I happened to meet an official in the Fed’s Banking Supervision and Regulation division at a cocktail party this evening and chatted him up. He helped brief Roger Cole before met with the Senate Banking Committee last month to defend the Fed’s conduct regarding subprimes, so he is up to speed on this topic. Readers […]
Read more...Michael Shedlock has a post, “Real World vs. Financial World,” which has a lot of interesting charts, which in his view pointed to an upcoming recession. The ones that interested me in particular related to money supply. As readers may know, money supply has fallen out of favor (the Fed prefers inflation targeting these days), […]
Read more...Kudos for an excellent post, “Inflation Targeting is Flawed,” by Michael Shedlock at Mish’s Global Economic Trend Analysis. Like many other observers, we’ve criticized the Fed’s failure to consider, or even acknowledge, asset price inflation in its monetary policy decisions. Instead, the Fed and other central bankers focus on traditional price inflation, and stick their […]
Read more...Oddly, this story, which runs in today’s Financial Times, does not seem to have been reported in the Wall Street Journal or the New York Times (and perhaps not on Bloomberg either, but I am less certain since its search tools for the great unwashed aren’t foolproof). The findings, at least for the Fed, are […]
Read more...Due to Paul Volcker’s having broken the back of inflation in the early 1980s, and Alan Greenspan performing what appears to be adequately on the substance of his job and masterfully at the showmanship, the Fed’s reputation is at an all time high. And that in and of itself is a danger sign. The Fed’s […]
Read more...In an interview with the Financial Times, Larry Fink, the CEO of BlackRock, one of the world’s largest fund management groups, warns of burgeoning risk in the leveraged loan market, arguing it has the potential to go the way of subprimes, and urges the Fed to take interest. Now this story has more significance than […]
Read more...It’s one thing when people who have little to no experience in the financial markets worry about the risks posed by derivatives and other innovative financial products. It’s quite another when a concerned individual also happens to have been deeply involved in risk management at major Wall Street firms. The financial markets insider is Richard […]
Read more...One can debate whether and how much aid subprime borrowers deserve, but a pair of articles Wednesday illustrates how difficult it will be to come up with any form of relief. In an underreported story, the FDIC hosted a session that included banking and mortgage industry leaders, legislators, investment bankers, and representatives from the SEC, […]
Read more...In theory, Monday’s Supreme Court decision to bar state oversight of subsidiaries of federally chartered banks was simply a confirmation of the Office of the Comptroller of the Currency’s efforts to assert (and some would say extend) its authority, but the effect is to end the dual structure which permitted both federal and state regulation […]
Read more...If you believe in technical analysis, when a commodity or security price falls below a “support level” it will continue in the same direction until it finds a new (lower) support level. Even if you don’t subscribe to this school of thought, it is surprising and likely Not Good that the dollar is falling. One […]
Read more...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 […]
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