FF Archive

Re: The Sunny Side

[Skip to the end] (an email exchange) >    >   On Tue, Sep 16, 2008 at 10:24 AM, Tom wrote: >    >   Hi Coach, >    >   While financial markets are in a meltdown not unlike the post 9/11 >   experience, >    yes, major deleveraging going on >    >   the good news is that central banks around the world ...Read More

Yellen the Dove on inflation

“Inflation is a problem,” she said. Yet the problem isn’t excessive demand, rising wages, or a tight labor market, but “negative supply shocks.” Once the shocks wear off, the inflation rate can’t be sustained in the long run without a pick-up in wage growth, she said. “There’s no textbook answer to what ...Read More


Yes, the below analysis has also been the Fed’s position, up until this week’s speeches. It’s been about a crude/food/$ negative supply shock, supported by Saudis/Russians acting as swing producer and biofuels linking crude prices to food prices. The fed has called the price hikes relative value stories that they don’t want ...Read More

FOMC preview

My guess is the GDP forecast the Fed is now getting from it’s staff is not a downgrade from previous forecasts, and may even be an upgrade due to: The blowout durable goods numbers The drops in claims following the high unemployment number The private forecasts on average show 65,000 new jobs ...Read More

Fed comments

The Fed is aware rate cuts don’t do much for near term financial disruptions. For example, the FF/LIBOR spread was first addressed with FF cuts, but little or nothing changed until the TAF was introduced to address and normalize that spread. Along the same lines, Bernanke has recently met with the President ...Read More

Re: FF vs. LIBOR

(an interoffice email) On Jan 14, 2008 10:29 AM, Warren Mosler wrote: > thanks, continued tafs will get it to wherever the fed actually wants > it. it’s a policy rate they can administer at will. > > > > > > > On Jan 14, 2008 10:16 AM, Pat Doyle wrote: ...Read More

Fed’s Lockhart: economic outlook

He is currently leaning towards cuts, but watching carefully for signs of improvements in market functioning and output, and aware of the risks of his inflation forecast being wrong. Fed’s Lockhart: Economic Outlook From Atlanta Fed President Dennis P. Lockhart: The Economy in 2008 Looking to 2008, I believe the pivotal question—the ...Read More

The subprime mess

On Jan 5, 2008 9:40 PM, Steve Martyak wrote: > http://www.autodogmatic.com/index.php/sst/2007/02/02/subprime_credit_crunch_could_trigger_col > > > also…. > > 9/4/2006 > Cover of Business Week: How Toxic Is Your Mortgage? :. > > The option ARM is “like the neutron bomb,” says George McCarthy, a housing > economist at New York’s Ford Foundation. “It’s ...Read More

Re: US Libor GC Spreads comment

(an interoffice email) Good report, thanks! On Jan 4, 2008 10:41 AM, Pat Doyle wrote: > > > > Pre- August 2007 GC US Treasury’s repo averaged Libor less 17 across the > curve. In early August and again in early December the spread between GC > and Libor hit it’s wides ...Read More

Fed’s best move

From the Fed’s theoretical framework, their best move is: ♦ Cut the discount rate to 4.5 ♦  Leave fed funds at 4.5 ♦ Remove the stigma from the window ♦ Allow term window borrowing over the turn ♦ Accept any ‘legal’ bank assets as collateral from member banks in good standing ♦ ...Read More