... the time the budget commission finishes its work in a year or so the political climate may be quite different than it is today.” Paradox of Deleveraging: Econompic looks at the paradox of deleveraging. “ ... was to reinflate these assets back to ‘fair value’ following the deleveraging of 2008 than these new prices may be sustainable. The issue (in my opinion) is that the goal ...

The Quarterly Banking Profile from the Federal Deposit Insurance Corporation (FDIC) showed a dramatic de-leveraging of bank risk levels in the third quarter of 2009. This is a necessary step in curing part of what ails the banking system — but it is a bitter pill for depositors to swallow. In the third quarter, loan balances

I expect the fears of a Dubai World default to be the first indication of many debt-deflationary shocks to come. The reason for what would appear to be a big overreaction to what is a relatively small problem is that everyone who is anyone in the financial world is thinking that if the legendary sovereign fund of Dubai can't afford to service its debts, then who possibly can? On Wednesday, ...

A blinding affliction can be seen with the gold bugs.  Make reference to a strong dollar and falling gold, and you must be a supporter of the central banks, as well as the powerful families with cross-border tentacles that stand behind them.  In our case, nothing could be further from the truth.  We must put politics and other biases aside if we are to understand the big ...

... on the banking side, but outside of the banks. We’re really getting a process of deleveraging occurring, that my expectation is that that continues. I just thought I’d put ... for prospective homebuyers, and will probably continue to get more difficult, because banks are deleveraging. They don’t want exposure to households, because they’re trying to deleverage while they ...

... S. dollar (and all those currencies currently pegged to it) and create more new money faster than deleveraging can wipe out debt. In theory, Bernanke is just the man for the job. Why? He ... would get Congress good and worried again, and mid-term elections are not far off are they? With another spell of deleveraging, Congress might just back off and let Chairman Bernanke continue his long-slow, back- ...

... of the bailouts is to provide liquidity to insolvent companies, to avoid deleveraging. To understand what that means, we have to understand that for every actual dollar within the economy, in the ... recent oil shock. A smaller economy cannot carry as much debt, and this is part of the reason why we have deleveraging. Once the process of debt going sour gets started, it is hard to stop, and if ...

The Fed observes the banking system has a deleveraging problem. So what does it do? It increases liquidity. Deleveraging and liquidity don’t really cancel each other out. In fact liquidity creates the leveraging problems that later call for deleveraging. Another example. The Fed wants to lower mortgage rates. Instead of opening a window and making mortgage loans ...

... 60-year trend reverses? In fact, I think that is the likely scenario. The deleveraging will take some time...and it won't be fun. "Today' ... take losses from bad debts made during the bubble.) Deleveraging puts pricing pressure on leveraged assets. ... significant amounts of gold. In a post-2008, deleveraging world, it is the unleveraged assets that will outperform against those saddled ...

... to feed into consumer price inflation. Why do deflationists have it wrong ? It is that focusing on the deleveraging of the the debt mountain is a red herring, taken on its own then yes it DOES imply deflation as the debt ... price reaction of 2009 that is NOT what is actually taking place! the Debt bubble is NOT deleveraging, the bad debts are being dumped onto the tax payers! The huge derivatives ...

... a deflationary spiral and revive private sector savings in order to promote deleveraging. There is no magic bullet here.  We are living through a situation unique in time with ... that this Administration has absolutely zero intention of purging any malinvestment or promoting any deleveraging. All they want to do is continue business as usual and go back to the asset-based economy that caused ...

“The great American consumer deleveraging continues,” our colleagues at The 5-Minute Forecast observed yesterday. “The Fed announced that consumer credit shrank for a record ninth month in a row in October.” Consumer credit, as we all know, drives a big chunk of consumer spending, which drives a big chunk of the American economy. Ergo, no credit; no economy. But consumers are not the ...

... prices collapse, leading to a reversal of the feedback loop. Loans go sour, the deleveraging begins, demand for the assets declines further and prices drop even more. The resulting ... institutions, further diminishing credit and investment across a broad range of assets. The resulting deleveraging depresses business and household spending, which weakens economic activity and increases macroeconomic ...

... At least in the US and Europe, the answer is clearly no. Our problem is not a credit boom, but that the deleveraging process has not fully ended. Credit markets are still tight and are ... 8221; Considering his earlier remarks, Mishkin makes a strong case for intervention. After all, deleveraging is a serious problem. But what is the Fed’s alternative; banning deflation? Pumping more ether into ...

... to be underway. Its chairman, Ben Bernanke, is clearly intent on avoiding deleveraging. He has charted a course of massive liquidity injections, financed by hitherto unimaginable levels of ... of both. Should the Administration accept, or even be forced to accept, an ultimately healthy deleveraging, a deep recession would ensue. Entitlements would have to be dramatically reduced while taxes remain ...