Paul McCulley articles at IntCom

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Paul McCulley

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Links to articles by McCulley?


Pimco's McCulley to Leave Investing for Think Tank
Bloomberg Dec 3, 2010

RE: Bad, bad, bad.

Pimco rehires McCulley, this time as chief economist and public face
Reuters 27 May 2014

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The Global Interdependence Center


Pozsar has left the NY Fed and teamed up with Paul McCulley, the former investment luminary of Pimco
(and the man who coined that phrase “shadow banking”) to tackle another issue.
But this time, it is not securitisation they want to “map” – but “helicopter money”, or quantitative easing.
Gillian Tett, Financial Times 10 January 2013

Four years ago, Zoltan Pozsar helped change how policy makers visualise the financial world when he worked with colleagues at the New York Federal Reserve to create a gigantic wall map of shadow banking. Astonishingly, it was the first time anyone had laid out these financial flows in detailed, graphic form. And by doing that, the NY Fed researchers showed why the sector mattered – and why policy makers needed to rethink how the financial ecosystem did (or did not) work.

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Helicopter Ben

Let the helicopters start to drop money. Go, go, go.
Rolf Englund 16 September 2012

Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
Men väljarna och därmed deras medlöpande politiker är rädda för budgetunderskott och vill hellre att villaägarna skall låna än att staten skall göra det.
Rolf Englund 5 december 2009


There are clear-cut things that you do if you are in a liquidity trap.
A liquidity trap is simply defined as when the private sector is in a deleveraging mode, or a de-risking mode,
or an increasing savings mode — all of which you can also call deleveraging phenomena —
because of enduring negative animal spirits caused by legacy issues associated with bubbles.
Paul McCulley, at John Mauldin, 3 October 2011
Highly Recommended


When, however, the economy suffers from Post Bubble Disorder,
characterised by private sector deleveraging and a fat-tail risk of deflation
In such a liquidity trap, private sector demand for credit is, axiomatically, very inelastic to low interest rates,
as evidenced by contracting private sector debt footings, even when the central bank’s policy rate is pinned against zero.
In such circumstances, the central bank has a profound duty to act unconventionally
Paul McCulley August 2010

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The Taylor Rule
Professor Taylor made one huge, simplifying assumption, that the neutral real Fed funds rate is a constant 2%.
Paul McCulley April 2010

A year later, the evidence is in: Depression 2.0 has indeed been avoided.
No, I haven’t yet bought that second home. In fact, I actually sold my only one, at a good level, as I was no longer using it, preferring to live in a little rental house on the water where I have my 32-foot fishing boat, named the Moral Hazard, and my 18-foot electric Duffy boat, named the Minsky Moment. Yes, I am sorta non-normal.
Paul McCulley April 2010

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The biggest intermediate-term risk for risk assets is not that the big-V doesn’t unfold, but that it does, inciting the Fed to bring the extended period of a near-zero policy rate to a close.
But again, you retort, doesn’t that imply that in the absence of the big-V, risk asset prices could levitate into bubble valuation space?
Yes, it does mean that.
Paul McCulley November 2009

The Efficient Market Hypothesis in Retreat

Such was the case with the Forward Minsky Journey that unfolded alongside the Great Moderation for twenty-five years after the recession that ended in 1982. Ever-increasing private sector leverage was applied on the presumption that the Great Moderation was a perpetual motion machine, rather than an epoch that would eventually implode on its own debt-deflationary pathologies, as Minsky envisaged.

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Minsky


Most rational investors accept the dual proposition that
a Fed funds rate pinned against zero and near-$800 billion of excess reserves sloshing around the banking system are not enduringly sustainable.
This is the case despite the fact that most – though a smaller most – applaud the Fed for engineering these outcomes, so as to cut off the fat tail risk of deflationary Armageddon.
Paul McCulley, June 2009


The Shadow Banking System and Hyman Minsky’s Economic Journey
Paul McCulley, May 2009


The Paradox of Deleveraging
Paul McCulley, July 2008


The essential fact right now is that
the American economy needs an inflation rate above the Fed’s comfort zone
Paul McCulley, June 2008


Policy makers have slowly recognised the Minsky Moment
followed by the unfolding Reverse Minsky Journey.
But I want to emphasise “slowly,”
Paul McCulley, April 2008


Tell me once again just who this Minsky fellow is and why it’s his moment
Paul McCulley, January 2008


Perils of Plenty:
Can Foreign Reserves Grow Forever?
Paul McCulley and Ramin Toloui November 2007


If it is not too much of an intellectual stretch to say that China is part of the monetary union that is called the United States
— the 51st state, if you will —

then it is not too much of a stretch to say that what can go wrong is that China decides—or is forced—to secede.
Paul McCulley, June 2007


So why hasn’t the unemployment rate already risen?
The short answer to the puzzle is that the labor force participation rate has fallen, accounting fully for the drop from 4.7% to 4.5% for the unemployment rate over the last year.
Paul McCulley, May 2007


Sub-prime mortgages will affect the entire housing market
rather than just a small sector of it.
Paul McCulley at Johan Mauldin 12/3 2007


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