The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, September 10, 2010

Very cool chart on linkages in international financial system

This is a very cool diagram from the BIS on the pre-GFC and post-GFC financial flows to and from the US.

And this is what the BIS tells us it shows:

"First, capital flows saw a phenomenal reversal in the wake of the recent crisis (lower panels), in particular out of the United States. Up to mid-2007, banks facilitated international capital flows out of Japan and the euro area as well as from Asian financial centres and oil-exporting countries. Banks routed these funds via offices in the United Kingdom and in Caribbean financial centres, ultimately transferring them to borrowers in the United States and in emerging markets. After the start of the crisis, the direction of many of the bilateral flows reversed, in part generated by capital movements back to the United Kingdom, and in part reflecting asset writedowns.

Second, and more important, cross-border banking is very concentrated in a few locations (top panels). That is, a large chunk of the world’s cross-border banking business is booked (or has a counterparty) in the United Kingdom and a few other key banking centres."