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Global financial system implosion begins

yield said:
Extend and Pretend. Keep kicking the can down the road. Too many vested interests.
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Elections... Calling out that the bent nature of ratings that distorts markets and leaves pensions vulnerable unchanged and culpable in 2008, possibly a vote winner
 
Fannie Mae at risk of needing a bailout
FT 20/02/16
Fannie Mae, the state-sponsored U.S. mortgage backer, is at risk of needing a government bailout that could shake confidence in the housing finance market, senior officials have warned.

Fannie Mae's chief executive and its regulator are sounding the alarm on a decline in the institution's capital cushion, which is on course to vanish in 2018, when it would have to ask the US Treasury for emergency funds.

Their warnings highlight Washington's inaction on housing policy and its failure to reform the institution, which guarantees nearly $3 trillion of securities and enables 30-year fixed rate loans, following the last financial crisis.
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Where's all the good news?
 
Out of ammo?
Central bankers are running down their arsenal. But other options exist to stimulate the economy
Feb 20th 2016
The time has come for politicians to join the fight alongside central bankers. The most radical policy ideas fuse fiscal and monetary policy. One such option is to finance public spending (or tax cuts) directly by printing money—known as a “helicopter drop”. Unlike QE, a helicopter drop bypasses banks and financial markets, and puts freshly printed cash straight into people’s pockets. The sheer recklessness of this would, in theory, encourage people to spend the windfall, not save it.
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Behind the worry that central banks can no longer exert control is an even deeper fear. It is that liberal, centrist politicians are not up to the job.
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" Hurrah for the Blackshirts "

Central bankers on the defensive as weird policy becomes even weirder
Sunday 21 February 2016
Growth is tepid, productivity is poor, and inflation is too low: all is not going according to policymakers’ masterplans.
But the longer this goes on the more the suspicion grows that central bankers aren’t quite so clever as they think they are, and that what is dressed up as a carefully calibrated policy response is really just blundering around in the dark. Central banks have been conducting a gigantic experiment over the past seven years and Tyrie will want to know from Carney whether he actually knows what he is doing. It is a perfectly fair question.
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IMF warns the global economy is 'highly vulnerable'
25 February 2016
The International Monetary Fund (IMF) has said the global economy has weakened further and warned it was "highly vulnerable to adverse shocks".

It said the weakening had come "amid increasing financial turbulence and falling asset prices".

The IMF's report comes before the meeting of G20 finance ministers and central bank governors in Shanghai later this week.

It said China's slowdown was adding to global economic growth concerns.
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Why China Does Not Have a Trade Surplus
Balding a finance blog. 23/02/16
It is likely the PBOC is aware of the discrepancy between Customs and SAFE reported trade data and what the banks are paying via the current account. In his interview with Caixin, PBOC Governor Zhou Xiaochuan was very careful to say that China ran a “surplus in the trade of goods” rather than current account, trade surplus, or payments and receipts for international trade. Many foreign and Chinese agencies and analysts confuse these multiple categories referring to them as one category but they are not. His mention indicates he likely understands how capital is leaving the country and why capital controls would be a poor remedy which is also indicated.
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I doubt that it's even possible for this government to implement the helicopter money measure even if they desperately want to. It would undo the narrative that they have been selling since 2008 and their politics is dictated perhaps even more by narrative setting than it is by material reality.
 
you know they'll just give it to the 'fiscally responsible solvent class' who can be expected to grow this seed capital. No one else will get free money. Which is a shame cos I'd love to spunk some helicopter money up the wall
 
DotCommunist said:
you know they'll just give it to the 'fiscally responsible solvent class' who can be expected to grow this seed capital. No one else will get free money. Which is a shame cos I'd love to spunk some helicopter money up the wall
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"We are broke! Except for this bit here which we are just randomly giving out to you all to stimulate the economy" doesn't really work :(
 
J Ed said:
I doubt that it's even possible for this government to implement the helicopter money measure even if they desperately want to. It would undo the narrative that they have been selling since 2008 and their politics is dictated perhaps even more by narrative setting than it is by material reality.
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I think thats whats meant when "bankers" and "finance experts" say they don't trust "politicians" to do whats required... have heard that said in a few of the links posted...
 
Helicopter money already forms part of the UK narrative, no? Just in a tightly controlled, unhelpful way. That's what the various Help To Buy schemes are.
 
DotCommunist said:
you know they'll just give it to the 'fiscally responsible solvent class' who can be expected to grow this seed capital. No one else will get free money. Which is a shame cos I'd love to spunk some helicopter money up the wall
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If you get helicopter money, spend it on land you can cultivate. Seriously
 
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