Uncategorized Archive

Hurricane Omar

Sorry for the gap. Power and internet down in the Valance office due to hurricane. No other major damage. Everybody is fine. ...Read More

Fed to lend to CBs in unlimited quantities unsecured (Update2)

[Skip to the end] Functionally, the Fed seems to have agreed to lend USD to the ECB in unlimited quantities unsecured and non-recourse. This defies comprehension. It’s potentially functionally a fiscal transfer. Interesting they have the authority to do that. They wouldn’t even do it for the US banks where the Fed ...Read More

Fed to lend in unlimited quantites to foreign CBs??? (Update1)

[Skip to the end] This is hard to believe. Those CBs don’t have unlimited USD. So, if true, they will be borrowing them from the Fed via an extension of Fed swap lines. The FOMC has approved lines of $620 billion as last reported. This is functionally unsecured lending to these CBs. ...Read More

European leaders vow Bank guarantees, bid to stop financial rot

[Skip to the end] Hopefully this will buy some time to hope for a general recovery of output and employment that contains the national deficits. This plan is also coordinated but still relies on the national government’s balance sheets. European Leaders Vow Bank Guarantees, Bid to Stop Financial Rot By James G. ...Read More

Here we go…

[Skip to the end] Giving them a quantity target rather than a price target can mean overpaying to meet their mandated buying requirements. This is a direct fiscal transfer to the sellers of the ‘overpriced’ securities without the compensation or equity costs associated with the TARP. Fannie, Freddie to Buy $40 Billion ...Read More

Fiscal Multipliers

[Skip to the end] Payroll tax holiday right up there for a tax cut! Fiscal economic bank for the buckOne year $ change in real GDP for a given $ reduction in federal tax revenue or increase in spending Tax cuts Non-refundable lump sum tax rebate 1.02 Refundable lump sum tax rebate ...Read More

Ambrose Evans-Pritchard: Europe’s banks more leveraged than U.S. banks

[Skip to the end] Ambrose Evans-Pritchard: Europe’s banks more leveraged than U.S. banks By Ambrose Evans-Pritchard Oct. 2 (The Telegraph) It took a weekend to shatter the complacency of German finance minister Peer Steinbruck. Last Thursday he told us that the financial crisis was an “American problem,” the fruit of Anglo-Saxon greed ...Read More

Paulson Plan

[Skip to the end] Let’s also remember that with a 30% corporate income tax, for example, government functionally owns 30% of all the corporate equity, listed and unlisted, large or small, etc. And if it wants more, for example, it can raise the tax. This is the ‘direct pipe’ and it can’t ...Read More

France/Germany headlines

[Skip to the end] (From Reuters) France to propose EU Rescue Plan for Banks 300 billion EUR EU Countries should contribute 3% of GDP to Plan Germany Completely disagrees with French Bank Rescue plan [top] ...Read More

Warren B turns 59 today!

[Skip to the end] [top] ...Read More