Wray discussion

(an email with Randall Wray)  On Dec 11, 2007 10:49 PM, Wray, Randall <[email protected]> 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

Re: credit recap

(an interoffice email) > > > > Mkt did not like the Fed move today- IG9 went from 70 out to 78.75 after the > news. CMBS cash (which had a roaring spread tightening in the morning of > about 15bp) gave all but 6bp of it back. There was a rumor ...Read More

UST ASW update

(an interoffice email) > > > 16bp day for 2yr spreads today: > > > > The market went into the fed announcement expecting perfection > > 25-50bp cut and 50bps on the discount window. > > > > Spreads were 6 lower on the day in the 2yr sprds and 3 ...Read More

Financing desk comments

I’m lost for an explanation as to whey the Fed ignored the year end liquidity issue entirely, after alluding to it in various speeches and allowing the impression that they were going to address it at the meeting persist. Keep me posted as to how LIBOR is over the turn (as well ...Read More

FOMC

(interoffice email) > Dovish statement not matched by actions (no lowering of FF-Discount Rate > spread). As Tom Brady recently commented, “Well done is better than well > said”. Yes, seems they ignored the FF/LIBOR an year end issues in general. After two cuts in the FF and the discount rates that ...Read More

Dec 11 balance of risks update

Labor markets remain stronger than expected, right up through this morning’s Manpower survey for next quarter. Inflation risks remain elevated, with estimates of 1.5% PPI and 0.6% CPI the consensus for Thursday and Friday, and CPI core moving higher as well. While several funding spreads have widened vs. fed funds, absolute rates ...Read More

Bear Stearns U.S. Economics: Small business optimism down

The NFIB small business optimism index fell to 94.4 in November from 96.2 in October. Although the net percentage of firms planning to expand was little changed at 13% in November versus 14% in October, the net percentage of firms expecting the economy to improve fell sharply to -10.0 from -2.0. Watching ...Read More