Saturday, September 29, 2012

basel III => increased precision assays of risk => increased leverage

what do you expect

the  for profit banksters have one strategic objective at the highest level :

reduce equity to as  thin a green line as possible

do you imagine reforming system regulators will block this
 by  ever more elaborately calculate  risk weighting ?

what is risk .. ..after all

unpredictable ?

"Looking at banks with over $100 billion in assets at the end of 2006,
 risk-based capital ratios
 fail to predict which would fail when the crisis hit"


"; Basel II allowed banks to use internal risk management models for calculating their risk-weighted assets and capital, capital regulation is now performed by models that potentially include millions of parameters that must be estimated.... But these parameters must be estimated using relatively short historical samples—drawn from a historical period that may or may not be representative of the future.... we collide with a  fact of statistics: when you have a limited amount of sample data,
 simple models have greater predictive accuracy than complex models"

 the phenomenology of risk expectations

 discovered or  manufactured ?

a fully socialized credit system removes this game

risk is subsumed by a mandated universal risk premium system

want an outside  assessment ?

the pool assignments could be shadowed by traded speculators paper

default/delinquency  bets  eh ?

Tuesday, September 25, 2012

just like last time and the 14 times b4...election going as planned ?

white working-class Americans

"...non-Hispanic white Americans
without a four-year college degree
who hold non-salaried jobs,
and make up roughly
one-third (36%) of all Americans "

look at japan

"People always ask whether we’ll do as badly as Japan;"

" so far, at least, we’re doing far worse."

"... Japan was highly effective in its use of fiscal stimulus to limit the damage from financial crisis"

so  where did Japan fail ?

" not pursuing expansionary monetary policy during the good years to lift itself out of deflation."


that requires more then mere assertion i think
and a complete answer
 gets to the heart of the  validity of any fiscal first thesis

pk whistles past the arbitoir

this is the usual comp graph

but how about looking at financial crisis contraction/stagnation events ?

"We actually look better than most " ---if you ignore Japan---

 ":US economic performance since the financial crisis comprted with other episodes of major financial crisis. "

that's uncle's economy in red

"protracted weakness is normal after a big financial crisis"

ya but is it necessary

or could we Kalecki  our way on out of this
and  in a Vickrey second

that is the superimposable  question  eh bub


"we should have done even better: if stimulus works, and the evidence says that it does, we should have done more, and made the slump even shorter and shallower"

to really see who got rated here :

Spain 1977 tan
Norway 1987 lite blue
Finland  1991 green
Sweden 1991 purple

Japan 1992 royal blue

hmmmm nordic nite mare 
eternally tormented  Spain

plus japan

and japan kicks our butt

oh ya you can toss in the medicine ball
  haunting our collective memory
the american  great depression.... here teaced with  caspar the ghost like dots


The big enigma