There are many gems in the annual report of the Bank of International Settlements that came out on Sunday. One of the most intriguing is a trail which leads to an actual estimate of the cost to society of scientists becoming hedge fund managers.
The trail starts at a section about debt sustainability across a number of countries. It notes that elevated levels of debt got us into this crisis and the situation still hasn’t improved for many countries. In fact, for some countries, the debt burden of the private sector has gotten even worse. Check out the last row of these charts on debt service ratios (looking at the red lines): Read more
Let us count them… or at least, begin to.
The People’s Bank of China in February acknowledged that official credit financing figures weren’t adequately capturing non-bank lending, so they began to publish broader figures under the moniker “total social financing” (aka “society-wide financing”). Under this measure, Chinese financing levels for 2011 would be about Rmb14,000bn – similar to the previous two, stimulus-infused, years – despite the various efforts at credit tightening this year. Read more
If this week’s mooted 25bps hike in ECB interest rates is the beginning of a trend, there’s already plenty of evidence it will damage private debt sustainability in the periphery.
More on all that public debt, this time. Read more
Belgium has six months. The rest of the eurozone core has a problem.
Standard & Poor’s didn’t shift the Belgian sovereign’s AA+ rating from a stable to a negative outlook on Tuesday for the usual reasons you might expect with, say, Spain or Ireland. There, contingent banking liabilities loom large, for instance. Read more