We’ve argued several times that the Fed isn’t what it used to be (see here and here and here), so we are gratified to see other commentators take up the theme. The headline the title of a post by Russell Wood at Seeking Alpha. It makes some important observations: the Fed regulates banks only, and […]
Read more...So far, it hasn’t gotten much attention in the mainstream business press, but Bloomberg and the Financial Times are very much on top of the story: the House Financial Services Committee is moving forward with proposals to impose new regulations on subprime lending. And Democrats and Republicans are largely on the same page. There are […]
Read more...The Financial Times today reports on an open letter from Charles Dallara, the head of the lobbying group representing the world’s largest financial institutions, to Gordon Brown, the UK chancellor and chairman of the IMF’s governing council, on the risks to growth. What is fascinating, and worrisome, is that the letter doesn’t talk about the […]
Read more...Perhaps I’m in a jaded frame of mind. but today is one of those days where the news items don’t strike me as all that compelling. There are days where there really isn’t much new in the news (and juicy byplay is wanting as well). In the early 1990s, I was in Bali for six […]
Read more...There are two reasons this item, picked up in Felix Salmon’s blog, is noteworthy. The first is that investment banks happily extending their balance sheets to help get M&A transactions done is a classic sign of the end of a cycle. The second is that Salmon, who is vastly more sanguine about the state of […]
Read more...Right now, we have an unusually apparent difference of opinion between the market and the Fed. Bernanke in his Congressional testimony last week said as clearly as a Fed chairman could that the Fed thought growth prospect for the economy were solid and was concerned about the risks of inflation and plans to keep rates […]
Read more...The Wall Street Journal reports tonight on its website, and presumably tomorrow in its print edition, that Federal Reserve Chairman Ben Bernanke said Friday that ongoing issues in the subprime mortgage market could force bank regulators to rethink their enforcement of a 30-year-old law that requires banks to serve the credit needs in their communities…. […]
Read more...Faithful readers may have read our recent posts on the limits to the Fed’s regulatory authority, both relative to the subprime mess and to the proliferation of new instruments (see here and here and here). We had the spectacle last week of Roger Cole, the Federal Reserve’s director of supervision and regulation appearing before the […]
Read more...Reader DS in on a roll. A couple of days ago, he sent us an e-mail which we posted, with a few comments of our own, as “Toothless Fed.” DS focuses on another remark in New York Fed President Timothy Geithner’s speech last week, “Credit Markets Innovations and Their Implications,” which led him to consider […]
Read more...There is a terrific post by Barry Ritholtz at The Big Picture, “What is the Fed Really Thinking?” which was also picked up by Brad DeLong as an excellent example of Fed-watching. Barry pointed out last week that the latest FOMC report clearly indicated stagflation. He later noted that the market’s peppy response to the […]
Read more...This story in today’s Financial Times, “As America falters, policymakers must look ahead,” is remarkable because, as far as I can tell, it is the first time a prominent economist has come out and said the unwinding of the housing bubble is likely to have nasty consequences (actually, take that back, Paul Krugman had a […]
Read more...The post below is from a reader, DS. He focuses on the fact that the Fed has basically admitted that its powers are limited due to the extent of financial activity that takes place outside its purview (the Fed supervises federally-chartered banks; securities firms, which are regulated by the SEC and hedge funds, which are […]
Read more...A post from a reader, “Toothless Fed,” argues that the latest wave of financial innovation has produced “profit grabs” by the few at the expense of the many, Ponzi schemes, and an erosion of traditional values like prudence. Overheated? Overwrought? Perhaps. Or maybe he’s just calling a spade a spade. Other people are coming to […]
Read more...Forgive us if we seem to be picking on New York Fed president Timothy Geithner. Actually, not that we know him, but he has a reputation (by Fed standards) for candor. So the problems we have with his speech should not be seen as an attack on him, but on the increasing difficulty of the […]
Read more...Most sophisticated financial people I know take great comfort from the happy resolution of the LTCM debacle. As you may know, LTCM (Long Term Capital Management) was a hedge fund created by John Meriwether, a star trader from Salomon who headed its highly profitable bond arbitrage group, and included two Nobel prize winners among its […]
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