Comments on: Hindsight on banking crises http://www.irisheconomy.ie/index.php/2009/04/05/hindsight-on-banking-crises/ Wed, 16 May 2012 23:05:39 +0000 http://wordpress.org/?v=2.6.3 By: Patrick Honohan http://www.irisheconomy.ie/index.php/2009/04/05/hindsight-on-banking-crises/#comment-3958 Patrick Honohan Mon, 06 Apr 2009 20:32:21 +0000 http://www.irisheconomy.ie/?p=1455#comment-3958 Aedin: The US is at 6, 126, so well away from the danger zone. This is not, I think, not related to being an SOE or not. Instead, it's because this particular indicator system was designed for boom-and-bust type crises, whereas the US failure was an example of one of the other two canonical syndromes, namely crises attributable to correlated micro/management failures. (The third syndrome related to government induced failures). I did have other proposals for early warning of the other types, but not so easy to operationalize. Aedin: The US is at 6, 126, so well away from the danger zone.

This is not, I think, not related to being an SOE or not. Instead, it’s because this particular indicator system was designed for boom-and-bust type crises, whereas the US failure was an example of one of the other two canonical syndromes, namely crises attributable to correlated micro/management failures. (The third syndrome related to government induced failures).

I did have other proposals for early warning of the other types, but not so easy to operationalize.

]]> By: Aedin Doris http://www.irisheconomy.ie/index.php/2009/04/05/hindsight-on-banking-crises/#comment-3907 Aedin Doris Mon, 06 Apr 2009 08:57:38 +0000 http://www.irisheconomy.ie/?p=1455#comment-3907 Where would the US lie? Or is this only valid for SOEs? Where would the US lie? Or is this only valid for SOEs?

]]> By: Pat Donnelly http://www.irisheconomy.ie/index.php/2009/04/05/hindsight-on-banking-crises/#comment-3905 Pat Donnelly Mon, 06 Apr 2009 08:51:11 +0000 http://www.irisheconomy.ie/?p=1455#comment-3905 Given that you are obviously modest, you are to be forgiven for not alerting the rest of us. We knew from the likes of Faber and Roubini anyway, but since we were not in a position to make any difference, we just watched to see if what we understood from the Austrians would come to pass. It did. And the resolution of all that mal investment has only just started. But you probably knew that? The problem is not in knowing what is going to happen. Many participants who could have stopped it knew also. But they could still make more money from working as hard as ever to milk the system. And some even knew to hedge against the risks. So where did they put their money? In a deflationary world where do you put your wealth? I know and so do others. It isn't in stocks. And that is why all these stimuli will fail, except to pay off some folks! Eliot Spitzer fixed some responsibility on GWB. And then he was outed. Whatever you say on the economy will be ignored as we already know, but welcome to the club. Those in charge are not pleasant people. Given that you are obviously modest, you are to be forgiven for not alerting the rest of us. We knew from the likes of Faber and Roubini anyway, but since we were not in a position to make any difference, we just watched to see if what we understood from the Austrians would come to pass. It did. And the resolution of all that mal investment has only just started.
But you probably knew that? The problem is not in knowing what is going to happen. Many participants who could have stopped it knew also. But they could still make more money from working as hard as ever to milk the system. And some even knew to hedge against the risks. So where did they put their money? In a deflationary world where do you put your wealth? I know and so do others. It isn’t in stocks. And that is why all these stimuli will fail, except to pay off some folks!
Eliot Spitzer fixed some responsibility on GWB. And then he was outed. Whatever you say on the economy will be ignored as we already know, but welcome to the club. Those in charge are not pleasant people.

]]> By: George http://www.irisheconomy.ie/index.php/2009/04/05/hindsight-on-banking-crises/#comment-3903 George Mon, 06 Apr 2009 08:47:45 +0000 http://www.irisheconomy.ie/?p=1455#comment-3903 A plot of the trend for Ireland and the mean trend would be interesting. A plot of the trend for Ireland and the mean trend would be interesting.

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