click here for audio
Saturday, January 16, 2010
A global fiasco is brewing in Japan
I have felt rather lonely after suggesting in my New Year Predictions that Japan is dangerously close to blowing up on its sovereign debts, with consequences that will be felt across the world.
My intended point — overly condensed — was that 2010 will prove to be the year that Japan flips from deflation to something very different: the beginnings of debt monetization by a terrified central bank that will ultimately spin out of control, perhaps crossing into hyperinflation by the middle of the decade.
So it is nice to have some company: first from PIMCO’s Paul McCulley, who said that the Bank of Japan should buy “unlimited amounts” of long-term government debt (JGBs) to lift the country out of a “deflationary liquidity trap” and raise the souffle again. (more)
Why Minds Like Soros, Shiller Fear Wealth Destruction
A wide range of luminaries from hedge fund legend George Soros to Yale economist Robert Shiller see grave economic danger ahead.
MarketWatch.com put together a list of their bearish thoughts, and here is what three of them had to say.
Soros says we’ve just finished 25 years of excess.
“The system is broken,” he wrote in his book “The New Paradigm for Financial Markets.” (more)
MarketWatch.com put together a list of their bearish thoughts, and here is what three of them had to say.
Soros says we’ve just finished 25 years of excess.
“The system is broken,” he wrote in his book “The New Paradigm for Financial Markets.” (more)
Is a U.S. Default Inevitable?
We were blindsided. We never saw it coming.
So said Goldman Sachs CEO Lloyd Blankfein of the financial crisis of 2008. He likened its probability to four hurricanes hitting the East Coast in a single season.
Blankfein was reminded by the chairman of the Financial Crisis Inquiry Committee, Phil Angelides, that hurricanes are “acts of God.” Financial crises are manmade. Yet Blankfein was backed up by Jamie Dimon of JP Morgan, who said, “Somehow, we just missed … that home prices don’t go up forever.” (more)