Category Archives: Federal Reserve

Guest Post: If Credit is Not Created Out of Excess Reserves, What Does That Mean?

By George Washington of Washington’s Blog. We’ve all been taught that banks first build up deposits, and then extend credit and loan out their excess reserves. But critics of the current banking system claim that this is not true, and that the order is actually reversed. Sounds crazy, right? Certainly. But as PhD economist Steve […]

Fed Plays Politics on Banker Pay

The Wall Street Journal has a headline that would warm the cockles of any populist’s heart: “Bankers Face Sweeping Curbs on Pay.” And even more impressive, who is going to rein in banker compensation? The Fed. That alone should tell you there is less here than meets they eye. Let’s look at the outline of […]

Quelle Surprise! Regulators Starting to Worry Re Bank Commercial Real Estate Exposures

Let’s see, Leon Black of Apollo Management, which is a very savvy real estate player, warned of a coming “black hole” in commercial real estate six months ago. US bank regulators seem to be taking warnings of his sort seriously only now. The Fed is poking its nose into the portfolios of some banks, oddly […]

Guest Post: “Assessing the Recent Performance of the Fed”

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. Evaluating the recent performance of the Fed is not a straight forward exercise. The turmoil in the financial system, […]

Guest Post: “The Fed has never believed in sunshine as a disinfectant”

By DoctoRx, who writes at EconBlog Review: In The Fed, the veteran journalist Martin Mayer has written a real-time prequel of the Great Financial Crisis (“GFC”) of the past two years. People may find it a good read or reread because historians have a point of view. If Mayer were a cheerleader for Alan Greenspan’s […]

Is economic boom around the corner?

Submitted by Edward Harrison of Credit Writedowns. Back in February, I asked you if we were experiencing a recession or depression. A plurality said it was a depression with a small ’d.’ I agreed and went on to explain why. Since then, things have changed and we seem to be on the verge of what […]

The Financial Times Joins Fed Flattery Parade: “Fed makes $14bn profit on crisis loans”

I know it may be hard for most readers to believe this, but once upon a time, the New York Times really was a very good paper. I trace its demise to its decision to become a national newspaper, which took place in the later 1990s, instead of a New York city newspaper that set […]

Barney Frank Calls for Audit of Fed, Limits on Emergency Powers

Barney Frank is joining the “rein in the Fed” party, with a key distinction: he wants to steer clear of messing with the central bank’s independence in monetary affairs. Thus, the call for a Fed audit ex that activity is not surprising. However, a possible new front is that Frank also wants to place some […]

Quelle Surprise! Fed Uses Scare Tactics to Try to Forestall Loan Disclosures

In a show of how much our government thinks that serving the financial oligarchy, rather than the citizenry, is its prime duty, the Fed is fighting to stop the court-ordered disclosure of who borrowed money under the Fed’s various lending facilities. The reason I lump the Fed in with “the government” is that the central […]

Labor Leader Chosen to Head of New York Fed Board of Directors

Joseph Stiglitz has said that labor should have a voice in the setting of interest rate policy. Is this change at the New York Fed, teh appointment of the AFL-CIO’s Denis Hughes as the replacement to ex Goldman co-chairman Steve Friedman as chairman of the New York Fed, a step in that direction? If it […]

Stephen Roach: The case against Bernanke

Submitted by Edward Harrison of Credit Writedowns. While most economists have come out in favor of Barack Obama’s decision to re-appoint Ben Bernanke as Chairman of the Federal Reserve Board, Stephen Roach has penned an Op-Ed in today’s Financial Times which highlights the case against Bernanke. It is must reading. Roach has three main points. […]

Guest Post: When At First You Don’t Succeed, Bring In the Reserves

Served by Jesse of Le Café Américain Someone asked why Bernanke seemed so positive about the US recovery, and what he would do if his prediction turned out to be incorrect. The first answer is rather straightforward. He is ‘jawboning’ or trying to increase confidence in the system to motivate businesses to spend and consumers […]

Quelle Surprise! Banking Industry Faring Worse Than Stress Test Assumptions

This blog is a card carrying hater of the stress test farce of earlier this year, The Treasury said from the start that the purpose of the stress tests was to restore confidence and show that the 19 banks tested, which hold 70% of the nation’s deposits, were well capitalized, and then said more or […]

New York Times Joins Bernanke Fan Club

Edmund L. Andrews in the New York Times today depicts Federal Reserve chairman Ben Bernanke as badly treated by his critics. The article verges on hagiography: As central bankers and economists from around the world gather on Thursday for the Fed’s annual retreat in Jackson Hole, Wyo., most are likely to welcome Mr. Bernanke as […]

"Monetizing the Debt: Disinformation in the Blogosphere"

Via e-mail, I received Tyler Durden’s post on supposed Fed stealth monetization of debt via an allegedly stealth repurchase of a big chunk of the Treasury’s latest 7 year bond issue on the Fed’s open market desk. Full disclosure: Tyler Durden has been a guest blogger here, I think he often does a very good […]