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."

Tuesday, August 28, 2012

The new Australian credit risk puzzle (my AFR column: outside pay-wall)

In my AFR column today, I discuss some significant Australian economic puzzles that I have not seen canvassed before. A teaser is enclosed below. You can read the full column for free here (there was a tiny, subbie-introduced typo in the paper version that has been fixed):

There is a worrying puzzle at the heart of Australia’s financial system that involves the misrepresentation and mispricing of credit risk. It also distorts investment, the development of a deeper fixed-income market, and policy measures to improve the stability of the system.