Chris Lau - Seeking Alpha

Friday, November 27, 2009

Primer on Balance Sheet Recessions

The value of Fortune runs far deeper than money and financial returns. On kaChing.Com, I was, and continue to be, fortunate to have acquired a large network of influential contacts. This includes hedge fund managers.

Most recently, Bluecut Capital brought to my attention, economist Richard Koo. Bluecut Capital was also interviewed on BTS. The fund management team currently manages assets via the kaChing product offering (total assets under management is collectively $4 million).

Many investors would not spend an extra moment reading on unrealistic economic models that are consistently proven to be more theoretical than practical.

This viewpoint is short-sighted.

Koo implemented various economic models during both the Latin American crisis in the 1980's and the problems of Japan between 1990 - 2005. Koo is currently the Chief Economist, Nomura Research Institute.

The current economic problems, and its current "solutions," have many similarities to that which occurred in Japan. The presentation below will give an idea of what end-game of "de-leveraging" will be like and the consequences for the U.S. if it continues to follow its economic policies.

A Primer (and a slide presentation) was provided here on Zero Hedge:
http://www.zerohedge.com/article/primer-balance-sheet-recessions

Here is an audio presentation from Koo (November 2008):
http://csis.org/multimedia/audio​-great-recessions-lessons-learne​d-japan