Readers responded with great enthusiasm the last time I hoisted a big chunk of material from Australian economist Steve Keen’s blog (see “Bernanke an Expert on the Great Depression?” )I was therefore quite gratified when he wrote asking me to cross post his latest piece. Keen is a fiercely independent thinker, and has other qualities […]
Read more...The financial services industry is full cry in its demands for taxpayers to save its hide. From Bloomberg: Bill Gross, co-chief investment officer of Pacific Investment Management Co., said the U.S. may slump into a “mini depression” unless policy makers spend trillions of dollars to spur growth. “This economy needs support from the government, a […]
Read more...Your humble blogger, and the vast majority of readers have been pretty skeptical of the notion that the Fed could absorb $29 billion of risk on $30 billion of dodgy Bear Stearns assets and come out whole (JP Morgan takes the loss on the first billion and change). Despite reports from the Fed showing no […]
Read more...When the Federal Reserve went “all in” as wags liked to put it on December 17, with its declaration that it would use “all available tools” to fight looming deflation. The bond and currency markets both took note, with the dollar falling sharply before rebounding and mortgage interest rates falling (nicely done, to get much […]
Read more...Perhaps I am unduly cynical, but I find it pretty odd that the general counsel at the New York Fed. Thomas Baxter, is making statements about the Lehman collapse now. For those who are familiar with US jurisprudence, anything said to an attorney in confidence is privileged information (yes, there have been some attacks on […]
Read more...One of the reasons I am partial to Australians is that they are critical thinkers, not easily cowed by authority or conventional wisdom. In the US, one of the reasons that Fed chair Ben Bernanke is given so much deference (aside from the fact that we treat people in positions of power with kid gloves) […]
Read more...The effort to get the second half of the TARP approved (or more accurately, not force Obushma to nix a Congressional turndown) is all feeling a bit Groundhog Day-ish, without the backdrop of a Lehman collapse and AIG implosion to add a sense of urgency and high drama. The officialdom is again using its access […]
Read more...The New York Times Sunday Magazine has a long piece by Joe Nocera on value at risk models, which tries to assess how much they can be held accountable for risk management failures on Wall Street. The piece so badly misses the basics about VaR that it is hard to take it seriously, although many […]
Read more...Dwight Cass at BreakingViews makes some astute and troubling observations about the GMAC rescue, which spurred a market rally in the face of truly awful economic releases (one might take the cynical view that, given how thin trading is this week and the tape-painted appearance of the end-of-day recovery in stocks yesterday, that a rally […]
Read more...Since I am endeavoring to spend some time with my family, forgive me for dispatching this New York Times story, “Dollar Shift: Chinese Pockets Filled as Americans’ Emptied.” The article buys, hook, line and sinker, then- Fed-governor Ben Bernanke’s depiction of so-called global imbalances (the US borrowing from abroad to fund overconsumption; Japan, China, Taiwan, […]
Read more...Mortgage applications are up sharply as homeowners try to take advantage of low 30 year fixed rates. But tighter lending standards means that a fair number will be disappointed. Moreover, the surge in mortgage applications is for refinances rather than new home purchases. And while refis will indirectly help the economy by increasing consumer discretionary […]
Read more...US economists have relentlessly harangued the Japanese for their supposed mismanagement of their post bubble era, which has lead to nearly 20 years of low growth, borderline deflation, with a not-much-discussed, robust export sector. Along with others, we complained in the early days of the Fed/Treasury emergency response that they were taking one of the […]
Read more...So where is my bailout? Now even hedge funds can borrow super cheap if they invest in securitized consumer loans. Really, the Fed is going about this all wrong. Why let hedge fund have all the fun? Private citizens have perilous little to show for all the kazillions thrown at the financial system. The Fed […]
Read more...The end of days must be closer than I realized. Conservative stalwart Fox News is not only taking on the officialdom, it is going after Republican authorities. This is almost as much fun as learning that J. Edgar Hoover was a cross-dresser. But then again, Fox is going after the AIG rescue and the TARP, […]
Read more...We have from time to time chronicled how various Treasury and Federal Reserve interventions have produced unintended, undesirable consequences. The latest example: the Fed’s efforts to push Treasury rates into ZIRP-land is reducing the incentives of traders to repo Treasuries to each other. That then reduces liquidity in the Treasury market. Consider the boldfaced statement […]
Read more...