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Should the EU bail-out Cyprus?
Cyprus Ministry of Finance. Source: Wikimedia CommonsFrom what I have seen, I was the first blogger to bring attention (on July 28th!) on the worsening situation in Cyprus and the imminent bailout....
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The Consequences of Exits
The case of Cyprus undoubtedly resembles the case of Greece. The amount the country needs is not large per se, as was the case with Greece, yet it is the equivalent of about 100% of its GDP, casting...
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Do we feel Europeans?
Over the last few months, after watching most of the recent developments (either positive or negative) in the EU, what made the greatest impression on me is our ability to shift our minds and opinions...
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Banks, Audits and Ratings
Most of the readers who are watching the current developments in economics and banking have surely seen the case of Deutsche Bank and Banca Monte dei Paschi di Siena SpA. For those who did not what the...
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Lack of Leaders or Why I Understand Abstention
As a fellow blogger noted, in 2013 elections are approaching in Cyprus, Italy, Malta, Bulgaria, Germany and Austria (in that order). Although their outcome is highly controversial, their importance...
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The debate on Cyprus revisited
It seems like the media like uncertainty. They prefer it over times when credibility and logic define the world. The reason is obvious. In an uncertain world, the people want to receive as much...
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Mea Culpa but let's repeat it: IMF and the Bail-outs
Olivier Blanchard, IMF's Chief EconomistIt appears that the IMF's spokesperson, Mr Jerry Rice, has said the following over an interview yesterday, concerning Washington Post's article on what appears...
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Capitalistic Communism: The time where all financial institutions belong to...
The Soviet Union Saving Bank bookWhen the late 2007 crisis was at its initial states, very few voices of worry were heard in world. "Just another slump of the economy" most people thought. "We have...
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The misunderstood effects of a default: A Guide to Politicians and Policymakers
Although I had thought that the issue with Cyprus was very similar to the one with Greece, Portugal and Ireland it appears that it isn't so in the eyes of some. From what I can see on some websites, it...
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Efficient Market Hypothesis vs Modern Portfolio Theory
The Markowitz Efficient FrontierNote: Unlike my previous articles this is "supposedly" a bit more technical, although no mathematics will be employed in its process.What is the current state of the...
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Austerity and Wages: The Real Data
From what we can see very few have actually bothered to see the effects of austerity measures in the lives of people. Thus, after some (very light) data mining I present you the effects that these...
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GDP is falling down...
Eurostat published its latest statistics on Q4 2012 in the Eurozone. Nothing that we did not expect actually: Portugal -1.8%, Cyprus -1.0%, Italy -0.9%, Spain -0.7%. No statistics were published...
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Fiscal Multipliers Explained (and Proved)
The Panic of 1837, blaming the Treasury Policies of Andrew JacksonThe IMF spokesperson, Mr Jeffrey Rice, said the following in a Press Briefing in Washington about 10 days ago:(...) there's been a lot...
View ArticleRational Rationality vs Irrational Rationality
Having just read this made me realize what people are actually thinking about when they are making their assumptions on economic modelling:"(..)economists have conventionally assumed rational...
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Let Cyprus fail? Why?
Although I thought I would never have to write anything more of the subject it appears that some people just don't get it. The usual comments on the subject include "why save Russian oligarchs?" or...
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Regional vs Local Stability in Investment
Note: This post is a continuation of the ideas presented in Horatiu Ferchiu's "Investment as localized panacea or growth opportunity?" article.We learn from basic economic theory, often taught in...
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When do Bubbles Burst? Or how do we know that we have hit the ceiling?
There has been a wide talk about the determinants of the financial crisis as well as our ability to forecast it. Many neoclassical economists argue that we could not have predicted anything; yet some...
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Why a Deposits Haircut is a Terrible Idea
One of the newest ideas that the great masterminds of the European bail-outs have come up with is the one where a deposit haircut takes place, in order for the Cypriot state to assume less debt in the...
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Why Austerity Doesn't Work as Expected
Proponents of austerity appear to have the impression that the whole supply and demand issue (as discussed here) holds and prices adjust automatically to any fall in demand. Truth is, this does not...
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On Breaking up "Too Big to Fail" Banks
Deutsche Bank in FrankfurtIn 2008, Her Majesty's Government under Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling, opted to bail-out one of the UK's financial giants, the...
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