Over at Equitable Growth: I want to say that people like Global Head of Credit Products Strategy at Citigroup Matt King are simply not thinking clearly. The macroeconomic regularities that seem obvious to me simply are not there to him. What he ought to be saying is:
- Mammoth safe asset shortage--in large part because since 2007 nobody trusts any of his peers' issuing departments to create a AAA asset.
- Hence destructively low yields.
- Hence those that can need to bend every policy nerve toward creating large amounts of safe assets--which means borrow-and-spend on the part of governments: expansionary fiscal policy.
But that is rarely what he or his peers are saying. Thus I hesitate. Could they possibly be misreading the situation in such an obvious way? What are they seeing and thinking about that I am missing?
Thus I never know what to do with pieces like this: Read MOAR Over at Equitable Growth:
Alexandra Scaggs: There’s No Yield, and Citi Isn’t Going to Take It Anymore:
Citi’s Matt King has some harsh words for central bankers...