Comments on: Yes Virginia, there was an international financial crisis in 2007 and 2008

By: Hal

Hal — Wed, 24 Jun 2009 16:09:11 +0000

Why don’t you use graphs that expand in size when one clicks on them? As they are, they are difficult to read.

By: Brad Setser: Follow the Money » Blog Archive » Yes Virginia, there … | 中国风投

Wed, 24 Jun 2009 03:26:49 +0000

[...] the original post here: Brad Setser: Follow the Money » Blog Archive » Yes Virginia, there … (No Ratings Yet) Loading [...]

By: DOR

DOR — Wed, 24 Jun 2009 01:44:18 +0000

When considering the two-way benefits of trade, it is far too common to simply ignore the benefits to the consumer.

Increase the cost of living by the difference between imported products and domestic ones, and see what kind of standard of living arises.

By: Ying

Ying — Tue, 23 Jun 2009 23:43:37 +0000

So the negative sentiment dominates the market again and the stock market will start another round of stumbling downward? Commodity price will move in the direction depending on the decisions of China? I am wondering who is trading in S&P stock market right now.

By: Cedric Regula

Cedric Regula — Tue, 23 Jun 2009 22:43:20 +0000

2 year auction results are in.

$40B of 2 yearlings sold like hot cakes, actually strengthening in price. 68%were “indirect bid”, the CB plus biggy category.

Rates fell big at the long end. It’s either deflation or the carry trade.

Fed meeting the next couple days and the ECB sells a bunch of bonds tomorrow. Macro Man covering that one.

Only anomaly is the buck dropped big today. Both against major and minor categories. Only thing that comes to mind is they fear “event risk” of what Bernanke may tell us.(clue: it’s NOT a rate hike.)

By: bsetser

bsetser — Tue, 23 Jun 2009 22:03:45 +0000

barring a depression, imports and export should stabilize before they get to 5% of GDP (a cumulative fall of about 60-70% … ouch). green shoots got overplayed, but the “free fall” of q4 and q1 did end in q2. Things didn’t get worse at the same pace — even if they still haven’t gotten a lot better.

By: FollowTheMoney

FollowTheMoney — Tue, 23 Jun 2009 20:57:45 +0000

We’re in line for both imports and exports to contract below the 5% level as the consumer continues to tighten the belt. The question is will china be hurt more than the u.s. as exports deteriorate? My guess is yes, my thoughts is many people are too optimistic on the 2009 internal domestic demand structure in China…

@ DJC

it’s truly not in China nor U.S. interest to engage in economic warfare. I don’t know about everyone on this board, but i’d rather go for non-polarity rather than a “new superpower” aka China…Although we in the United States have lived beyond our means, the majority of the people in this nation are good people. that’s my 2 cents.

By: bsetser

bsetser — Tue, 23 Jun 2009 16:34:52 +0000

rien — there was a lot of volatility in net private (and net official flows) in the 70s. gross flows were more volatile recently — but the linked fall in outflows and inflows limited the volatility in net flows. the partial answer to guest’s question is that a lot of the flows were tied to the expansion of the shadow financial system in the uk. when conduits blew up, so did gross flows -as lots of vehicles (and european banks) funded their purchases of long-term us securities by selling s-term paper. the rise of london as an offshore center for the us (not just an offshore center for global dollar deposits from ems and petrostates) contributed to the expansion of gross flows.

andrew — it varies. two way flows linked to the creation of an offshore intermediary aren’;t that linked to trade flows. a us banks that sets up a vehicle to borrow from us money market funds and buy l-term us debt isn’t generating any net inflow. the same business could have been done on shore and on balance sheet. but to the extent this was part of the chain of risk taking that allowed us households to borrow more than they earned, it indirectly still supported the us household and thus the us external deficit. it all goes back to some of the concepts in the brender and pisani paper.

By: Tuesday links: mistakes traders make Abnormal Returns

Tuesday links: mistakes traders make Abnormal Returns — Tue, 23 Jun 2009 16:15:12 +0000

[...] “One thing though is sure: the scale of the collapse in private financial flows the experienced during this crisis is entirely unprecedented.” (Brad Setser) [...]

By: DJC.

DJC. — Tue, 23 Jun 2009 15:41:03 +0000

With private capital exiting the US Economy, shouldn’t the US Foreign policy elites drop their hostile and antagonistic line towards the Chinese. In order to keep China investing in US Treasuries to finance record budget deficits, it might be helpful not to criticize your creditor. If the Washington Consensus elites are really concerned about foreign capital dependence, than the United States needs to abandon its expensive global supercop presence across East Asia and the Middle East. At this juncture in history, the US cannot possibly economically or militarily “contain China from becoming the largest economic superpower in the world”.