Senate energy bill keeps biofuels alive

Senate approves $650M alternative energy billBy MARC LEVY HARRISBURG, Pa. – Builders of wind farms, owners of coal-fired power plants and buyers of hybrid cars and solar panels would be among those who benefit from a $650 million compromise bill approved Wednesday by the state Senate to promote cleaner energies and conservation. ...Read More

Bank losses remain less than a year’s earnings

(Reuters article) Big Banks Lower Outlook, Overshadowing Fed Plan Three major U.S. banks said they expect more write-downs and loan losses in the fourth quarter, eroding investor enthusiam over a Federal Reserve plan to ease the global credit crunch. The warnings from the three banks, Bank of America, Wachovia and PNC Financial ...Read More

GC Tsy changes post announcment

I’m mainly interested in LIBOR over the turn as an indicator or how the new international facility is doing. Also watching to see when higher oil means higher inflation and higher rates, vs. higher oil currently meaning econ weakness and lower rates. Maybe next week after this weeks inflation numbers are out. ...Read More

Fed regs with comments

Note they’ve also added the international arrangements as per my discussion earlier today. The same recommendations suggested in August. 7 Lending by the Federal Reserve The Federal Reserve’s authority to extend loans is a potentially powerful tool with which it can stimulate aggregate demand. Loans to depository institutions can help spur credit ...Read More

Re: new fed lending facility

(an interoffice email) > – any chance they would take discount window rate down intra-meeting (or before year end) seems they don’t have to with this new ‘facility.’ > – have u evaluated the “loan auction” story? Seems a lot like ‘standard’ repo apart from accepting pretty much anything as collateral from ...Read More

More detail on the liquidity facility

looks a lot like the recommendations Karim emailed to them: An article in the Financial Times: Fed officials have dusted down this proposal and adapted it to address the current credit market crisis. Vincent Reinhart, a fellow at the American Enterprise Institute and former chief monetary economist at the Fed, says this ...Read More

Wray discussion

(an email with Randall Wray)  On Dec 11, 2007 10:49 PM, Wray, Randall <> wrote: > Warren: very respectfully, I suggest you might reconsider both your model of the fed’s reaction function as well as the likely course of the “real” economy. > > Whatever the fed might have said about “fighting ...Read More

Fed set to revamp liquidity support

Thanks – sounds very similar to what we recommended to them – Fed acting as ‘broker of last resort’ between member banks in good standing. This will get the fed member banks over year end where the liquidity issues are currently concentrated. Not sure why they didn’t announce this at the meeting ...Read More

Ip: intermeeting ease/action

(an interoffice email)  Thanks, and good call! > > > > Many I spoke to post-fomc talked about an intermeeting ease on the discount > rate. > > Also, that the Fed would use their mouthpieces (Ip,e.g.) to get a message > out tomorrow if today’s reaction went poorly. > > So ...Read More

Roubini blog

Roubini totally doesn’t get it. The point of CB intervention is to keep interest rates at their target rates, not to provide funds for lending, as described in previous posts. This plan will succeed at doing that, best I can tell. It’s all about price, not quantity. That’s all a CB can ...Read More