Uncategorized Archive

Roubini prediction

[Skip to the end] Yes, getting closer. The eurozone could be first. All due to errant political responses. This did not have to happen. Operationally it’s a simple matter for governments to spend their way out of it. The problem is political, mainly due to ignorance of monetary operations and how a ...Read More

Canada News | Ottawa to guarantee inter-bank lending

[Skip to the end] Excellent move! Someone finally understands that the CB demanding collateral from its own regulated banks is redundant for ‘local currency’ lending to member banks. The Fed should have done this long ago and saved a year of financial turmoil, as I’ve been proposing for a long time. This ...Read More

ECB taking lower quality collateral vs USD lending

[Skip to the end Trichet urges banks to lend after recovery begins (Update2) By Simon Kennedy and Anne-Sylvaine Chassany Trichet acknowledged his own central bank had taken on risk by boosting liquidity and accepting lower-rated securities as collateral for loans. “We’re taking risks and we’ve made decisions that increased our risks, because ...Read More

Putin consolidating control

[Skip to the end] As suspected: Putin may Use Credit Squeeze to ‘Destroy’ Oligarchs (Update1) By Torrey Clark and Henry Meyer Oct. 17 (Bloomberg) — Vladimir Putin came to power in 2000 vowing to destroy Russia’s oligarchs “as a class.” Within two years, he’d driven two into exile and imprisoned another. Now, ...Read More

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