Links–9 March to 31 March

A round up of tweeted information of Central Bank quarterlies, research and views on secular stagnation, income inequality, monetary policy and interest rates, markets, economies and assets and financial services regulation including the tug of war between best interest standards and “suitability”….and much much more!

BIS Quarterly Review March 2015

“Total debt oil and gas sector globally stands at roughly $2.5 trillion, 2 1/2 times what it was at end of 2006.”

“total amount of buybacks by non-financial corporations..for the euro area, UK..Japan almost seven times smaller than that by US firms”!!!

Bond issuance and share buybacks in the US move in tandem – nice table in BIS report p29

“Oil and gas firms accounted for sig share of int debt securities by emerging market borrowers in recent years”

“Largely unexpected, a wave of monetary policy easing over past few mnths has taken centre stage in glbl fin markets”

“Net of repayments cumulative interntl debt sec’s issuance in 2014 was $178 bln for advanced econ’s and $359 bln for emerging markets”…”Bank lending has thus resumed its role as key vehicle for global liquidity”

Global Liquidity & bubbles

Interview with Dr William White, former Head of the Monetary and Economic Department at the BIS Part 1 (Cobden Centre)

“If you ratchet down, time after time, you’re going to hit the ZLB and what are you going to do then?”

“central bankers know our econ’s do not face liquidity prob but solvency prob linked to excessive debt accumulation”

Financial repression: the unintended consequences (Swiss Re)

“Policymakrs face trade-off betwn supportng econ rec & contributng to further potntial build-up fin & econ imbalnces”

“Current high levels of fin repression create sig costs & lower…investors’ ability to channel funds into real econ”


Breaking the Triple Coincidence in International Finance∗ (BIS)

Low rates will trigger unrest as central banks lose control – BIS (Telegraph)

Central banks and the global debt overhang (BIS Nov 2014)

The Endogenous Finance of Global Dollar-Based Financial Fragility in the 2000s: A Minskian Approach (UMASS)

Perma-bear or just worried about the debt? – Part 1 MBMG

Secular Stagnation & Savings Glut

Supply policies at the zero lower bound (Breugel)

The Equilibrium Real Funds Rate: Past, Present and Future

“U.S. real rates averaged 4.2% before World War I and only 1.3% since World War II.” p 17

“typical models assume chnges in trend infl rate have no effect on real IR;assumptn that turns out to be hard to reconcile wth observd data”

“the relation betwn average output grwth and average real rates is so noisy that other factors play a..dominant role”

Secular Stagnation: Facts, Causes and Cures (CEPR) – reading this again


The Global Saving Glut and the U.S. Current Account Deficit (Bernanke 2005)

Global imbalances and the financial crisis: Link or no link? (2011 BIS paper)

“the excess savings view tends to overestimate and miscast the role of current account imbalances in the crisis”

“”the main contributing factor to the fin crisis was not “excess saving” but the “excess elasticity” of the international mon & fin system:”

Global Savings Glut or Global Banking Glut- (naked Capitalism 2011)

Did the savings glut or massive monetary expansion cause the boom and the bust? (Cobden Centre)

Capital Flows, Consumption Booms and Asset Bubbles: A Behavioural Alternative to the

Global liquidity glut or global savings glut? A structural VAR approach (ECB)

Debunking The Global Savings Glut Theory

Savings Glut Hypothesis (NBER)

Asian Officials Reject Focus on Savings Glut (WSJ from 2009)

Debunking the ‘Savings Glut’ Thesis (from 2011)

The New Depression: The Breakdown Of The Paper Money Economy (Richard Duncan)

Why a savings glut does not increase savings (Michael Pettis)


Income inequality

When a Rising Tide Sinks Most Boats (Levy Econ Inst)

“Thomas Piketty Says Labor’s Share of Income Is Declining, But Is It?” (WSG)

Bank of England Quarterly Bulletin: Capital in the 21st Century P 36

“What drives the bubble component of wealth? How does the bubble component affect investment, growth and welfare?”

“Wealth may have been productive capital in the past. But it is now a mix of productive capital and ‘bubble”

“puzzling inefficiency in education one of reasons that US,UK + Canada have experienced rising income inequality”

“there is a smaller group of countries where people’s incomes are relatively equal before taxes and transfers”.

Europe’s social problem and its implications for economic growth (Breugel)

Monetary and Interest Rates

The Principal And Interest On Debt Myth (Forbes..Steve Keen)


Why are interest rates so low, part 2: Secular stagnation (Ben Bernanke)

Yellen’s new argument on rates leaves inventor scratching his head

Conducting Monetary Policy with a Large Balance Sheet (Federal Reserve)

Recent Developments in U.S. Monetary Policy: From Extraordinary Back to Ordinary (Fed Res Cleveland)

The Fed Still Needs to Figure Out How to Raise Rates (Bloomberg)

The topsy-turvy world of the Fed’s exit strategy: all too familiar to emerging countries (Helicopter Money)

The Fed Exit Monitor V.2

There’s No Money In Monetary Policy, But There Are Feelings & Reverse Repo As A Fairy Tale (Alhambra Partners)

A New Operating Framework for the Federal Reserve (Joseph Gagnon and Brian Sack) (Monetary Realism)

Fed explores overhaul of key rate (FT)

New York Fed Announces Changes to How It Calculates Fed Funds Benchmark (WSJ)

Trade Dynamics in the Market for Federal Funds Feb 2012

 Interest rate pass-through since the financial crisis (BIS)

Decoupling between the Federal Funds Rate and Long-term Interest Rates: Decreasing effectiveness of Monetary Policy in the U.S. (UMASS)

Interest rates may be cut, suggests Bank of England chief economist (Guardian)

Commodity Prices and the Mistake of 1937: Would Modern Economists Make the Same Mistake? (Liberty Street Economics)

Grand Central: BOE Policy Makers Share Worries Over Stronger Currency WSJ

When Will The ECB Start To Taper? (Edward Hugh)

Japan’s Accounting Problem (Project Syndicate) or “Monetization is the end of Capitalism

Negative rates and financial intermediation (Breugel)

Shadow Banking

Stanley Fischer: Nonbank financial intermediation, financial stability, and the road forward (BIS)

Shadow banking morphs and grows, confounding authority (via @macropru)

Understanding the role of debt in the financial system (BIS) VIA @schulte stef

Bonds and High Yield, Equities, markets and other assets

Canadian Junk Market Freezes as Poloz Compounds Oil Collapse 

Investor demand strong for highly leveraged U.S. loans

How Scary Is the Bond Market? (Shiller)

Corporate Investment and Stock Market Listing: A Puzzle?

Why are real assets so popular? Benefits Canada

Real Estate Reinvents Itself Newsweek

Canada pension fund breaking away from low-yield bond market

Pension funds swoop in on downtown Toronto condo towers as rental market heats up (National Post)

Follow the Interest Rates (Edward Hadas)

In the thRoEs of change: measuring profitability (Baringa)


Pity the Poor Fed (FT) – Andrew Smithers talks about lower GDP growth potential in the US and what this means for interest rates.

“”The combination of productivity+demography tell us that the party’s over now..this time it never really got going.”

The improvement in US jobs market is quantitatively huge but qualitatively mediocre (M&G)

Ernst & Young Eurozone Forecast..Outlook For Financial Services

The battle for the eurozone’s soul: a reading list (

Banks Offload Crisis Debt Relics in Sign of European ABS Revival (hat tip @tyillc)

Presenting an agenda for Europe at AMBROSETTI (Lake Como, 14th March 2015) via @ProfsteveKeen

Morgan Stanley Copper Price Outlook

The Coming China Crisis (Democracy)

Eh is not OK (Otterwood Capital)

The changing pattern of foreign investment in China (John Ross)

Household Debt Soars in Canada, “Stability” at Risk (wolfstreet)

Defusing a bomb (Economist)

China Debt & Pain (FT)

Debt. What is it Good For? Some Surprises (Hahn Investment Stewards)

Reviving EU Fiscal Policy: 10 Ways To Strengthen Public Investment (Social Europe)

Hedge funds opt for predictability over risk (FT)

Other & Fidicuary

Fed Says Fannie and Freddie Have Not Repaid Taxpayers (WSG)

Some advisers behaving badly with CRM2 on the horizon (Globe & Mail)

Advisors Should Feel Able To Report Elder Abuse, Senator Says

The 21st Century’s Railroad Barons: Exploring Wall Street’s Conflict of Interest Problem ( via CFA Private Wealth

SEC Head Backs Fiduciary Standards for Brokers, Advisers (WSJ)

How firms document risk management and suitability practices needs to change (Investment News)

Making Brokers Toe the Mark (NYT)

 Is Finance a Noble Profession? A Summary of the Online Forum (CFA Institute)

Canadian bank ombudsman’s job is thankless – and powerless (Globe & Mail)

The Art of Giving and Receiving Advice (HBR)

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