Here’s a very powerful paragraph from Nomura economist Richard Koo: I have pointed out previously that mini-bubbles can occur during a balance sheet recession. During a usual monetary policy-driven market, money created by an accommodative central bank typically spreads throughout the economy and lifts markets. During a balance sheet recession, […]
The Federal Reserve shocked market participants in September with its decision to refrain from tapering quantitative easing, as many felt that the central bank had signaled the move at its June meeting. Fed chairman Ben Bernanke sparked a sharp rise in long-term interest rates at the June press conference by […]
Last Wednesday, the Federal Reserve shocked markets with a surprise decision to refrain from beginning to taper back the pace of its bond-buying program known as quantitative easing. In the press conference following the decision, Fed chairman Ben Bernanke cited the recent rise in long-term interest rates — spurred by […]
They're paying the price for past mistakes.
A two-step plan.
One consequence of hitting the "Lewis Turning Point."
Too many hedge funds just closing their short-euro trades and moving on to the yen.
Will his concept of the balance sheet recession be debunked?
Commit to fighting inflation? What?
[credit provider=”INETeconomics / YouTube” url=”http://www.youtube.com/watch?v=5zCJy84Yvvo”] Japan’s yen has been sinking, and its stock market has been surging ever since late last year when Japan established its intentions to pursue easy monetary policy to stimulate its economy.However, it’s interesting to note that these massive market moves are occuring even though Japan […]
In his latest research note, Nomura Chief Economist Richard Koo – who pioneered the concept of “balance-sheet recession” – says he feels the need to respond to those who are saying that the age of private-sector deleveraging in the U.S. is over.
The buzz in the media is non-stop: Fiscal Cliff, fiscal cliff, fiscal cliff.
Nomura economist Richard Koo is out with a new note that treads a lot of familiar ground.
Richard Koo, Chief Economist of Nomura Research Institute, has had a pretty simple and consistent thesis for years: private sector balance sheets are plagued by huge debt overhangs, and as they delever, the government must borrow and spend to prevent a deflationary spiral.
Richard Koo is the Nomura economist who is famous for his theory of the “balance sheet recession”, the idea that busts like ours or Japan’s are the result of the private sector deleveraging and need to be counteracted with aggressive fiscal policy.
[credit provider=”Bloomberg”] In his new note, Nomura’s Richard Koo comments on the fiscal cliff (the automatic spending cuts and tax hikes that will kick in this year if Congress doesn’t do anything), and a CBO report that anticipates a mild recession if that happens….I think the CBO estimates of a […]
In his latest note, Richard Koo warns that the economic malaise in Europe threatens democracy itself: