Monthly Archives: May 2010

Plans A, B and C

Plan A is the current official approach to Greece. It provides eur 110 bn in official loans for an initial 3-year period to sustain deficits which cannot be financed in the market. (The funds are charged at 3-month euribor +300 … Continue reading

Posted in Uncategorized | Leave a comment

Stephen Roach: The USA is the problem

Great discussion between Martin Wolf and Stephen Roach over at Bloomberg.com. Is the US/China bilateral trade imbalance due to inadequate US savings or Chinese currency policy? I’ve got a lot of time for both sides, which is frustrating. But here’s … Continue reading

Posted in Uncategorized | Leave a comment

The euro debate at Economist.com

Worth checking out. Just a few quick things to add. Wyplosz notes that if Greece leaves the euro, then its new currency will depreciate sharply against the euro, in which case: The new GDP, measured in euros, will therefore decline … Continue reading

Posted in Uncategorized | Leave a comment

Sachs: ‘We need to keep our heads in the sand’

When it comes to policy advice, be wary of Sachs. This is the man whose shock therapy did wonders for Russia. How apropos to the current debate. If I recall correctly, it was only when Russia kicked out Sachs, defaulted … Continue reading

Posted in Uncategorized | Leave a comment

The global debt structure — a house of cards?

There’s plenty that separates the 1930s from today’s business cycle. Unfortunately, “debt” isn’t one of them. I’m writing this because I think we are at a critical juncture where policymakers can either get out in front of this thing — … Continue reading

Posted in Uncategorized | Leave a comment

Red alert for public sector workforce

“Unaffordable” contracts between the state and its civil service seem like a coming step in the ‘great deleveraging’. Not just in Greece: Having pared the budget to the bone, the city of Stockton, CA has resolved that it can no … Continue reading

Posted in Uncategorized | Leave a comment

Respectfully disagree (posting before a hiatus)

One reason for being optimistic about the fate of the euro is that leaving the monetary union would be a dramatically disastrous event for every one. Barry Eichengreen has written the definitive description of what that would entail.  Greece, if it were … Continue reading

Posted in Uncategorized | Leave a comment

The fate of EMU is a policy variable

In polite conversation one often tends to moderate one’s view, in deference to the “golden mean” — the notion that the truth in any debate must lie between the two extremes. This is clearly not always appropriate. In a debate over … Continue reading

Posted in Uncategorized | Leave a comment

The crisis: an “enormous” structural reform opportunity

From people close to Greece and Spain in particular the sentiment is strongly expressed that the crisis today presents an “enormous opportunity” finally to push through reforms which have been long promised but undelivered, because of the usual near-term pain … Continue reading

Posted in Uncategorized | Leave a comment

“I’m a married, 55-year-old planning on early retirement….

What would you do if your nest eggs are in a mix of stocks (30%), bonds (65%) and cash (5%)? I still haven’t recovered from the 1996 recession.” Questions like this are beyond me. But they are useful as a … Continue reading

Posted in Uncategorized | 4 Comments