinese banks want investment banking professionals on wall street? Because capital doesn't allocate itself, and Chinese leadership realizes that you need a strong financial sector for economic growth. Ying: Isn’t that enough that these people were doing such an good job that destroyed the world economy? There are competent bankers, there are incompetent bankers. Hire the competent ones. Bad bankers can do a lot of damage, but so can bad doctors. The fact that bad doctors exist doesn't mean that you should get rid of all doctors. Ying: Do Chinese banks really want these specialists to learn how to get around regulation and make huge amount of money for themselves? Actually part of the people that are doing the recruiting are Chinese financial regulators that want specialists who know how to get around the rules to be part of designing the rules so that people don't get around them. Ying: They should be paid as plumbers get from their wages. They know how to make money, but not benefiting the people. How do you go about deciding who gets paid what or what exactly benefits the people? It's tempting to shoot the businessmen, and then let decisions be made by saints. But that doesn't work that well, and saints turn out to have their own self interest. Ying: Why does Chinese banks want investment banking professionals on wall street?

Because capital doesn’t allocate itself, and Chinese leadership realizes that you need a strong financial sector for economic growth.

Ying: Isn’t that enough that these people were doing such an good job that destroyed the world economy?

There are competent bankers, there are incompetent bankers. Hire the competent ones. Bad bankers can do a lot of damage, but so can bad doctors. The fact that bad doctors exist doesn’t mean that you should get rid of all doctors.

Ying: Do Chinese banks really want these specialists to learn how to get around regulation and make huge amount of money for themselves?

Actually part of the people that are doing the recruiting are Chinese financial regulators that want specialists who know how to get around the rules to be part of designing the rules so that people don’t get around them.

Ying: They should be paid as plumbers get from their wages. They know how to make money, but not benefiting the people.

How do you go about deciding who gets paid what or what exactly benefits the people? It’s tempting to shoot the businessmen, and then let decisions be made by saints. But that doesn’t work that well, and saints turn out to have their own self interest.

]]> By: Howard Richman http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-120407 Howard Richman Wed, 17 Dec 2008 03:52:50 +0000 http://blogs.cfr.org/setser/?p=4214#comment-120407 @credulous_prole: "If foreign CB’s are buying agency paper ANYWAY (indirectly) when they buy t-bills, why not just get the higher yield directly and buy agencies?" The reason is simple. Risk. They expect US house prices to continue to fall toward their fundamental levels. As a result, Fanny Mae and Freddie Mac will lose massive amounts of money on the new loans that they make. Lending to US home buyers is extremely risky right now. Check out my blog posting about <a href="http://tradeandtaxes.blogspot.com/2008/12/foreclosurecom-housing-markets-will.html" rel="nofollow">where we are in the house price bubble right now</a>. @credulous_prole: "I think the REAL key is for the Fed to make foreign CB’s GREEDY again, and once they entice them into the agency market, the US will be able to stage a pretty." Brad wants the foreign Central Banks to switch away from Treasuries toward Agencies. That would be fine. But, if the foreign Central Banks simply buy up more US assets including Agency bonds, that would make our economy worse since it would drive up the dollar, thus decreasing our exports and thereby increasing our trade deficit, which is already a huge drag upon our economy. The effect of lower interest rates on house prices at this point in the house price bubble would be negligible. The solution is for the United States to <a href="http://www.enterstageright.com/archive/articles/1008/1008buffet.htm" rel="nofollow">balance trade</a>. @credulous_prole: “If foreign CB’s are buying agency paper ANYWAY (indirectly) when they buy t-bills, why not just get the higher yield directly and buy agencies?”

The reason is simple. Risk. They expect US house prices to continue to fall toward their fundamental levels. As a result, Fanny Mae and Freddie Mac will lose massive amounts of money on the new loans that they make. Lending to US home buyers is extremely risky right now. Check out my blog posting about where we are in the house price bubble right now.

@credulous_prole: “I think the REAL key is for the Fed to make foreign CB’s GREEDY again, and once they entice them into the agency market, the US will be able to stage a pretty.”

Brad wants the foreign Central Banks to switch away from Treasuries toward Agencies. That would be fine. But, if the foreign Central Banks simply buy up more US assets including Agency bonds, that would make our economy worse since it would drive up the dollar, thus decreasing our exports and thereby increasing our trade deficit, which is already a huge drag upon our economy. The effect of lower interest rates on house prices at this point in the house price bubble would be negligible.

The solution is for the United States to balance trade.

]]> By: Ying http://blogs.cfr.org/setser/2008/12/15/this-is-what-a-crisis-looks-like-in-the-balance-of-payments-data/#comment-120406 Ying Wed, 17 Dec 2008 03:33:07 +0000 http://blogs.cfr.org/setser/?p=4214#comment-120406 Why does Chinese banks want investment banking professionals on wall street? Isn't that enough that these people were doing such an good job that destroyed the world economy? Do Chinese banks really want these specialists to learn how to get around regulation and make huge amount of money for themselves? They should be paid as plumbers get from their wages. They know how to make money, but not benefiting the people. Why does Chinese banks want investment banking professionals on wall street? Isn’t that enough that these people were doing such an good job that destroyed the world economy? Do Chinese banks really want these specialists to learn how to get around regulation and make huge amount of money for themselves? They should be paid as plumbers get from their wages. They know how to make money, but not benefiting the people.

]]>