Category Archives: Federal Reserve

SEC’s Andrew Bowden Regulatory Capture Scandal Hits the Major Leagues with Los Angeles Times Column

Andrew Bowden “Please give my son a job” scandal spreads, and what you can do.

Nomi Prins: The Volatility/Quantitative Easing Dance of Doom

The battle between the ‘haves’ and ‘have-nots’ of global financial policy is escalating to the point where the ‘haves’ might start to sweat – a tiny little. This phase of heightened volatility in the markets is a harbinger of the inevitable meltdown that will follow the grand plastering-over of a systemically fraudulent global financial system.

The Fed Impedes GAO Audits by Destroying Source Documents

Robert Auerbach, an economist to the Committee on Banking and Financial Services during the Arthur Burns, Paul Volcker, and Alan Greenspan chairmanships at the Fed, as well as being a Fed economist and now a professor at the University of Texas (Austin) has a bombshell revelation in his recent book Deception and Abuse at the […]

Michael Hudson: Quantitative Easing for Whom?

Michael Hudson recaps the theory, or perhaps more accurately, political justifications for quantitative easing, as opposed to how it works in practice.

Edwards: “Core Inflation In The US Would Be Just As Low As In The Eurozone If Measured On The Same Basis”

Core inflation is telling a very different story than headline inflation, leading the ECB to diverge markedly from the Fed’s posture.

Dear Federal Reserve: Now is the Time to Raise Interest Rates? Really? Seriously?!?

I am at a complete loss as to why the Federal Reserve might think that now is the moment to begin raising interest rates. I cannot see a scintilla of hard evidence in support, and potent evidence against.

In Rebuke to Cronyistic New York Fed, TBTF Bank Supervision Shifted to Fed Board of Governors

The Wall Street Journal has published an important account of a behind-the-scenes power struggle at the Federal Reserve over authority for regulation. The result that the New York Fed has had significant amounts of its authority shifted to the Board of Governors in Washington, DC. This is a major win for Fed governor Dan Tarullo, who has emerged as one of the toughest critics of big financial firms at the Fed in the wake of the crisis. It is also a loss for the banks, since the New York Fed is widely recognized as close to Wall Street. Moreover, the Board of Governors is more accountable to citizens (its governors are Federal employees, the Board of Governors is subject to FOIA, although confidential supervisory of all financial regulators is exempt), while the regional Feds can best be thought of as public/private partnerships with weak governance structures,* so this move in theory is also a gain in terms of accountability to the public. However, since Greenspan holdover, deregulation enthusiast and Dodd Frank opponent Scott Alvarez remains as the general counsel of the Board of Governors, it’s unlikely that any newfound serious intent by the Board of Governors will go all that far in practice, given the powerful role that Alvarez exerts over matters regulatory.

Wolf Richter: “Default Monday”: Oil & Gas Companies Face Their Creditors as the Fracking Bubble Bursts

Lambert here: Who woulda thunk the Fed’s easy money policy — no, not for you! — would contaminate millions of gallons of water and create exploding “train bombs”? Life’s little ironies…

Robert Parenteau: The Large Fly in Krugman’s New Keynesian Soup

Why New Keynesians look a lot like Friedmaniacs.

Yellen Defies Congress, Defends Greenspanian General Counsel Scott Alvarez After Elizabeth Warren Grilling

Elizabeth Warren subjected Fed chairman Janet Yellen to one of her fiercest interrogations ever in Congressional hearings yesterday.

Two New Papers Say Big Finance Sectors Hurt Growth and Innovation

In a bit of synchronicity, two new papers confirm the long-held suspicion that Wall Street is sucking the life out of Main Street.

Joe Firestone: Return of the Platinum Coin?

Just as sumer is icumen in, so to are budget fights. And that means another opportunity to talk up the platinum coin as a way around budgetary tactics designed to inflict austerity on ordinary Americans.

Obama, Treasury Pushing Back Against Troika Grexit Threats; Bernie Sanders Presses for Fed to Prod ECB

The Administration realizes the risk of Grexit is real and is trying to fend that off. But even if they succeed, don’t expect that to add up to much in the way of relief for Greece.

Is Syriza About to Score a Tactical Win Against the Troika?

Those who were hoping that Syriza would be cowed by the ECB’s aggressive moves to shut Greece out of bond markets and Eurozone finance ministers’ unified resistance to the new government’s proposals are no doubt frustrated by its refusal to capitulate. On Sunday, Greek prime minister Alexis Tsipras gave a rousing speech reaffirming Syriza’s plans.

Why is Yellen Supporting the ECB Attack on Greece?

As we describe in our earlier post today on Greece, the ECB’s hit job on Greece is an continuation of the destructive and ultimately self-defeating practice of letting the pet needs of banks trump those of governments and social orders. The ECB is willing to turn Greece into a failed state out of what looks like sheer brutality, with the apparent rationalization that punishing Greece will serve pour decourager les autres, meaning the other periphery countries, and potentially even France, that are calling for relief from failed austerity policies.