Comments on: The faster the rise, the bigger the fall? http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/ Thu, 14 Oct 2010 13:09:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Michael http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133637 Michael Tue, 28 Jul 2009 02:11:37 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133637 2009 is shaping up so far as a huge year for new gov't debt issues by the EMs. This is partly to cover their own stimulus and subsidy practices (much like the U.S., etc), but also to take advantage of low interest rates and bounceback appetite for investment in EMS (who are at least growing). 2009 is shaping up so far as a huge year for new gov’t debt issues by the EMs. This is partly to cover their own stimulus and subsidy practices (much like the U.S., etc), but also to take advantage of low interest rates and bounceback appetite for investment in EMS (who are at least growing).

]]> By: bsetser http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133628 bsetser Mon, 27 Jul 2009 21:35:32 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133628 they have data on banks claims on various countries and bank liabilities to various countries, so one can calculate the net. but it isn't the easiest data set to use they have data on banks claims on various countries and bank liabilities to various countries, so one can calculate the net.

but it isn’t the easiest data set to use

]]> By: jonathan http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133621 jonathan Mon, 27 Jul 2009 19:14:23 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133621 I find BIS material kind of painful to go through, not to mention that I don't have the time or energy to go through their unreally long publications. Do they break the net position down by region / country? I find BIS material kind of painful to go through, not to mention that I don’t have the time or energy to go through their unreally long publications. Do they break the net position down by region / country?

]]> By: Yoda http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133619 Yoda Mon, 27 Jul 2009 16:20:33 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133619 may be stupid China is too slow to realize this. Treasury is issuing quarter Trillion a week, 8 weeks+ will issue enough to cover 2-3 Trillion debt we owe to China. another 4-5 weeks, Treasury will issue enough to cover all debt from Russia or Japan. That will mean absolute loss for debt holders. may be stupid China is too slow to realize this. Treasury is issuing quarter Trillion a week, 8 weeks+ will issue enough to cover 2-3 Trillion debt we owe to China. another 4-5 weeks, Treasury will issue enough to cover all debt from Russia or Japan. That will mean absolute loss for debt holders.

]]> By: Yoda http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133618 Yoda Mon, 27 Jul 2009 16:02:51 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133618 http://www.rgemonitor.com/roubini-monitor/257362/my_interview_with_ferguson_and_zuckerman_on_fareed_zakarias_gps_program_on_cnn#readcomments daisy chain comment -> avoid dollar and usa local/state/gov short/long debt. you will get burned. http://www.rgemonitor.com/roubini-monitor/257362/my_interview_with_ferguson_and_zuckerman_on_fareed_zakarias_gps_program_on_cnn#readcomments

daisy chain comment -> avoid dollar and usa local/state/gov short/long debt. you will get burned.

]]> By: bsetser http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133617 bsetser Mon, 27 Jul 2009 14:51:09 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133617 D Gross -- the increased confidence of the wealthy elite of key EMs in their own countries economies and currencies is certainly part of the story. That inflow normally would lead to a currency appreciation. that outflow also would show up as a flow out of the international banking system in most cases. though in some EM coutnries, I have heard that some businesses/ individuals that own busniesses like to have offshore accounts and then in effect lend their own money back to their own business via the int. banking system, so a rise in confidence in the home country might show up as more lending (i.e. more bank claims on EMs), not fewer EM deposits in the int. banking system. of course if the inflow gets recycled back into the reserves and thus into gov. deposits in the int. banking system, a rise in lending by the banks to EMS is offset by a rise in EM deposits in the banks. D Gross — the increased confidence of the wealthy elite of key EMs in their own countries economies and currencies is certainly part of the story. That inflow normally would lead to a currency appreciation.

that outflow also would show up as a flow out of the international banking system in most cases. though in some EM coutnries, I have heard that some businesses/ individuals that own busniesses like to have offshore accounts and then in effect lend their own money back to their own business via the int. banking system, so a rise in confidence in the home country might show up as more lending (i.e. more bank claims on EMs), not fewer EM deposits in the int. banking system.

of course if the inflow gets recycled back into the reserves and thus into gov. deposits in the int. banking system, a rise in lending by the banks to EMS is offset by a rise in EM deposits in the banks.

]]> By: D Gross http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133614 D Gross Mon, 27 Jul 2009 12:00:46 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133614 Don't forget there was a lot of private investor money (wealthy or connected Brazilians, Russians, etc) that was in Miami, NY, Switzerland and Cyprus sitting in hard currency. As the boom got underway, these locals got confident in their home currencies and began investing in their home markets, taking money out of Dollars and Euros. Their central banks bought these Dollars to stop the local currencies from rising. I would guess that perhaps up to $100 billion of the impact is just a shift from international banks holding private deposits from EM investors looking for safety to international banks holding deposits for EM central banks forced by their mercantilist policies to intervene. For decades it used to be hard to find anyone more bearish on Brazil than a wealthy Brazilian (non-government or non-academic). That all changed over the last 5 years. Don’t forget there was a lot of private investor money (wealthy or connected Brazilians, Russians, etc) that was in Miami, NY, Switzerland and Cyprus sitting in hard currency. As the boom got underway, these locals got confident in their home currencies and began investing in their home markets, taking money out of Dollars and Euros.

Their central banks bought these Dollars to stop the local currencies from rising. I would guess that perhaps up to $100 billion of the impact is just a shift from international banks holding private deposits from EM investors looking for safety to international banks holding deposits for EM central banks forced by their mercantilist policies to intervene.

For decades it used to be hard to find anyone more bearish on Brazil than a wealthy Brazilian (non-government or non-academic). That all changed over the last 5 years.

]]> By: The faster the rise, the bigger the fall? | Mortgage Loans Equity .Net - Home Mortgage, Home Loans, Home Equity & Mortgage refinancing http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133605 The faster the rise, the bigger the fall? | Mortgage Loans Equity .Net - Home Mortgage, Home Loans, Home Equity & Mortgage refinancing Mon, 27 Jul 2009 03:08:38 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133605 [...] Read more here - The faster the rise, the bigger the fall? [...] [...] Read more here – The faster the rise, the bigger the fall? [...]

]]> By: Too Much Fed http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133604 Too Much Fed Mon, 27 Jul 2009 02:05:12 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133604 "Especially as the swing reflected extremely rapid growth in cross border lending to the emerging world, and a lot of those loans were quite short-term …" Did something similar happen during the Great Depression? Maybe Smoot-Hawley gets too much of the blame for the fall in global trade back then? “Especially as the swing reflected extremely rapid growth in cross border lending to the emerging world, and a lot of those loans were quite short-term …”

Did something similar happen during the Great Depression? Maybe Smoot-Hawley gets too much of the blame for the fall in global trade back then?

]]> By: Too Much Fed http://blogs.cfr.org/setser/2009/07/26/the-faster-the-rise-the-bigger-the-fall/#comment-133603 Too Much Fed Mon, 27 Jul 2009 02:02:51 +0000 http://blogs.cfr.org/setser/?p=5991#comment-133603 "But there may be a simpler explanation for the fall in cross-border claims: the boom was unsustainable." Replace "boom" with "debt boom"? Don't tell that to paulson, bernanke, greenspan, and the rest of the fed because they don't believe that such a thing is possible. Aren't they trying to reinflate the lower and middle class debt boom right now? “But there may be a simpler explanation for the fall in cross-border claims: the boom was unsustainable.”

Replace “boom” with “debt boom”?

Don’t tell that to paulson, bernanke, greenspan, and the rest of the fed because they don’t believe that such a thing is possible.

Aren’t they trying to reinflate the lower and middle class debt boom right now?

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