Violence continues against the government across Egypt
By: David D Kirkpatrick
CAIRO — Deadly violence against the government broke out around Egypt on Monday as health officials raised to 53 the number said to have been killed the day before in clashes between supporters and opponents of the military takeover that ousted President Mohamed Morsi three months ago.
Daily Archives: October 7, 2013 @ 11:36 pm (Monday)
We’re saved! China Harvard educated Liu He on the job!
Got it-
We’re saved!
China has a Harvard grad on the job!!!
Meet Liu He, Xi Jinping’s Choice to Fix a Faltering Chinese Economy
By Bob Davis and Lingling Wei
October 6 (WSJ) — Liu He, male, is of Han nationality. He was born in 1952, studied at the Renmin University of China, Seton Hall University and Harvard University. Liu He is a famous economist who has focused on macroeconomics, industrial structure, new economic theory and the information industry. Liu has been innovative in his research in these fields since 1987. In recent years, he has published 200 articles, three of which won the National 1st Science Award. One of the three articles was commended by the leaders of the State Council. He has also published 4 monographs, including research on the concepts and practice of Chinese Industry Policy, the rapid increase of the Chinese Economy, enterprise management and developing economic theory. Liu He has participated in several international conferences on behalf of the Chinese Government in the field of economic development, the tendency of macroeconomy, new economy research and enterprise management system research. Currently he is the most influential middle-aged economist in China.
QE is bad for banks
The Fed’s quantitative easing policy per se is nothing but bad for banks.
1. QE forces the member banks to have excess reserves as assets on their balance sheet. These balances earn only .25% lowing the banking system’s net interest margin, return on assets, and return on equity.
2. To maintain high enough average net interest margins (that include the holding of excess reserves) to attract capital, banks tend to charge a bit more for loans to business and consumers, which causes more borrowers to go direct to credit markets and private lenders in general. In other words, QE tends to support disintermediation, as those who can avoid the banks do so.
3. QE lowers interest income paid by govt to the economy, as per the $100 billion of Fed profits turned over to treasury last year. Lower interest income makes the economy that much less credit worthy, thereby lowering its ability to borrow and service bank loans.
Bottom line- QE is a tax on the economy.
And QE is functionally the same as the tsy not having issued the securities in the first place.
However I favor, for example, the tsy not issuing anything longer than 3 mo bills, which is functionally ‘QE max’
Yes, it reduces aggregate demand.
But, for example, I’d rather get my aggregate demand, for a given size govt, from lower taxes than from the tsy or Fed paying interest.
But that’s just me.
;)