Stiglitz criticizes Bad Bank Plan

[Skip to the end] He gets some things right, but always manages to get a lot wrong: That amounts to swapping taxpayers’ “cash for trash,” Stiglitz said in a panel discussion at the World Economic Forum in Davos, Switzerland today. “You shouldn’t chase good money after bad. We’re talking about a national debt that’s very […]

Updates on Fed swap lines

[Skip to the end] Still don’t have totals for Fed USD swap lines extended to Foreign CBs. Some info here from last week: ECB Lending, Liabilities Surge to Records Amid Crisis (Update 1) By Simon Kennedy Oct. 21 (Bloomberg) — The European Central Bank’s lending to banks and its exposure to possible collateral losses jumped […]

ECB taking lower quality collateral vs USD lending

[Skip to the end Trichet urges banks to lend after recovery begins (Update2) By Simon Kennedy and Anne-Sylvaine Chassany Trichet acknowledged his own central bank had taken on risk by boosting liquidity and accepting lower-rated securities as collateral for loans. “We’re taking risks and we’ve made decisions that increased our risks, because we were facing […]

Fed to lend to CBs in unlimited quantities unsecured (Update2)

[Skip to the end] Functionally, the Fed seems to have agreed to lend USD to the ECB in unlimited quantities unsecured and non-recourse. This defies comprehension. It’s potentially functionally a fiscal transfer. Interesting they have the authority to do that. They wouldn’t even do it for the US banks where the Fed demands collateral for […]

Bernanke, King Risk Inflation to Extend Growth Party

Mainstream economists will be increasingly stating that the real GDP ‘speed limit’ is falling or even negative. That is, the non inflationary growth potential has dropped, and any attempt to support real growth at higher than that ‘non inflationary natural rate’ will only accelerate an already more than problematic inflation rate. That puts the Fed […]