Category Archives: Federal Reserve

British regulators disclose terms of emergency aid during panic of 2008

By Edward Harrison of Credit Writedowns The Financial Times reports that British regulators have now opened up to reveal more of the details surrounding the emergency aid banks received during the most acute periods of stress to date in the financial crisis. Meanwhile, in the U.S., the Federal Reserve continues to resist providing greater details. […]

Scare-Mongering Over Fed Oversight Bill

Full disclosure: I love Andrew Ross Sorkin’s Too Big To Fail and think everyone should read it. But having said that, Sorkin has spent a bit too much time running with the big dogs. In today’s piece in the New York Times, he hones in on an amendment added to the Paul/Grayson bill passed last […]

Dodd: Bernanke Confirmation “Not Necessarily” a Foregone Conclusion

This clip is from an interview with blogger Mike Stark. Apologies for the poor sound quality. While Dodd indicates that he is “inclined to be supportive” of Bernanke, he is surprisingly cautious about making a broader statement, a sign of a shift in sentiment.

Audit the Fed Bill: Attempted Saturday Night Massacre Underway

So get this, sports fans: the day (or maybe two max) before the so-called Audit the Fed bill (a bipartisan initiative to increase transparency) has a torpedo shot at it by a member of the House Financial Services committee, one Mel Watt of North Carolina. Of course, his amendment professes to increase transparence too, but […]

“Dudley and the Missing Lessons of the Financial 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. On Friday, William Dudley, President of FRBNY, gave an excellent presentation on the financial crisis. The speech was a […]

“Should America Kowtow to China?”

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Another Presidential junket to Asia and another one of the usual lectures from China, decrying our “profligate ways”. Today’s Wall Street Journal reports:, “China’s top banking regulator issued a sharp critique of U.S. financial management only hours before President Barack […]

China Lambastes Dollar “Carry Trade,” Diverting Attention from Its Currency Manipulation

What a difference seven years makes. No one had a problem with Japan having super low interest rates and stoking a global carry trade, nor with the US running overly loose monetary policy that led to a real estate bubble that spread its impact beyond our borders via the creation of toxic mortgage product sold […]

Guest Post: Trading This Crisis for The Next

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. The G-20 statement contained seven principles to guide policy during the balance of the crisis period. However, the agreed […]

Mishkin Defend Bubbles (and of Course, the Fed)

The press becomes more surreal with every passing day. If we didn’t all have a stake in the outcomes, this would make for great theater. First we have the absurd spectacle of bankers claiming that they are doing God’s work. Great! Then they should be willing to do it for free. I don’t recall the […]

Guest Post: Was it “Nobody Saw It Coming” or “Everybody Who Saw It Coming Was a Nobody”?

By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. A number of economists, economic policymakers, regulators, and central bankers have attempted to explain away their failure to both […]

Mirabile Dictu! Goldman Lost Money Only One Day in Last Quarter

OK, I have heard all the explanations, spreads are wider because there are fewer market makers, asset prices are rallying (market making firms are structurally long; it’s difficult and costly to go net short on that big a balance sheet), Goldman is currently the trading kingpin. But I still find these factoids remarkable: Goldman lost […]

Guest Post: Wall Street Journal Admits Economists Were Wrong, But Fails to Discuss their INCENTIVE for Being Wrong

By George Washington of Washington’s Blog. The Wall Street Journal admits this week that economists blew it: The pain of the financial crisis has economists striving to understand precisely why it happened and how to prevent a repeat… The crisis exposed the inadequacy of economists’ traditional tool kit, forcing them to revisit questions many had […]

The creeping power grab by the executive branch and Federal Reserve

By Edward Harrison of Credit Writedowns Yves is tied up in the never-ending ordeal that is writing a book, so I will fill in a few gaps by posting on NC today. Let’s wish Yves well in getting this thing sorted. The power grab at the Federal Reserve is a topic I first broached back […]

Guest Post: Take the Power to Create Credit Away from the Giant Banks and Give It Back to the People

By George Washington of Washington’s Blog Many people – including former analyst for the U.S. Treasury Richard Cook – argue that credit is too important a function to be left to the private banks. Indeed, even after taxpayers have given trillions in bailouts, backstops, guarantees, and other gifts, the giant banks are still not lending […]

Roubini Predicts “Mother of All Carry Trade Unwinds”

Nouriel Roubini has officially left the “hedging your bets on the economy” camp. He has declared the markets to be frothy because super low dollar borrowing rates have turned the greenback into the funding currency for the carry trade. Far more important than the peppy rally in the stock market is the resumption of early […]