http://blogs.cfr.org/setser Mon, 13 Oct 2008 04:36:25 +0000 http://backend.userland.com/rss092 en Words no Managing Director of the International Monetary Fund ever wants to utter: “Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown.” (source: FT) Lehman’s default – and the resulting $400 billion run on money ... http://blogs.cfr.org/setser/2008/10/12/on-the-precipice/ Central banks with lots of reserves have not been running away from the dollar. But they do seem to be running away from any dollar asset with a hint of risk. Right now, it is hard not to focus on the relentless slide of the stock ... http://blogs.cfr.org/setser/2008/10/10/scared-sovereign-capital/ The authors of the IMF's World Economic Outlook have a difficult job. They have to forecast the trajectory of the global economy -- itself not an easy task. Their forecast will be judged and evaluated in real time. But the work according to ... http://blogs.cfr.org/setser/2008/10/09/will-the-us-current-account-deficit-fall-faster-than-the-imf-forecasts/ Really crazy. Just read Macro man. The kind of moves in the Brazilian real and Mexican peso that Macro man describes are not exactly normal. But nothing much has been normal recently. One last note: The demands on my time have increased recently, as the number of people looking for ... http://blogs.cfr.org/setser/2008/10/08/it-was-a-wild-day-in-the-foreign-exchange-market/ A few years ago, analysts looking at the same data that Dr. Krugman highlighted started to call the US a hedge fund. It borrowed short-term in dollars, providing the world wit a safe liquid asset (or it was said) and used the proceeds to buy risky assets abroad -- collecting ... http://blogs.cfr.org/setser/2008/10/07/russia-global-lender-of-last-resort-will-russia-bail-out-the-hedge-fund-of-the-north/ I think it is fair to say that we have reached, for all intents and purposes, step 12 of Nouriel Roubini's 12 steps to financial disaster -- i.e. "a cascading and mounting cycle of losses and further credit contraction." Macro-man, speaking of the currency market, says crash. John Jansen ... http://blogs.cfr.org/setser/2008/10/06/the-damage-spreads/ This week's Economics focus notes “Last year just over $2 trillion of capital—direct investments in firms or purchases of bonds, equities and other loans—came from investors outside America, mostly private ones. This was more than enough to cover the $730 billion current-account deficit and leave enough over to finance $1.3 ... http://blogs.cfr.org/setser/2008/10/06/official-flows-now-make-up-the-majority-of-gross-flows-to-the-us/ We aren't there quite yet. At least not on an annual basis. The oil exporters foreign asset growth in 2008 will likely top their 2007 foreign asset growth. But we may not be that far away. On a quarterly basis, the foreign asset growth of ... http://blogs.cfr.org/setser/2008/10/05/peak-petrodollars/ The dollar hasn't fallen along with the US stocks, US Treasury yields or US employment. There is now a broad consensus that the US is currently in a recession, something that might be expected to lead to a fall in the dollar. But the dollar, instead, has rallied. ... http://blogs.cfr.org/setser/2008/10/04/the-worse-the-us-does-the-better-the-dollar-does/ For holding things together. Barely. Bad as things are, they could be worse. Really. By my count, the Fed is now providing about $1.25 trillion in liquidity support to the global financial system. The Fed's latest balance sheet data shows: $80b of repos; ... http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/