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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Archive for September 15th, 2009

Employment Chart

Posted by WARREN MOSLER on 15th September 2009


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Excellent presentation:

Job Voyager


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Posted in Employment | 2 Comments »

King Comments on rate paid Bank Reserves

Posted by WARREN MOSLER on 15th September 2009


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Might be secretly worried about the relatively strong currency.

Many of them still think rates matter for the level of their currency even though the BOE research says they don’t matter.

>   
>   (email exchange)
>   
>   On Tue, Sep 15, 2009 at 5:34 AM, Dave wrote:
>   
>   BOE King states that BoE will look at reducing deposit rate on reserves
>   
>   Front end rallies, 1*1 at 2.565% currently, had traded as high as 2.68%
>   prior to announcement
>   

  • KING SAYS LOWER RATE COULD MEAN MORE BUYING OF S-TERM GILTS
  • KING SAYS IT MAYBE A USEFUL SUPPLEMENT, WON’T BE MAJOR CHANGE
  • KING SAYS BOE WILL REFLECT ON LOWERING DEPOSIT RATE
  • KING SAYS YOU COULD HAVE LOWER REMUNERATION RATE FOR RESERVES
  • KING SAYS BOE IS LOOKING AT REDUCING DEPOSIT RATE FOR RESERVES
  • KING SAYS THERE’S LIMIT TO HOW FAR BOE CAN GO ON RESERVES
  • KING SAYS BOE DOESN’T WANT RESERVES UNNECESSARILY HIGH
  • KING SAYS ASSET PURCHASES AUTOMATICALLY RAISE BANK RESERVES


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Posted in CBs | No Comments »

NPR discussion

Posted by WARREN MOSLER on 15th September 2009


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>   
>   (email exchange)
>   
>   On Mon, Sep 14, 2009 at 10:45 AM, wrote:
>   
>   By the way, you didn’t hear NPR this morning, but there was the usual hagiography
>   about how the Fed averted a Great Depression last year because it “created”
>   trillions of dollar to support the banking system.
>   
>   But my understanding is that ONLY the Treasury creates money and the Fed simply
>   tries not very successful) to determine a price for the money that is created by
>   TSY.
>   
>   When you look at it this way, the narrative changes considerably.
>   

Yes!

The Fed did loan to banks and act as broker of last resort between banks who had Fed funds and banks who needed them, but that should always be done in the normal course of business.

So I do give them credit for figuring out how to do what they were charged to do from inception in 1913, since Bernanke et al had to play the cards they were dealt.

But even now they haven’t figured out they should just trade Fed funds in unlimited quantities with member banks, at their target rate, and instead use an alphabet soup of programs to get that done indirectly.


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Posted in CBs, Fed | 1 Comment »

Your thoughts on wall street remaining intact

Posted by WARREN MOSLER on 15th September 2009


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A Year Later, Little Change on Wall St.

As previously suggested, wealth is flowing to the top from the bottom as gdp grows some, unemployment climbs, and wages languish:

Despite the predictions last year about pay cuts, those bonuses appear secure. Kian Abouhossein, an analyst at J.P. Morgan in London, predicted this week that eight major American and European banks would pay the 141,000 employees in their investment banking units $77 billion in 2011 — about $543,000 per worker, not far from the 2007 peak — even after minor regulatory changes are adopted.

>   
>    Can the mortgage fraud environment return?
>   

Lenders/investors will be smarter for a while, best guess. But always ripe for the next fraud.


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Posted in Banking, Credit | 3 Comments »

Quincy Herald Whig

Posted by WARREN MOSLER on 15th September 2009


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>   
>   (email exchange)
>   
>   On Mon, Sep 14, Michael wrote:
>   

Tea Party speakers rally Quincy crowd with call to ‘take back your country’

Warren Mosler, an economist who came to Quincy from St. Croix, said the Tea Party movement is gaining momentum as the situation in Washington deteriorates. Unless politicians take notice, he expects the campaign to keep growing.

Made some good progress with some now former deficit terrorists, thanks.
Some I spoke to the night before at dinner told me they altered their presentations accordingly.

Thanks for sending this link to the

Video


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Posted in Government Spending, Mosler 2012 | 3 Comments »

Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

Posted by WARREN MOSLER on 15th September 2009


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Stiglitz has part of it right, but his misguided concern about ‘who is going to finance the US government’ is disquieting at best.

Stiglitz Says Bank Problems Bigger Than Pre-Lehman

The Federal Reserve faces a “quandary” in ending its
monetary stimulus programs because doing so may drive up the
cost of borrowing for the U.S. government, he said.

“The question then is who is going to finance the U.S.
government,” Stiglitz said.


Stiglitz gave the interview before presenting a report to
French President Nicolas Sarkozy that urged world leaders to
drop an obsession for focusing on gross domestic product in
favor of broader measures of prosperity.


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Posted in Banking, GDP | No Comments »