Tue 2010-06-01 18:54 EDT

billy blog >> Blog Archive >> In the spirit of debate ... my reply Part 3

Bill Mitchell

The debate seems to be slowing down which means this might be my last response although we will see...I urge all those who are interested in finding out more about the employment guarantee approach to price stabilisation to read our major Report (released in December 2008) called Creating effective local labour markets: a new framework for regional employment policy...productive is not confined to contributing to the profit bottom-line of a capitalist enterprise. There are many things that deliver social returns that will never spin a private profit. Even mainstream economics says optimality should be defined in terms of social costs and benefits. It is just that they never get to that level and slip back always into the private returns mould...It also seems that conservatives in the US are starting to take to modern monetary theory. My colleague Warren Mosler has been giving modern monetary talks to the arch-conservatives in the US at the Tea Party meetings... would advocate that banks be regulated into going to back to being banks and outlawed from being merely commission recipients for securatised package deals etc. I would prevent banks from doing anything other than taking deposits and making loans. All the rest of the behaviour that the banks have been involved in would be outlawed...

Billy Blog; blogs Archive; Debate; reply Part 3; Spirit.

naked capitalism Fri 2010-03-19 16:42 EDT

Indefensible Men

From the December 2009 issue of The Baffler (no online version of this article available). For those not familiar with The Baffler, this is the revival of a magazine of business and culture edited by Thomas Frank that had previously been published from 1988 to 2007. This issue was called ``Margin Call'' and included articles by Matt Taibbi, Naomi Klein, Michael Lind. I believe readers will find this piece to be relevant. Enjoy! Since inequalities of privilege are greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal values spring from, and that general interests are served by, the special privileges which they hold. Reinhold Niebuhr, Moral Man and Immoral Society

Indefensible Men; naked capitalism.

Sun 2010-02-28 12:06 EST

THE PRAGMATIC CAPITALIST >> Buffett Partnership Letters

Warren Buffett

February 1959 Letter February 1960 Letter January 1961 Letter July 1961 Letter January 1962 Letter July 1962 Letter December 1962 Letter January 1963... (THE PRAGMATIC CAPITALIST)

Buffett partnership letters; pragmatic capitalists.

The Economic Populist - Speak Your Mind 2 Cents at a Time Sun 2009-12-13 09:08 EST

RUBIN'S RUBES: Matt Taibbi's slapdown of the Obama Administration

In the December issue of Rolling Stone the journalist Matt Taibbi hits yet another grand slam exposing the murky world of Wall Street and Washington politics ("Obama's Big Sellout"). Taibbi provides a detailed and thoughtful analysis on the myriad connections between numerous Obama appointees and Robert Rubin, the Obama presidential campaign's economic advisor, and former Clinton Treasury Secretary who led the charge for the passage of the Gramm-Leach-Bliley Act of 1999, to create the megamerger that was to become Citigroup.

economic populist; Matt Taibbi's slapdown; Mind 2 Cents; Obama administration; RUBIN'S RUBES; speaking; Time.

zero hedge Mon 2009-10-26 09:28 EDT

How The Federal Reserve Bailed Out The World

The Bank of International Settlements [BIS] just released a major paper titled "The US dollar shortage in global banking and the international policy response" which goes on to demonstrate just how it happened that Fed chief Ben Bernanke in essence bailed out the entire developed world, which was facing an unprecedented dollar shortage crisis due to the sudden implosion of FX swap lines and other mechanisms which until that point were critical in maintaining the dollar funding shortfall for virtually every foreign Central Bank...When the financial system almost imploded in the fall of 2008, one of the primary responses by the Federal Reserve was the issuance of an unprecedented amount of FX liquidity lines in the form of swaps to foreign Central Banks. The number went from practically zero to a peak of $582 billion on December 10, 2008. The number of swaps outstanding was almost directly inversely correlated with the value of the dollar...what happened is that short-term sources to sustain the massive dollar funding mismatch disappeared virtually overnight, and CBs were suddenly facing a toxic spiral of selling increasingly more worthless assets merely to satisfy currency funding needs in an environment where all of a sudden nobody was willing to provide FX swap lines...had the Fed not stepped in, the rest of the world...would have simply collapsed as the $6.5 trillion dollar funding gap closed in on itself, causing a indiscriminate selling off of all dollar denominated assets. The implosion of the basis trade would have seemed like a picnic compared to what was about to ensue had the Fed not stepped in to perpetuate the Fiat banking way of life.

Federal Reserve bail; world; Zero Hedge.

zero hedge Sat 2009-10-10 11:57 EDT

The Federal Reserve's Balance Sheet: An Update

Ben S. Bernanke

...the Federal Reserve has faced two historically unusual constraints on policy. First, the financial crisis, by increasing credit risk spreads and inhibiting normal flows of financing and credit extension, has likely reduced the degree of monetary accommodation associated with any given level of the federal funds rate target, perhaps significantly. Second, since December, the targeted funds rate has been effectively at its zero lower bound (more precisely, in a range between 0 and 25 basis points), eliminating the possibility of further stimulating the economy through cuts in the target rate. To provide additional support to the economy despite these limits on traditional monetary policy, the Federal Open Market Committee (FOMC) and the Board of Governors have taken a number of actions and initiated a series of new programs that have increased the size and changed the composition of the Federal Reserve's balance sheet. I thought it would be useful this evening to review for you the most important elements of the Federal Reserve's balance sheet, as well as some aspects of their evolution over time. As you'll see, doing so provides a convenient means of explaining the steps the Federal Reserve has taken, beyond conventional interest rate reductions, to mitigate the financial crisis and the recession, as well as how those actions will be reversed as the economy recovers...

Federal Reserve's balance sheet; Update; Zero Hedge.

Mish's Global Economic Trend Analysis Wed 2009-08-26 15:55 EDT

Emails from a Bank Owner regarding FDIC and Under-Capitalized Banks

Michael Shedlock

Here is an interesting Email from a Bank Owner and CEO regarding As of Friday August 14, 2009, FDIC is Bankrupt. ``I have been in banking for over 30 years and from my perspective this is much worse than anything I have seen.'' ABO, who as been in the business 30 years, writes: A comment concerning the FDIC - As of June 30 the rates being charged banks have increased substantially. Risk 1 category went to 12 basis points from 5, risk 2, 17 basis points, risk 3, 35 basis points, and risk 5, 50 basis points. Additionally, a 5 basis point special assessment is being charged on September 30 on total assets less tier 1 capital. It is probable that a second assessment will also be charged in December. The cost of FDIC insurance for a two hundred million dollar, 1 risk rated bank last year would have been around...

bank owner; capitalized banks; Email; FDIC; Mish's Global Economic Trend Analysis.

Mon 2009-01-19 00:00 EST

Calculated Risk: LA Area Port Traffic Collapses in December

Calculated Risk; December; LA Area Port Traffic Collapses.

Fri 2009-01-16 00:00 EST

naked capitalism: WSJ: Chinese Imports, Exports Continued to Fall in December

Chinese imports; December; Exports Continued; Fall; naked capitalism; WSJ.

Thu 2009-01-15 00:00 EST

Hussman Funds - Weekly Market Comment: The Dollar Crisis Begins - December 22, 2008

Hussman Funds - Weekly Market Comment: The Dollar Crisis Begins, by John P. Hussman; ``foreign holders of Treasury securities are facing probable losses, and they know it''

2008; December 22; Dollar Crisis Begins; Hussman Funds; weekly market comments.

Mon 2008-12-15 00:00 EST

Hussman Funds - Weekly Market Comment: Recognition, Fear and Revulsion - December 15, 2008

``Bear markets tend to experience a series of separate lows on what I'd call recognition, fear, and revulsion.''

2008; December 15; fears; Hussman Funds; recognition; revulsion; weekly market comments.

Wed 2008-07-09 00:00 EDT

The GOP's December Surprise

by James K. Galbraith; s the GOP cooking the books to avoid recession till after Election Day? Fed eases for republican incumbents, tightens for democrats!

GOP's December Surprise.

Tue 2008-02-12 00:00 EST

Market Ticker: The Most Important Ticker You Will Read This Year - UPDATED

Market Ticker: The Most Important Ticker You Will Read This Year; "Fed has been aggressively draining the SOMA account, with the pace of that drainage stepping up precipitously since December"

Important Ticker; Market Ticker; reads; Update; years.

Mon 2007-12-10 00:00 EST

Hussman Funds - Weekly Market Comment: December 10, 2007 - Overbought in an Unfavorable Market Climate

"Treasure plan...equivalent of the FEMA response after hurricane Katrina"; "Provably incorrect ideas are eventually proven incorrect."

2007; December 10; Hussman Funds; Overbought; Unfavorable Market Climate; weekly market comments.

Tue 2007-12-04 00:00 EST

Hussman Funds - Weekly Market Comment: An Irrelevant Fed - Thimbles of Water in a Forest Fire - December 4, 2007

2007; December 4; forest fire; Hussman Funds; Irrelevant Fed; thimbleful; water; weekly market comments.