Category Archives: Federal Reserve

Bank of America Refuses to Play Ball With Overhyped Pimco/Fed/Blackrock Putback Letter

We’ve been astonished at the continued poor reporting on the overhyped mortgage putback possible future action by Pimco, the Fed, Blackrock and others against Bank of America. Everyone seems so mesmerized by the names and the incorrect dollar size attached (the possible action relates to $47 billion of bonds, but the potential liability is much […]

QE2: Bernanke Cuts Geithner Off at the Knees

The Fed’s announcement of $600 billion of intermediate and long Treasury purchase, informally dubbed QE2, teed off a peppy rally in stocks, and led to further weakening of the dollar. These trends were already well in motion thanks to the central bank’s winks and nods that it was going to embark on another round of […]

Bernanke Versus Pimco’s Mohamed El-Erian on QE2

Not only did the Fed announce its controversial $600 billion QE2 program today, but Ben Bernanke felt compelled to defend it in a Washington Post op-ed tonight. For the normally oracular Fed to feel it has to sell its program in a non-financial media outlet says Bernanke must recognize that he is staking on thin […]

Guest Post: Currency Wars and Emerging Markets

By Richard Portes, Professor of Economics at London Business School and President of CEPR, first posted at VoxEU The threat of a currency war between the US and China is one of the main concerns for the G20 ahead of this month’s meeting in Seoul. This column say that while policymakers appear to grasp some […]

Fed Statements Side By Side

The Fed seems to have decided to split a loaf on the conservative side, coming in with less QE than the market’s hopes, at $600 billion, but one might cynically surmise above the low end expectation of $500 billion. Side by side comparison of this FOMC statement with the next most recent courtesy Andrew Horowitz […]

Is the US Taking Too Much of the Brunt of the Crisis Aftermath?

Before readers throw brickbats at me, I’m just acting as the messenger for two articles, one by Harvard’s Kenneth Rogoff, the other by the Financial Times’ Martin Wolf. Each points out that the US is taking a proportionately bigger hit than other big economies post crisis, particularly in terms of unemployment. And this is actually […]

Joe Costello: Democrats Are Running on Empty

By Joe Costello, communications director for Jerry Brown’s 1992 presidential campaign and was a senior adviser for Howard Dean’s effort in 2004 who writes at Archein and New Deal 2.0 Without meaningful reforms, our economy — and our politics — will continue to suffer. New York, New York big city of dreams And everything in […]

“How to Destroy a Bank”

Your humble blogger is quoted at some length in this Playboy article (yes, article, remember the classic male wink and nod about buying Playboy for its articles) along with Bill Black. This piece was heralded in the New York Times. An excerpt: On the night of March 10, 2010 an otherwise anonymous American financial writer […]

Guest Post: Is there a bubble in the bond market?

By John Y Campbell, Adi Sunderam, and Luis M Viceira, first posted at VoxEU The historically low yields on Treasury bonds are the hallmark of a bubble, according to some commentators. This column analyses the relationship between bond yields, the stock market, and inflation over the past 50 years. It finds that the riskiness of […]

Treasury Thumbs Nose at Bloomberg FOIA Request on Citi Guarantees

In Rudy Giuliani’s second term as mayor, the famed backer of law n’ order had a great fondness for taking it into his own hands. Groups that wanted to assemble on the steps of City Hall were required to file a notice or petition of some sort. A peculiar ritual would then ensue. The mayor’s […]

Richard Alford: The Fed’s Mission Creep – Taking Too Many Roles Means Doing None of Them Well

By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. In the 1960s and 70s, an arm of the US government destroyed villages in Vietnam in order to save […]

Richard Alford: Fed Hasn’t Learned From the Crisis

By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Even prior to the financial crisis of 2007, economists and policymakers actively debated whether central banks should use interest […]

“A currency war the US cannot win”

Yves here. This post cites a number of recent Western commentaries on China’s currency policies; I suggest, for one stop shopping, you read Martin Wolf comment, “Why America is going to win the global currency battle.” There are several points in the argument below that are curious, to say the least. One is the notion […]

Stiglitz Bashes QE

The comment by Joseph Stiglitz in the Financial Times lambasting the Fed’s expected move to quantitative easing is certain to have no impact on the central bank’s course of action. His article nevertheless is proof that this idea is not as well received as the officialdom would like you to believe. It isn’t merely Stiglitz’s […]

Satyajit Das: Weapons of Choice in Trade Wars

By Satyajit Das a risk consultant and the author of the Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives During the European debt crisis, in a matter of days, the dollar strengthened by around 10%. The weakness of the Euro and resultant appreciation of the Renminbi by over 14% reduced […]