The eaves are dripping.

Then, these corbeles going down underneath the eaves are that little design that comes off the can.

The barley hops design worked up into the eaves, then the dentil work comes directly off the can's red, white, blue and silver.

There's an overhang of capital in the U.S., and the key is yield pickup.

However, while the HIPC initiative has removed the debt overhang for many countries, the burden of debt service payments remains high (see table 1).

The amount of debt relief would then be determined on the basis of expected development assistance and the need to avoid a new debt overhang.

Third, the secular decline in their commodity prices had resulted in a debt overhang that siphoned off scarce resources that could otherwise have been used to fight poverty.

More broadly, the ECB s marginal lending facility is an indirect means of monetizing sovereign debt. It is an even less direct way to address the private, related debt overhang.

NEW YORK A paradox has emerged in the financial markets of the advanced economies since the 2008 global financial crisis. Unconventional monetary policies have created a massive overhang of liquidity.

Attempting to cure an overhang of private debt by issuing mountains of safe government debt is too dangerous. After all, when the private debt was issued, it, too, was considered safe.

But then the US Federal Reserve hid these weaknesses by engineering a housing bubble that led to a consumption boom. It will take years to overcome the excessive indebtedness and real estate overhang that resulted.

In Europe, the recession has lasted six years and counting in Chile, it lasted ten months. Tough regulation and record low interest rates left companies and households with no debt overhang and little need to deleverage.

Had Greece quickly written down its debt burden by two thirds, it would have been able to shed its crushing debt overhang. It could have used a portion of the interest savings to recapitalize the banks.

Close integration with the world economy through rapid liberalization of trade, finance and investment was seen as the way to remove structural and institutional impediments to growth, reduce the debt overhang and end periodic balance of payments crises.

This implies that further progress in trade liberalization will be slow. But slow progress is a far less important challenge to growth prospects than the debt overhang in developed economies, or infrastructure and educational deficiencies in many developing economies.

I can testify from personal experience that investors would flock to Greece once the debt overhang was removed. But the official sector cannot write down its debt, because that would violate a number of taboos, particularly for the ECB.

Moreover, even when public rescue costs are inevitable, they are typically small change compared to the economic harm wrought by the financial crisis and post crisis recession. By contrast, a large debt overhang may be intractable unless policy orthodoxies are challenged.

16. Encourages the international creditor community to consider appropriate measures for countries with a very high level of debt overhang, including, in particular, the poorest African countries, in order to make an appropriate and consistent contribution to the common objective of debt sustainability

Economic growth can indeed continue to be severely depressed by a debt overhang even when credit supply is unrestricted and cheap. Many Japanese companies were left overleveraged by the boom and bust in credit and real estate in the 1980s and early 1990s.

As everyone at the IMF knows, a debt overhang is a vast unfunded tax liability that says to investors enter at your own risk. At any time, your investments, profits, and hard work may be taxed away to feed the dead hand of past lenders.

Despite their strong fundamentals, emerging countries still feel vulnerable in the face of the West s economic weakness, policy shortfalls, and political paralysis. Moreover, they know from experience that there are no easy and immediate solutions to the West s debt overhang and structural impediments to growth.

So, the prescription goes, why not generate higher inflation for a while? This will surprise fixed income investors who agreed in the past to lend long term at low rates, bring down the real value of debt, and eliminate debt overhang, thereby re starting growth.

Japan s deflation and economic stagnation over the last two decades stemmed largely from a dysfunctional financial system and a lack of private demand. The collapse of asset bubbles in the 1990 s left Japan s financial system and private sector saddled with a huge debt overhang.

If politics is the problem in Europe and America, only political changes are likely to restore them to growth. Or else they can wait until the overhang of excess capacity diminishes, capital goods become obsolete, and the economy s internal restorative forces work their gradual magic.

This would include, at a minimum, reforms of labor rules, pension systems, and anti growth provisions of tax codes. It would also include an aggressive attempt to reduce the sovereign debt overhang that remains a major impediment to growth and continues to threaten some European banks.

The clearest sign that the boom is ending is the IMF s forecast of 1.5 growth for the US in 2008. That may not sound like a recession, but the Fund s marginally positive projection primarily reflects the growth overhang from 2007, with hardly any new contribution in 2008.

While the government has assembled considerable firepower to limit the unwinding of a spectacular bubble, the overhang of highly leveraged speculative demand is disconcerting. Indeed, in the 12 months ending in June, margin financing of stock purchases nearly tripled as a share of tradable domestic equity market capitalization.

By contrast, in France and Italy, where house prices have increased almost as much as in the US, there is no evidence of a housing overhang. The negative impact of a downturn in housing prices in these two countries should thus be limited to a drop in consumption.

Although there are many explanations for the eurozone s lagging recovery, it is clear that the overhang of both public and private debt looms large. The gross debts of households and financial institutions are higher today as a share of national income than they were before the financial crisis.

By contrast, in France and Italy, where house prices have increased almost as much as in the US, there is no evidence of a housing overhang. The negative impact of a downturn in housing prices in these two countries should thus be limited to a drop in consumption.

Such automatic borrower initiated filings, if made legal by Congress, could reduce the household debt overhang without the need for government subsidies. To the extent that the alternative is costly foreclosure proceedings that make borrowers and lenders worse off, this proposal should attract the support of both sides.

Japan s woes are rooted in real estate and equity bubbles, which were fueled by monetary expansion aimed at stimulating domestic demand after the 1985 Plaza Accord drove up the yen s value and hurt Japan s exports. In the early 1990s, the bubbles burst, leaving the private sector with a huge debt overhang.

In the international debt crisis that began in 1982, IMF country adjustment programs went hand in hand with bailing in creditor banks through voluntary coordinated loan rollovers. Eventually, it was recognized that a debt overhang was inhibiting investment and growth in Latin America, to the detriment of debtors and creditors alike.

The stimulus package appears big more than 2 of GDP per year but one third of it goes to tax cuts. And, with Americans facing a debt overhang, rapidly increasing unemployment (and the worst unemployment compensation system among major industrial countries), and falling asset prices, they are likely to save much of the tax cut.

Mind you, two years previously, at the outset of the financial crisis, I suggested raising inflation to 4 or more for a period of a few years to deflate the debt overhang and accelerate wage adjustment. But there is a world of difference between temporarily raising inflation to address a crisis and unhinging long term expectations.

Most glaringly, the question of how to allocate the costs of some member countries unsustainable debt overhang has not been adequately addressed. It is easy to conclude that no one is in charge not the national governments, and certainly not the ineffective European Commission in Brussels, with which the large member countries seem to be practically at war.

Weak labor markets, low inflation, and debt overhang suggest that a fundamental re ordering of priorities is in order. In Japan, Shinzo Abe, the incoming prime minister, is signaling the same set of concerns, although he seems to be proposing a minimum inflation target for the Bank of Japan, rather than a link to growth or employment.

The analysis showed that, notwithstanding progress in the implementation of the enhanced Heavily Indebted Poor Countries Initiative, indebted African countries would not find themselves in a sustainable debt situation, and it recommended a debt write off for the poorest countries or the application of alternative debt sustainability criteria which would ensure a permanent exit solution to their debt overhang.

The focus, instead, should be on accelerating the process of balance sheet repair, while at the same time returning monetary and fiscal policy levers to more normal settings. Forgiveness of underwater mortgages (where the outstanding loan exceeds the home s current market value), as well as reducing the foreclosure overhang of some 1.5 million homes, must be part of that solution.

If Gordon is right about slow productivity growth, the debt overhang inherited from the crisis and public finance woes will persist for much longer than anticipated. If, in addition, Summers is right that demand is bound to remain deficient, the combination of financial troubles and persistent mass unemployment is likely to push governments toward radical solutions debt default, inflation, or financial protectionism.

There is thus a subtle but important difference between my debt driven demand view and the neo Keynesian explanation that deleveraging (saving by chastened borrowers) or debt overhang (the inability of debt laden borrowers to spend) is responsible for slow post crisis growth. Both views accept that the central source of weak aggregate demand is the disappearance of demand from former borrowers.

With global trade collapsing and Chinese export demand having plummeted from 26 annual growth in mid 2008 to a 27 contraction by early 2009, the government moved aggressively to inject CN 4 trillion ( 586 billion) into the economy. Though this enabled growth to recover by the end of 2009, it also contributed to new problems, including excessive debt, a property market overhang, and mounting local government financial risk.

In fact, near zero interest rates undermine the very notion of a debt overhang in countries like Greece, Ireland, Portugal, and Spain. While these countries did accumulate a huge volume of debt during the credit boom that went bust in 2008, the cost of debt service is now too low to have the impact reducing incomes, preventing a return to growth, and generating uncertainty among investors that one would normally expect.

Reiterates its conviction that for the heavily indebted poor countries to achieve debt sustainability, long term growth and poverty reduction goals, the debt relief under the Initiative will not be sufficient and that additional resource transfers in the form of grants and concessional loans, as well as removal of trade barriers and better prices for their exports, would be required to ensure sustainability and permanent exit from debt overhang

Also, if exit occurs by selling the long term assets purchased during QE, a sharp increase in interest rates might choke off recovery, resulting in large financial losses for holders of long term bonds. And, if the exit occurs via a rise in the interest rate on excess reserves (to sterilize the effect of a base money overhang on credit growth), the ensuing losses for central banks balance sheets could be significant.