naked capitalism

doc holiday says:

LOL! That is the best pet picture ever!!

Try this one:

Alternative Instruments for Open Market
and Discount Window Operations

Federal Reserve System Study Group
on Alternative Instruments for System Operations

Board of Governors of the Federal Reserve System, Washington, D.C., December 2002

http://www.federalreserve.gov/ Bo…t_instrmnts.pdf

If the Federal Reserve was to conduct the bulk of its operations in assets other than Treasury securities, the risk of
affecting relative prices across private assets could be significant…

The Federal
Reserve’s current approach limits its credit risks by confining its holdings to Treasuries
and other perceived high-quality assets, as well as to repurchase agreements and
collateralized discount window loans that represent secured credit exposures to strong
counterparties. Thus, the Federal Reserve has been able to maintain both liquidity and
high credit quality. As the pool of marketable Treasuries shrinks, judgments about how
much credit risk to bear and how to employ diversification to manage such risk will
become more critical. Among debt instruments, a portfolio of higher credit quality and
greater diversification often tends to be more liquid under a broad range of conditions
than a portfolio of lower credit quality and lesser diversification, but the relationship is
not ironclad.7 Nonetheless, efforts to minimize credit allocation effects may be reason to
hold a portion of the portfolio in less liquid, less high quality assets.
Whatever its appropriate level, credit risk should be well managed and should not exceed
what is necessary to meet the Federal Reserve’s monetary objectives. One important
reason for much prudence is that knowingly accepting excessive credit risk, like engaging
in credit allocation, can be thought of as an action exercised more appropriately by the
fiscal authorities than by the central bank. Moreover, significant credit problems might
give rise to misunderstandings of the rationale behind the Federal Reserve’s asset
allocation policies and possibly to political interference in these policies. Transparency
about strategy and tactics can reduce the risk of misunderstanding but probably cannot
fully eliminate it.

Purchasing assets with greater credit risk also would raise practical issues. The potential
for credit losses, which often can occur at or just after cyclical troughs, would require the
Federal Reserve to adjust the way it values its portfolio. With risky assets, it would make
sense to place some portion of earnings into a credit loss reserve and conduct frequent
reviews of the portfolio to assess the adequacy of the reserve. Indeed, systematic
reserving and prompt write-downs over a large, highly diversified portfolio should be an
expected part of managing such a portfolio. With risky assets, the Federal Reserve also
would need to develop standards for acquiring and retaining such assets. Higher (that is,
narrower) standards would reduce the total asset pool available to the Federal Reserve
and could make diversification more difficult

russell1200 says:

I was happier with the funny-cute animal pictures. My 4 year old would prefer dinosaurs.

Since you have displayed a concern for a happiness:

More cute animal pictures and some dinosaure pictures as well.

Anonymous says:

OT: Todd Barber, NASA’s lead propulsion engineer on the project, says the transmission signal from the unmanned probe was received at 10:01 p.m. ET Wednesday and “everything looks great.”

The probe was expected to be at a height of nearly 120 miles above the surface of the moon Enceladus as it sweeps through the edge of the geysers and measures their chemical makeup.

The carefully orchestrated event will take Cassini “deeper than we’ve been before,” mission scientist Carolyn Porco of the Space Science Institute said in an e-mail.
Of particular interest is whether the plumes contain ammonia, which can keep water in liquid form and would bolster the theory that liquid water lies beneath.

Just imagine what America could have done with the Trillions wasted on Iraq and the obvious ramifications of all the cash wasted in the subprime Homeownership Society boondoggle! These types of spacecraft cost maybe $200 million, thus we could have sent out thousand of R&D missions and opened a new era of discovery…..but as John Belushi would have screamed…….but NOOOOOOOOO..