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Pink Picks
FT Alphaville — ... The most famous Christmas truce was in 1914, when British and German soldiers climbed from their trenches and wandered into no-man’s land to talk, bury their dead and play football. In the Philippines, Christmas sees a fraught game, as the government and the communist New People’s Army declare a wary and often disputed truce. Willem Buiter:The diminished role of monetary policy The paralysis of financial intermediation today means that monetary policy (cuts in the official policy rates) have become largely ineffective in stimulating demand. Such cuts now appear to have little ...

Reading: Refis, Volcker, Economists, etc.
Paul Kedrosky's Infectious Greed — Some evening/morning reading worth scanning: Why almost no-one got the current crisis. And why a few did. (FT) Dividend cuts fastest since 1950s in U.S. (Bloomberg) Fed risks spitting in wind with new bailout package (Bloomberg) There is no financial services sector. What do we do now? (FT) Volcker tapped for Obama economic advisory role (WSJ) Fed aid sets off a rush to refinance (WSJ) Why fairly valued stock markets are an opportunity (FT) ...

Pink Picks
FT Alphaville — ... Bank of America’s Holger Schmiedingmost argues calls for a big German bang to help save the world defy economic logic, ignore history and disregard the political dynamics. Willem Buiter’s Maverecon Buiter on the essential differences between quantitative easing and qualitative easing, what he calls a “terminological and taxonomic” proposal. ...

Buiter goes pamphleteering
FT Alphaville — ... here, but former Bank of England member and prolific blogger Willem Buiter is poised to make a big push today for the UK to join the eurozone. Buiter is joining 31 academics and financial figures, including BP Chairman Peter Sutherland, and publishing a pamphlet entitled “Ten Years of The Euro — New Perspectives For Britain.” It’s out at 11:30 a.m GMT. There’s something of a preview in the shape of a very short Bloomberg ...

If Ever There Were a Tipping Point in the Nationalisation Discussions...
Angry Bear — Willem Buiter, whose early posts at Maverecon were the epitome of restraint, calls for nationalisation: By throwing cheap money with little conditionality at the banks, the Fed and the US Treasury may get bank lending going again. By subsidizing new capital injections, they reward bad porfolio choices by the existing shareholders. By letting the executive leadership and the board stay on, they further increase moral hazard, by rewarding failed managers and boards that have failed in their fiduciary duties. All this strengthens the incentives for future ...

Stories for 2/09/2009 - Distortions in the Dow, China Wants IMF to Crack Down on Rich States
Economic Discourse — Nissan to Cut 20,000 Global Jobs China Wants IMF to be Tougher with Rich States Good Bank vs. Bad Bank: A No Brainer RBC Predicts we may see 1,000 bank failures within the next few years Distortions in the Dow, some fellow traders and I have been discussing this for the last few weeks and it is a very interesting issue worth checking out Let's start, shall we, with a hypothetical financial apocalypse: Tomorrow afternoon the stock of every publicly traded financial company in America plunges by 90 percent. ...

One Down, One To Go
Macro Man — ... ) or not enough (Willem Buiter.) When everyone disagrees with you, that's usually a sign that you've done the right thing. Certainly the Gilt market likes it; 10 year yields have plummeted 50 bps since the announcement. ...

One Down, One To Go
Daily Markets — ... ) or not enough ( Willem Buiter. ) When everyone disagrees with you, that’s usually a sign that you’ve done the right thing. Certainly the Gilt market likes it; 10 year yields have plummeted 50 bps since the announcement. ...

The Future of Financial Economics
Robert Salomon's Blog — ... With respect to the former, I have been engaged in conversations with folks who echo some of Willem Buiter’s concerns. In a brilliant blog post (see ...

The European fiscal vacuum makes the ECB timid on quantitative and credit easing
VoxEU.org: Recent Articles — ... or indemnity. The opaqueness of many of its arrangements, facilities, and operations undermines Congressional and wider public accountability for this vast commitment of public resources. The Fed should insist on a full Treasury indemnity for any private sector credit risk it assumes. It should also provide a full account of the ex ante and ex post quasi-fiscal subsidies and transfers it has paid to a range of mainly private counterparties. Editors Note: This first appeared on Willem Buiter ...

The fiscal hole at the heart of the Eurosystem
VoxEU.org: Recent Articles — ... Fortis was broken up according to the national location of its activities, with the Dutch state buying 100% of Fortis Nederland and Belgium and Luxembourg doing the same for their local subsidiaries. This repatriation of cross-border banking will become a flood wave if more cross-border banks go under and country A s tax payers refuse to stand behind the balance sheets of subsidiaries of their banks in countries B and C. Editors Note: This first appeared on Willem Buiter s blog Maverecon . Copyedited and reposted with permission. 1 It is possible that no one in the US ...

How much fiscal backing do the key central banks have?
VoxEU.org: Recent Articles — ... and other criminal elements everywhere. This makes for massive seigniorage revenue for the ECB and the Eurosystem. The combination of the obvious willingness of the ECB/Eurosystem to take serious private sector credit risk through collateralised lending to banks and its unwillingness to consider outright purchases of private securities or to engage in unsecured lending to the banking sector is difficult to rationalise. Editors Note: This first appeared on Willem Buiter s blog Maverecon . Copyedited and reposted with permission. This article may be reproduced with appropriate ...

Macroeconomic Meltdown?
Economist's View — ... Willem Buiter ... complains that macroeconomists have simply discarded the difficult stuff to make their models more elegant: “They took these non-linear stochastic dynamic general equilibrium models into the basement and beat them with a rubber hose until they behaved.” ...

Readings: Macroeconomics, Chinese steel, SEBI vs. NSDL
GalaTime — ... Willem Buiter, a former member of the UK’s Monetary Policy Committee who blogs for the FT, complains that macroeconomists have simply discarded the difficult stuff to make their models more elegant: “They took these non-linear stochastic dynamic general equilibrium models into the basement and beat them with a rubber hose until they behaved.” ...

My Favourite Economic and Financial Blogs
The Prudent Investor — ... is written by the critical and often contrarian investor himself. It came to my attention because he now also twitters (@marcfaber). Market Skeptics, discovered yesterday, is exactly that. Their post about Dubai's gold shows they browse for the right information destined to be major fundamental events. Market Ticker never fails to write about current market events in an informative, sometimes rude but always entertaining style. One of my top 5 blogs. Maverecon is my favorite of all blogs on the Financial Times website. Miscellaneous Economic ...

Guest Post: The Perils of Linear Projections?
naked capitalism —

The retrospective Buiter
FT Alphaville — Willem Buiter, former member of the Bank of England monetary policy committee, economist and FT ‘Maverecon’ blogger on Wednesday looked back through his voluminous works and commented thus (our emphasis): Like most authors, I tend to cringe when I read something I wrote more than a few years ago.  But when engaging in some authorial auto-archeology recently when preparing the index for a new paper ( after all, if I don’t cite myself, who will? ), I was pleasantly surprised with a few bits from a paper I wrote in 1999 and published in 2000 in the Bank of England’s ...

Trichet on the ECB’s rubbish assets
FT Alphaville — As Maverecon professor blogger Willem Buiter has been writing for a while, the ECB is uniquely different to other central banks in terms of the unconventional credit easing operations it has been conducting during the crisis, and as far as its positioning on the way into the crisis. As Buiter has stressed, the ECB has accepted all manner of unconventional collateral (mortgage-backed securities et cetera) at its liquidity windows since inception. But here in a paper by ECB president Jean-Claude Trichet presented in Munich this week is, in startling clarity, to ...

The problem with economics
FT Alphaville — ... much of the past 30 years,  macroeconomics was “spectacularly useless at best, and positively harmful at worst.” Not surprisingly for a piece about economics and economists, the article doesn’t quite reach a conclusion, but the arguments therein are worth reading (as are the comments). Related links: The other-worldly philosophers - Economist Efficiency and beyond - Economist On the (de)merits of smalls banks in developing countries - FT Alphaville Willem Buiter’s Maverecon blog - FT.com

Guest Post: Are Financial Blogs Trustworthy?
naked capitalism — ... trustworthy. But the whole debate about blogs versus mainstream media is nonsense. In fact, many of the world’s top PhD economics professors and financial advisors have their own blogs. For example (in no particular order): Nouriel Roubini Paul Krugman Nassim Nicholas Taleb Simon Johnson Frank Shostak Willem Buiter Tyler Cohen ...

Are Financial Blogs Trustworthy?
The Big Picture — ... aren’t trustworthy. But the whole debate about blogs versus mainstream media is nonsense. In fact, many of the world’s top PhD economics professors and financial advisors have their own blogs. For example (in no particular order): Nouriel Roubini Paul Krugman Nassim Nicholas Taleb Simon Johnson Frank Shostak Willem Buiter Tyler Cohen ...

Pink picks
FT Alphaville — ... A recent paper by the International Monetary Fund shows a one-to-one inverse relationship between so-called “asset income” and the money people save from their pay cheques every month. The richer you feel, the less you save. Willem Buiter’s Maverecon: What can be done to enhance QE and CE in the UK, and who decides? Quantitative easing (QE - the purchase of government securities by the central bank, financed through increases in base money) in the UK is not working.  I should have written “not yet”, for posterior coverage reasons, but I’m running out of patience with a policy ...