Testing the Global Central Bank Swap Network
Central bank swaps are in some ways quite similar to a standard commercial FX swap, but the differences are important and significant.
Read more...Category Archives: Federal Reserve
The Yellen Subsidy: Fed Chair Pumps for Keeping Financiers Fat Over Filling Potholes
Yellen tries conning journalists and the Great Unwashed Public in her defense of preserving the current level of Fed dividends to banks.
Read more...Mario Draghi: The ECB Has No Mandate To Ensure Checks Clear Or Credit Cards Work
By Nathan Tankus, a writer from New York City. Follow him on Twitter at @NathanTankus Last week Mario Draghi held a press conference following the decision to raise ELA a paltry 900 million dollars for Greek banks. In that press conference he said many things but I’d like to focus on one passage that has gotten […]
Read more...Banks are Not Intermediaries of Loanable Funds – and Why This Matters
Problems in the banking sector played a seriously damaging role in the Great Recession. In fact, they continue to. Macroeconomic models failed to explain the interaction between banks and the macro economy. The problem lies with thinking that banks create loans out of existing resources. Instead, they create new money in the form of loans. The traditional model greatly understates bank and macroeconomic risk.
Read more...Unresolved Allegations of Criminal Insider Trading Leaks from the Fed
A segment on yesterday’s Boom/Bust program discusses the still-open inspector general criminal investigation into leaks from the Fed.
Read more...AIG Bailout Trial Judge Rebukes Fed for Overstepping Its Powers but Awards No Damages
The long-anticipated verdict in the AIG bailout trial came yesterday, and the Fed is not happy.
Read more...Ilargi: QE Breeds Instability
Why both Keynes and Minsky regarded low interest rates as poor policy.
Read more...Wolf Richter: When Betting on QE Suddenly Goes Wrong
Central banks think they’re omnipotent – until they aren’t.
Read more...The Fed’s Dereliction of Duty and False Capital Flows Morality
The Fed disavows responsibility for the way US interest rate policy sends money sloshing around the world. It’s a huge mistake intellectually and politically.
Read more...Ilargi: Mario Draghi’s Slippery Downward Slope
Mario Draghi is more and more visibly meddling in politics, yet another reminder that central bank “independence” is a fig leaf.
Read more...Wolf Richter: Atlanta Fed ‘Sticky CPI’ Soars, Hottest Inflation Since July 2008
A jump in “sticky CPI” suggests the Fed may be close to getting the data excuses it needs to raise interest rates.
Read more...Wolf Richter: Afraid of Losing Trillions, Wall Street Fights Fed Rate Hikes
Wall Street working up to another tantrum to head off a rate hike from the Fed. Will it work again?
Read more...Exit Strategy, Part One: ZIRP
Why exit from ZIRP has to precede exit from QE.
Read more...Federal Reserve Goes Silent About Our Freedom of Information Request on Greece
Not surprisingly, the central bank has gone mum about a Freedom of Information Act request we submitted over two months ago.
Read more...Wolf Richter: How Soaring Housing Costs Impoverish a Whole Generation and Maul the Real Economy
Housing costs are beyond the reach of many middle class earners. And while that is no news, housing has been the engine of past recoveries. So inflated home prices are part of why the economy will stay mired in low growth.
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