Behind the Balance Sheet #29 The Plumber
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Dec 14, 2023 
James Aitken, an expert in the plumbing of the financial system, takes us on a world tour of hotspots in global finance. Topics include why he is relaxed about the US, Japan's program for greatness and its possible effects on global bond markets, and the challenges faced by China's property sector.
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Aitken's Career Path
- James Aitken's career unexpectedly evolved into "financial plumbing" while at AIG and UBS during the 2008 financial crisis.
- This experience provided unique insights into the intricacies of the financial system and led to his current consultancy.
Income-Driven Cycle
- The current economic cycle is primarily income-driven, not credit-driven, due to COVID-era fiscal transfers.
- This has resulted in stronger household and corporate balance sheets, mitigating the impact of rising interest rates.
Nominal GDP and Treasury Yields
- A 10-year Treasury yield converging with nominal GDP is sensible.
- Focus on nominal GDP as an indicator of aggregate demand, especially in inflationary environments.