Non-farm business productivity fell by 3.2% in the first quarter of 2014, according to the Bureau of Labor Statistics’ revised data. Most commentators have rather ignored this number. You expect productivity figures to be bad when GDP drops unexpectedly, as it did in the first quarter —after all the last such bad number was in […]

Eight years ago, the accountants Ernst and Young got in trouble with the Chinese authorities for estimating the bad debts in the Chinese banking system at $911 billion – it was especially tactless in that the major Chinese banks were mostly within months of doing IPOs in the international markets. Since then, the Chinese bad […]

Since the crash of 2008, huge attention has been paid by regulators to systemic risk, the risk that some event will cause the crash of the entire banking system, not just of an individual bank. Tens of thousands of pages of financial regulations have been written, and almost as many thousands of speeches have been […]

Good times tend to be relatively infertile of new economic ideas. Even radical economists, grinding their teeth at the apparent success of the market, don’t want to be accused of killing the golden-egg-laying goose. Conversely, bad times — lengthy or especially deep recessions – bring out the madmen from the woodwork, and bring with them […]

Extreme policies produce extreme attitudes among investors. Now the nearly six years of zero interest rate policies, accompanied by quantitative easing, that we have seen in most Western economies are producing such an extreme attitude – in the world’s bond markets. Bond investors’ appetites for high yields have grown so far that they are seeking […]