Tag Archive for Contagion

Worst Case Scenario Response – Here’s the best case. But how likely?

Earlier today I asked, “So let’s take a contrarian view. What’s the best case scenario. Thoughtful responses get posted on WSE. Since everybody expects the worst, how might “everybody” be surprised? When all the experts say the same thing, remind me, how often are they right?” The learned Jimi gave the following response: Best case…

Businessweek’s “How Europe’s Contagion May Hit the U.S. Economy” Ignores its Benefits to US Economy

Businessweek argues that the European crisis is hurting the US economy. It ignores ignores the fact that European capital flight is driving US interest rates through the floor, and more importantly, directly funding US government deficit spending. Even a small reduction in that spending would result in a stall in the US economy. The US…

Cleaning up the mess: Bank resolution in a systemic crisis | vox – Research-based policy analysis and commentary from leading economists

The diabolic loop between the solvency of the banking system and the sovereign fiscal position is now apparent (Lane 2012). In Greece, it is the insolvency of the government that has sunk the banks; In Spain, the banks are sinking the government. What is common in both countries is that savers are running away when…