Adrian Buck > Recent Status Updates

"Bank funding markets seized up not because of traditional deposit runs, but because wholesale secured funding markets went into a meltdown driven by the very risk management tools that were supposed to make them safe."

""shadow banking" ... replicated the maturity transformation risks of banks but did so outside the regulatory constraints of bank liquidity and capital requirements."

"The Communists wanted something more and different: they demanded that their victims remain alive and celebrate the system that destroys human sensibility and self-esteem in its victims."

"Perhaps never, in any danger zone, was the Hungarian intelligentsia so deliberately cohesive as in these months, in the early stages of the communist takeover."

"Given the purposes for which bank credit is actually used in advanced economies, ultra-low interest rates are likely to stimulate speculation in existing assets than they stimulate new business investment."

"Indeed, even where individual countries have achieved deleveraging, their ability to do so has been crucially dependent on growing leverage in other countries. Germany..."

As people become richer they "devote an increasingly share of their income to competing for the ability to live in the most desired parts of town." i.e. property prices rise.

"If credit finances consumption rather than useful investment, it is more likely that the debts created will subsequently prove unsustainable."

"[The pattern on return on debt] tends to induce myopia...investors...exclude...the possibility of a loss."

The Inca empire?

"Fortunate are the peoples who can realise social development without revolution. Fortunate are the Scandinavians, the Dutch..." - ?

"We should pragmatically consider public policy interventions to address issues of value for money."

"...but the far bigger problem is that advanced economy GDP levels are now some 10-15% below where they would have been on prescribes trends." - but as trends were themselves the product of prescribes lending, you can't have your cake and eat it. Without 'excessive' lending, the growth trend may be much lower.

"Success therefore depended on "anticipating what average opinion expects the average to be". But such a focus can be entirely rational.

"The market for restaurants works sufficiently well that there are few debates about whether restaurants are socially useful or restaurateurs overpaid."

"America is creating....a new civilisation which is no longer a copy of European culture." - I wonder what Marai later made of this thought.

"...the Soviet Union could keep its armed forces in Hungary only until the peace pact was signed with Austria." - I didn't know this.

"The Second World War ... seemed not to have touched the conscience of the West."

"...the biggest mistake of Eastern socialism occurs when it declares a military crusade against the independent middleman of business from society, and wants to replace him with state employees who are bureaucrats, lazy, often corrupt and always laggardly and incompetent because they cannot foster demands in the consuming masses, and without demand social development cannot take place: "

"...the dominant theoretical model of modern monetary economics "lacks an account of financial intermediation, so money, credit and banking play no meaningful role.""

"Increased complexity made the financial system inherently less stable, and it facilitated excessive credit extension and leverage in the real economy."

"...and to get out of the debt overhang, we need to break the taboo against the money finance of fiscal deficits, while ensuring that the option is not used to excess."

"Irving Fisher and Henry Simons...believed that the processes of credit and money creation is too distinct and so social in nature, that free market principles should not apply to them."

"At the core of financial instability in modern economies, this book argues, lies the interaction between the infinite capacity of banks to create new credit, and the scarce supply of irreproduciable urban land."

"...law can exist only where law provides protection, not just attack."

"There have always been individuals who believed they were chosen to create God,"

"Those who returned from He'll behaved more moderately ...than 'these' who ... escaped more cheaply."

"you have nothing to worry about. You are a bourgeois...But I was a Communist, and I did nothing for twenty-five years...Now the day of reckoning has arrived."

"Experience has taught that all pedagogy is hopeless" - I'd put this down to Hungarian pessimism, but Hungary is an amazingly schooled society.

"I have a theory that while a man might not always get the wife he wants or needs, he always gets the wife he deserves.' - I believe the same thing about people and governments.