41 Articles 0 Followers
29 May 2023 4 minute read 0 comments fmiren
In light of the recent fears of recession and several bank failures I think it's time to talk about patterns of banking crises. How and why do they occur? Can we predict and avoid them? One of the best books on the history of financial crises is “Thi...
26 May 2023 1 minute read 0 comments fmiren
Consumer Loans: Credit Cards and Other Revolving Plans, All Commercial Banks Delinquency Rate on Credit Card Loans, All Commercial Banks Consumer loans are rising. If we look at the last 1 year, credit card loans are increasing almost in a li...
30 Apr 2023 1 minute read 0 comments fmiren
What is the repo market? And why it's the backbone of the financial system? The repo market is the heart of the financial system. It is the market where cash that financial institutions have and Treasury securities meet. Large financial institutions,...
26 Apr 2023 4 minute read 0 comments fmiren
Monetary policy 101 Debt-deflation dynamics FED’s actions during the GFC FED’s policy response to the 2007–2008 crisis proved to be effective. (Here we don’t discuss the long-term consequences of FED’s policy which can be debated). If Bernanke wa...
19 Apr 2023 2 minute read 0 comments fmiren
Profits cycle Corporate profits tend to grow in line with nominal GDP. However, the relationship between the growth rates of profits and nominal GDP is not the same across all period. During some periods, such as the late 1990s and early 2000s,...
2 Apr 2023 1 minute read 0 comments fmiren
Market risk, volatility, and business cycles We know that exogenous factors, such as major geopolitical events (wars, trade wars, regional conflicts, invasions etc.), can and do create significant volatility. For example, a geopolitical tension, ev...
1 Apr 2023 2 minute read 0 comments fmiren
Business cycles, fixed-income investments and credit-risk cycle The level of credit risk varies over and responds to business cycles maybe not very directly but in a systematic way. Credit risk reaches its peak during recessions when corporate defa...
29 Mar 2023 1 minute read 0 comments fmiren
Dividend yield and 10-year Treasury yield There has been a relationship between bond yields and dividend yields historically. The chart below shows that the dividend yield has been higher than 10-year yield until 1960s when the relationship cha...
26 Mar 2023 1 minute read 0 comments fmiren
Balance Sheet Recession Balance sheet recession is one kind of economic recession that differs from other “ordinary” recessions. It is an environment in which private sector pays down its debt. Since this implies less corporate spending or invest...
20 Mar 2023 2 minute read 2 comments fmiren
Introduction Business cycless and economic indicators Multiple indicators were developed by NBER to better understand and track business cycles. There are three types of indicators. Leading, coincident, and lagging indicators predict, date, and follo...
