Tag Archive for: sovereign debt crisis

Cyprus Collapse Triggers Unintended Consequences

Some people believe that by imposing losses on investors and reducing the Cyprus banking system liabilities, the European powers have addressed the problems in Cyprus (if harshly). Others think that it was just an unjust tax on depositors. I have written about the sequence of events. Cyprus banks borrowed money and bought Greek government bonds. […]

Cyprus Forced Into Bailout Deal

Do you think that depositors in Cyprus are being taxed? That their money is being taken from them to go to the government in Cyprus or to Europe? Most analysis of the Cyprus bailout is wrong on this point. Cypriot banks are like all banks in one respect. They raise capital to buy assets that […]

Cyprus Targets Its Savers in Bailout Agreement: Part I

After markets closed on Friday, it was announced that Cyprus worked out a deal with the European Central Bank, European Commission, and the International Monetary Fund (“the Troika”). Here is a typical article reporting on the story. Cyrpus has been in desperate need of a bailout, and was in discussions as early as June last […]

U.S. Deficit / GDP

A group called “Being Liberal” posted the following graph to Facebook purporting showing how deficit as a proportion of GDP has fallen from 10% to 4%. The caption implies two things: 1) most Americans are simply ignorant if they think that there is a borrowing or debt problem 2) the deficit is falling (the caption […]

Don’t Short the Treasury Bond Just Yet

Keith Weiner discusses why interest rates prior to 1933 was set by the marginal saver and how the saver was removed from this process post 1933.

Japan Announces Purchase of European Bonds

Japan will buy the bonds of the so-called “European Stability Mechanism”.  (See http://www.bloomberg.com/news/2013-01-08/japan-to-buy-esm-bonds-using-forex-reserves-to-help-weaken-yen.html ) The ESM is an 80 billion euro pool of capital that can be levered up to 700 billion euros by selling bonds.  Supposedly, 200 billion has to be kept safe but that remains to be seen.  The ESM is a mechanism […]

The Trillion Dollar Coin

There has been much buzz in the past few days about a truly horrible idea.  Instead of having to negotiate with Congress to raise the debt ceiling so the Treasury Department can sell more bonds to pay for more spending, why not just mint a trillion-dollar platinum coin?  This coin would contain one ounce of […]

Congress Passes Fiscal Cliff Deal

We now see who are “millionaires and billionaires” in practice. They are individuals with income over $400,000 or married couples with income over $450,000. Their top tax bracket rises from 35% to 39.6%, an increase of 13%. The capital gains tax rate goes from 15% to 20%, an increase of 33%. The temporarily reduced payroll […]

Reflections Over 2012

The last workweek of the year is complete. Beers were had with friends yesterday, Friday evening. The final shopping trip to the mall was completed today, followed by a good meal with my wife. Now I find myself in a reflective mood, and this is a perfect time to reflect on what an incredible year […]

KeithGram: The ‘Crash JP Morgan’Campaign’

It is now the second anniversary of a campaign to “crash” JP Morgan by encouraging people to buy silver (see max Keiser http://www.youtube.com/watch?v=H4IBUTHyROs). The idea is that JP Morgan has a large naked short position in silver. If people buy physical silver it will drive the price up and deprive JP Morgan of the metal […]