Comments on: Bill Gross: “Staying Rich in the New Normal” http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html Sat, 21 Nov 2009 08:48:41 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: Edward Harrison http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html/comment-page-1#comment-5706 Edward Harrison Fri, 05 Jun 2009 16:24:33 +0000 http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html#comment-5706 Thomas, the Germans should recognize that globalized finance has compromised their banking system even though they never had a bubble. That would suggest they should be first in line to want some sort of supranational regulator to prevent their banks from taking on foreign country asset risk. It is ironic that a problem in the U.S. has hurt the German banks nearly as much as the American ones. The Landesbanken seem to have been used as 'dumb money.' Thomas, the Germans should recognize that globalized finance has compromised their banking system even though they never had a bubble. That would suggest they should be first in line to want some sort of supranational regulator to prevent their banks from taking on foreign country asset risk. It is ironic that a problem in the U.S. has hurt the German banks nearly as much as the American ones. The Landesbanken seem to have been used as 'dumb money.'

]]> By: Edward Harrison http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html/comment-page-1#comment-5429 Edward Harrison Fri, 05 Jun 2009 15:24:33 +0000 http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html#comment-5429 Thomas, the Germans should recognize that globalized finance has compromised their banking system even though they never had a bubble. That would suggest they should be first in line to want some sort of supranational regulator to prevent their banks from taking on foreign country asset risk. It is ironic that a problem in the U.S. has hurt the German banks nearly as much as the American ones. The Landesbanken seem to have been used as 'dumb money.' Thomas, the Germans should recognize that globalized finance has compromised their banking system even though they never had a bubble. That would suggest they should be first in line to want some sort of supranational regulator to prevent their banks from taking on foreign country asset risk. It is ironic that a problem in the U.S. has hurt the German banks nearly as much as the American ones. The Landesbanken seem to have been used as 'dumb money.'

]]> By: Thomas http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html/comment-page-1#comment-5418 Thomas Thu, 04 Jun 2009 14:55:38 +0000 http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html#comment-5418 Quote from Bill Gross: "At 100% debt to GDP, the interest on the debt might amount to 5% or 6% of annual output alone."<br><br>He's being intellectually dishonest here, because obviously a significant part of the 5-6 % interest would be compensation for inflation. If real interest is "only" 2-3 % or so, then that's the actual interest burden we are talking about - there's no harm in letting government debt accumulate at the rate of inflation. Quote from Bill Gross: “At 100% debt to GDP, the interest on the debt might amount to 5% or 6% of annual output alone.”

He's being intellectually dishonest here, because obviously a significant part of the 5-6 % interest would be compensation for inflation. If real interest is “only” 2-3 % or so, then that's the actual interest burden we are talking about – there's no harm in letting government debt accumulate at the rate of inflation.

]]> By: Thomas http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html/comment-page-1#comment-5417 Thomas Thu, 04 Jun 2009 14:52:34 +0000 http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html#comment-5417 Quote Edward: "The Germans need to get their head out of the sand and realize their export orientation is part of the problem too."<br><br>Yes. But what can Angela Merkel do about it here and now? Quote Edward: “The Germans need to get their head out of the sand and realize their export orientation is part of the problem too.”

Yes. But what can Angela Merkel do about it here and now?

]]> By: Edward Harrison http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html/comment-page-1#comment-5411 Edward Harrison Wed, 03 Jun 2009 14:22:12 +0000 http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html#comment-5411 Stevie, I don't think diminished is harsh at all. You hit the nail on<br>the head when you said the whole of the developed world. You probably<br>saw Merkel's comments suggesting that the ECB is trying to keep the<br>gravy train going. Well, it's a tad late to be talking this way. The<br>Germans need to get their head out of the sand and realize their<br>export orientation is part of the problem too. Stevie, I don't think diminished is harsh at all. You hit the nail on
the head when you said the whole of the developed world. You probably
saw Merkel's comments suggesting that the ECB is trying to keep the
gravy train going. Well, it's a tad late to be talking this way. The
Germans need to get their head out of the sand and realize their
export orientation is part of the problem too.

]]> By: Stevie b. http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html/comment-page-1#comment-5410 Stevie b. Wed, 03 Jun 2009 14:01:32 +0000 http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html#comment-5410 "A diminished future for America is an inevitability of having lived beyond its means for far too long."<br><br>Exactly!! And not just for America, but the whole of the developed world. And just as well, cos were it even remotely possible, the world could not take another co-ordinated global boom at this juncture, so the developed world needs a meaningful pause anyway. And maybe "diminished" is a bit harsh. Most of us will still be a helluva lot better off than most in the developing world, so it wont be a diminished future - just a more realistic one. And after all, happiness is really just having a good sense of perspective. “A diminished future for America is an inevitability of having lived beyond its means for far too long.”

Exactly!! And not just for America, but the whole of the developed world. And just as well, cos were it even remotely possible, the world could not take another co-ordinated global boom at this juncture, so the developed world needs a meaningful pause anyway. And maybe “diminished” is a bit harsh. Most of us will still be a helluva lot better off than most in the developing world, so it wont be a diminished future – just a more realistic one. And after all, happiness is really just having a good sense of perspective.

]]> By: Manshu http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html/comment-page-1#comment-5408 Manshu Wed, 03 Jun 2009 11:27:59 +0000 http://www.creditwritedowns.com/2009/06/bill-gross-staying-rich-in-the-new-normal.html#comment-5408 Japan has long exceeded all sane levels of Debt to GDP ratio so the 100% may not be the point of no return for US as well. Japan has long exceeded all sane levels of Debt to GDP ratio so the 100% may not be the point of no return for US as well.

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