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Credit Busts Exacerbated in Manufacturing Based Economies and Wealthy Countries
"We find a strong link between pre-crisis domestic financial factors (fast private credit growth) and external imbalances (current account deficits) on the one hand and the decline in the growth rate...
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Long Term U.S. Credit Boom Chart
Two cycles of credit booms and busts exist: short term cycles, like those that propelled the savings and loan crisis in the 80s and the real estate boom and bust in the late 00s, along with long term...
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For Every Asset is a Liability
One of the panelists at the Milken Institute’s annual conference said the $62 trillion in assets held by European banks is a bullish factor. However, for every asset, is a liability. The size of...
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Leverage Causes Fat Tails and Clustered Volatility
Stefan Thurner, J. Doyne Farmer, John Geanakoplos “Previous explanations of fat tails and clustered volatility depended on “irrational behavior”, such as trend following. Here instead this comes from...
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Growth in Trade Credit and Debt Guarantees Contributed to 1931 Sterling Crisis
“During the credit boom of the late 1920s, the weakly capitalized [London] merchant banks had guaranteed bills for foreign merchants on an extensive basis because this activity did not necessitate...
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