tag:blogger.com,1999:blog-5908830827135060852.post6467355352678858507..comments2024-03-29T02:54:56.523-04:00Comments on Bond Economics: Book Review: When The Bubble BurstsBrian Romanchukhttp://www.blogger.com/profile/02699198289421951151noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-5908830827135060852.post-87359094874117763032020-09-04T05:06:46.413-04:002020-09-04T05:06:46.413-04:00This comment has been removed by a blog administrator.Kathyhttps://www.blogger.com/profile/17651113437051600125noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-66463268545059559562018-12-08T15:47:12.114-05:002018-12-08T15:47:12.114-05:00This comment has been removed by a blog administrator.Evelynhttps://www.blogger.com/profile/05411038282880302089noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-14320479800347038032017-05-07T20:30:30.856-04:002017-05-07T20:30:30.856-04:00It was a very interesting place to work; I started...It was a very interesting place to work; I started there in 1998. Fairly unique views at the time, which was true for most of its history.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-91960091917535001702017-05-07T19:48:04.172-04:002017-05-07T19:48:04.172-04:00"Hyman Minsky was not too well known in Canad..."Hyman Minsky was not too well known in Canada, other than at BCA Research, where I used to work."<br /><br />So you worked at Bank Credit Analyst?<br /><br />I would spend hours reading the latest BCA report to extract its wisdom, when I was cutting my teeth as an investment analyst in the late 1970s. It was a pretty much unique way of assessing the markets in the day.<br /><br />HenryAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-81553310228881644292017-05-07T11:06:06.006-04:002017-05-07T11:06:06.006-04:00It takes money to buy into a bubble. Hence, if we ...It takes money to buy into a bubble. Hence, if we add all the money on deposit at banks, if a bubble is in progress, the total of all bank deposits should grow from year-to-year. Hmmm. We see that that money growth has gone on for MANY years!<br /><br />Where is this new money coming from? My suggestion is that it comes from "tradeable loans". These are loans that are backed by institutions that have enough strength to make loan guarantees creditable. Such a guarantee allows to the loan to be traded with very little discount compared to the discount extracted when the loan is personally guaranteed by an individual.<br /><br />Couple "tradeable loans" with bank borrowing and you have a source of "new money".<br /><br />Who is a creditable loan backer that can be stable over many years? Stable central governments can fulfill that role. In my view, we can trace housing bubbles in both Canada and the US to mortgage backing by the federal governments. Take away federal government mortgage backing and you are left with private mortgage backing in some form. Private backing can be expected to be far less stable over the range of several years.<br /><br />So when does a central government driven bubble burst? When the population decides that the whole system no longer makes sense? That seems to have happened in the US in 2007-8. It has not yet happened in Canada so far as I can see.<br /><br />Your review of "when the Bubble Bursts" provides tantalizing incentive to read the book for myself. Thanks for the review.Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.com