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Follow the Money

Brad Setser tracks cross-border flows, with a bit of macroeconomics thrown in.

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Farewell

I am stepping down from my position at the Council of Foreign Relations to take a new job. That, among other things, means that I will not be blogging here for the foreseeable future. Read More

Economics
Revisiting the Ides of March, Part III: Scary Stories to Tell in the Dark
This is a guest blog by Josh Younger, an interest rate strategist at J.P. Morgan. Joshua Younger is employed by the Research Department of J.P. Morgan Chase & Co. All views expressed in this forum ar…
Economics
Revisiting the Ides of March, Part II: The Going Gets Weird
This is a guest blog by Josh Younger, an interest rate strategist at J.P. Morgan. Joshua Younger is employed by the Research Department of J.P. Morgan Chase & Co. All views expressed in this forum ar…
Economics
Revisiting the Ides of March, Part I: A Thousand Year Flood
This is a guest blog by Josh Younger, an interest rate strategist at J.P. Morgan. Joshua Younger is employed by the Research Department of J.P. Morgan Chase & Co. All views expressed in this forum ar…
  • Japan
    A Puzzle in Japan’s Balance of Payments: What Explains Strong Foreign Demand for JGBs?
    Japanese investors have an obvious incentive to search for yield abroad. But why has foreign demand for Japanese bonds almost matched Japanese demand for foreign bonds?
  • Taiwan
    Shadow FX Intervention in Taiwan: Solving a 100+ billion dollar enigma (Part 3)
    This is the third post in a series* on Taiwan's life insurers and their private & sovereign FX hedging counterparties. It’s the product of a collaboration with S.T.W**, a market participant and frien…
  • Taiwan
    Shadow FX Intervention in Taiwan: Solving a 100+ billion dollar enigma (Part 2)
    Large-scale purchases of foreign bonds have become the central flow sustaining Taiwan’s massive current account surplus and keeping the Taiwan dollar weak. The size of this flow raises the question of who supplies Taiwan’s lifers with FX hedges.
  • Taiwan
    Shadow FX Intervention in Taiwan: Solving a 100+ Billion Dollar Enigma (Part 1)
    Taiwan’s central bank, unlike most central banks, doesn’t disclose its position in FX derivatives. It really should. There is good reason to think its undisclosed exposure is quite substantial.    
  • Puerto Rico
    Is Puerto Rico Back on a Path Toward Debt Sustainability?
    The plan of adjustment put forward by the oversight board, if approved by enough creditors and the courts, would cut Puerto Rico’s tax supported debt from $50 billion to $25 billion and smooth its repayment profile. Is that enough?
  • Trade
    Why Global Trade Imbalances Could Get Worse Before They Get Better…
    Transatlantic imbalances reflect Europe's demand deficit, which should be easy to solve (but isn't). Transpacific imbalances haven't disappeared. And are likely harder to solve, as they stem from an underlying savings surplus.
  • International Economic Policy
    Are Asian Insurers the New European Banks?
    It is hard to understand the global flow of funds without understanding the risks now being taken by Japanese, Taiwanese, and Korean life insurers.