Tag Archives: Email

For BTPS & SPGBs all inter dealer screens have gone blank

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As previously discussed, it’s hard to see how anyone with fiduciary responsibility can buy Italian debt or any other member nation debt after EU officials announced the plan for 50% haircuts on Greek bonds held by the private sector.

Yes, all governments have the authority, one way or another, to confiscate an investors funds. But they don’t, and work to establish credibility that they won’t.

But now that the EU has actually announced they are going to do it, as a fiduciary you’d have to be a darn fool to support investing any client funds in any member nation debt.

The last buyer standing is and was always to be the ECB, which will now be buying most all new member nation debt as there is no alternative that includes survival of the union.

And when this happens there will be a massive relief response, as the solvency issue will be behind them, with the euro firming as well.

Then the reality of the state of their economy take over, as GDP continues to fade and unemployment continues to rise until they figure out austerity can’t work and instead they need to proactively increase their member nation’s budget deficits.

Hopefully this doesn’t take quite so long as it took to figure out the ECB has to write the check.

But this one might take even longer as it will be a function of blood in the streets rather than funding capacity.

   
>   (email exchange)
>   
>   On Wednesday, November 09, 2011 5:37 AM, Dave wrote:
>   
>    For BTPS & SPGBs all inter dealer screens have gone blank and there is no liquidity left.
>    There are really no quotes for even 10y BTPs for example and the last bids were hit
>    about 80BP wider for the day vs Bunds.
>   

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“Lessons from the Global Crisis: A New Paradigm?”

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2nd Mecpoc Symposium


LESSONS FROM THE GLOBAL CRISIS: A NEW PARADIGM?


Sponsored by the Mosler Economic Policy Center

Each year the Mosler Economic Policy Center at Franklin College Switzerland is the proud sponsor of the annual Mecpoc Symposium.

This year’s Mecpoc Symposium, Lessons from the Global Crisis: A New Paradigm?, will take place in Franklin College’s Kaletsch campus auditorium on Tuesday, April 21, 2009 from 2:00 – 7:00 pm. For a complete program of the symposium and the guest speakers’ biographies, please visit Franklin College’s Conference site at www.fc.edu/mecpoc.

Thanks to the Mosler Economic Policy Center this conference is free of charge.

Kindly let us know if you will be able to attend by sending an email to mecpoc_symposium@fc.edu or by calling us in Lugano (Tel. +41 91 986-3609 or
Fax. +41 91 986-3640) at your earliest convenience

Mecpoc, the Mosler Economic Policy Center, at Franklin College Switzerland promotes and encourages education and research in new concepts and methods of economic policy analysis. For more information about Mecpoc please visit www.mecpoc.org.

Conference Details:

Tuesday, April 21, 2009
14.00 – 19.00
Franklin College Auditorium
Kaletsch Campus
Via Ponte Tresa 29, Sorengo (Lugano Switzerland)


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Re: Bernanke on 60 Minutes

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(email exchange)

Thanks!

Got it on my blog yesterday and added it to the attached draft in progress as well.

I cut his response a bit short to save the point that he missed the point ‘fundamentally’ even though he got this operational point right.

While in the operational sense ‘taxpayer money’ is never spent per se, in the macro sense tax liabilities function to reduce demand which is the real tax, and allows
government to buy the unsold output and move those goods and services to the public domain.

So in that sense, any government spending that buys goods and services is ‘spending taxpayer money’.

So the ‘right’ answer is that when the Fed buys financial assets, and not goods and services, it is not ‘spending tax payer money’ but merely exchanging one financial asset- balances in a fed bank account- for another- the financial asset it purchases. And the further economic effect of purchasing financial assets is that of lower interest rates than otherwise.

It’s about price, not quantity!

Best!

Warren

>   
>   On Tue, Mar 17, 2009 at 2:50 AM, Felipe wrote:
>   
>   Hi Warren,
>   
>   I am sending the link of the “60 Minutes” interview of Bernanke
>   by journalist Scott Pelley. In particular, pay attention to his interview
>   Part I around 8:00 min. Bernanke explains how the Fed buys assets.
>   He admits that it is not taxpayer’s money; but it is just numbers on
>   Fed’s balance sheet.
>   
>   Best,
>   Felipe Rezende
>   

Part I

Part II


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Re: Fannie & Freddie

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(an email exchange)

>
>   On Mon, Apr 21, 2008 at 9:55 AM, Russell wrote:
>
>   Fannie and Freddie now back 82% of all mortgages in the U.S.,
>   up from only 46% in the second quarter of 2007. If they need
>   a bailout – could be a trillion dollars –

Funds are already advanced to the homeowners which supports demand.

A ‘bailout’ would only be an accounting entry between the government’s account and the agency’s account – no effect on aggregate demand.

>   the USA may lose its AAA credit rating.

Like Japan did. Just another sign of incompetance by the ratings agency if it happens.

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