Treasury Secretary Archive

Treasury Secretary choices

[Skip to the end] (email exchange) >    >   On Fri, Nov 7, 2008 at 11:12 PM, wrote: >    >   Geithner’s very smart, >    Then why couldn’t he even hit his Fed funds target? When I asked operations people at the NY Fed why they can’t just make a one basis point market around the ...Read More

Banking model

[Skip to the end] Once again, we are seeing that using the liability side of banking for market discipline doesn’t work. That’s why deposit insurance exists in every sustainable banking system in the world. It’s also why a floating foreign exchange rate is ‘superior’ to a fixed foreign exchange rate. With fixed ...Read More

Why it matters how the 700 billion is accounted for

[Skip to the end] It would be counter productive to add the $700 billion to the budget deficit calculation if the proposal goes through and is executed, since Congress is likely to take measures to somehow constrain spending or increase revenues to try to ‘pay for it’. This would be highly contractionary ...Read More

Reinhart got it right

[Skip to the end] I hadn’t noticed this back then, but Vince got it right: The Fed purchased the $30 billion of securities from JPM/Bear Stearns, with JPM agreeing that if there were any net losses it would be responsible for the first $1 billion. It’s very odd that the Fed would ...Read More