Loading ...Interesting that Buiter repeatedly singles out for Bernanke without mentioning Greenspan the bubbleblower. How does he get a pass?
Our elections must seem like an absolute circus to you folks in Canada. Obama, McCain I can’t see much difference. Biden was an interesting choice for a running mate. Makes me wonder if Obama will actually end up as pres. - even if he wins the election. Moggy had an interesting astro forecast for Obama a while back.
Separately, the authors said a Fed program allowing financial institutions to swap as much as $200 billion of Treasuries for mortgage bonds and other debt allows firms to “window dress” their balance sheets at the end of a quarter.
The program, introduced in March, “may actually hurt rather than help,” Allen and Carletti said.
“Financial institutions can hold low-quality securities for the period where no reporting is required,” they said. “Temporarily increasing the supply of Treasuries makes this kind of deception easier. It helps remove market and regulator discipline.”
http://www.bloomberg.com/apps/news?pid=20601068&sid=aSnuRU7si4_k&refer=home
At the top of the critical list are Fannie Mae and Freddie Mac. The quasi-private mortgage agencies are in danger of being overwhelmed by losses on their holdings of mortgages and mortgage-backed securities (MBS). Ajay Rajadhyaksha of Barclays Capital estimates that Freddie’s balance-sheet has a negative value of at least $20 billion when marked at market prices; Fannie is $3 billion in the red. Both saw their share prices fall about 44% between August 18th and 20th as it appeared ever more likely that the government would intervene, wiping out existing shareholders. They are caught in a trap: the greater the risk of nationalisation, the harder it will be for the two institutions to persuade investors to provide an estimated $15 billion of new capital that each one needs if nationalisation is not to happen.
http://www.economist.com/finance/displaystory.cfm?story_id=11985948
How do you always end up with OPU (other peoples undies). A few more guests and you can start the Belizian Breeze gently used Knicker Company.. Ment can wash, ferret can press and aurum can arrange in color-coded order.
I’m still trying to explain saran wrap futures to my friend.,I keep telling her you’re John Nash’s removed cousin, err I mean once removed cousin and that the fibonacci fig doesn’t stay in sequence without the saran.She just can’t see it. 
It is just all unbelievably whacked.
Woe to us down here.
Now if I could just discover why the PMs crash while demand explodes…….
…..Your 2 Leading candidates are Probably Ineligable…LOL
….Its going to come down to who has the best Lawyers Again….Like The Hanging chads…and Like O J Simpson !
….Ron Paul For President !
….unless of course he was born in Zimbabwe
HA! If you think it is interesting looking from afar…..you should see the zoo from INSIDE the bars!!
Oh it gets even better. John McCain is not a natural born citizen either. He was born in Panama. Too bad we no longer honor this ‘piece of paper’.
Section 1 of Article II of the Constitution contains the clause:
| No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States. |
from wikipedia:
en.wikipedia.org/wiki/Natural-born_citizen
John McCain, who ran for the Republican party nomination in 2000 and is the presumptive Republican nominee in 2008, was born at the Coco Solo U.S. military base in the Panama Canal Zone to U.S. parents. Although the Panama Canal Zone was not considered to be part of the United States,[5] federal law states that “Any person born in the Canal Zone on or after February 26, 1904, and whether before or after the effective date of this chapter, whose father or mother or both at the time of the birth of such person was or is a citizen of the United States, is declared to be a citizen of the United States”.[6] The law that conferred this status took effect on August 4, 1937, one year after John McCain was born — albeit with retrospective effect, resulting in McCain being declared a U.S. citizen.[7] However, the question as to whether or not he is a citizen from birth cannot be answered by this law because (1) it took effect after his birth and (2) it does not state that the person’s citizenship was acquired at birth, only that they are a citizen by means of the law’s establishment (and, hence, at the time the law takes effect). Indeed, the law in 1936 stated that all persons born to US citizens outside the “limits and jurisdictions of the United States” but the problem is that the Panama Canal Zone was within the limits and jurisdictions of the United States. Thus, the status of Mr. McCain remains unsettled.[8]
..Leaving Ron Paul the only remaining candidate for the Repubs..?
….I’d bet on Ron kicking Hillary’s But !
….is that where you get your chart inspiration ?
Berg argues that Barack Obama was born in Kenya in 1961 to an American woman, Stanley Ann Dunham, and a Kenyan man, Barack Hussein Obama Senior
wonder who in the Republican/Democratic camps would be the first to provide enterainment for us Canadian watchers of U.S. television. I notice that ‘onthebeach’ ( whose posting name suggests kind of a similar setting to grin’s 15:51 toes on the foreground of an Ontario Lake) was off the mark within one minute of Grin’s toe picture because at 15:52 he posted a link about Obama’s unelectability. So now I wait, counting the minutes, until I see a Goldtent posting on behalf of the other party suggesting the unelectability of the presumptive Republican candidate. This is going to be very interesting for us Canadian viewers from a distance. Cheers. Equiz.
“Throughout the 12 months of the crisis, it is difficult to avoid the impression that the Fed is too close to the financial markets and leading financial institutions, and too responsive to their special pleadings, to make the right decisions for the economy as a whole,” Willem Buiter, a former member of the Bank of England’s monetary policy committee, wrote in a paper for the Kansas city Fed’s Jackson Hole conference.
Buiter is now at the London School of Economics.
In his paper, Buiter also examined actions taken by the Bank of England and European Central Bank in the past year. While Buiter concedes that the Fed “has done many things right” in its efforts to expand liquidity, much of his 100-plus page paper read as an indictment of Bernanke and his Fed colleagues.
The Fed “performed worst both as regards macroeconomic stability and as regards one of the two time dimensions of financial stability - minimising the likelihood and severity of future financial crises,” wrote Buiter.
When it comes to dealing with the immediate crisis, the BOE “gets the wooden spoon,” he wrote, while the ECB, “partly as the result of an accident of history, did best as regards putting out fires.”
One of Buiter’s main beefs with Bernanke is that he focused too much on the potential fallout from strains on Wall Street.
Indeed, the credit crunch’s pain on Wall Street seems more severe than in the U.S. as a whole. Economic activity, as measured by gross domestic product, continues to expand and while joblessness has risen, it hasn’t jumped as much as in prior downturns.
Part of that sensitivity comes from the Fed’s role as a banking supervisor. And unlike the BOE and ECB, it doesn’t have an explicit inflation target to guide its monetary policy decisions.
“Cognitive regulatory capture of the Fed by Wall Street resulted in excess sensitivity of the Fed not just to asset prices (the ‘Greenspan-Bernanke put’) but also to the concerns and fears of Wall Street more generally,” Buiter wrote.
“Between the TAF, TSLF, the PDCF, the rescue of Bear Stearns and the opening of the discount window to (Fannie Mae and Freddie Mac), the Fed and the US tax payer have effectively underwritten directly all of the ‘household name’ U.S. banking system…and probably also, indirectly, most of the other large highly leveraged institutions,” he wrote.
The Term Auction Facility, Term Securities Lending Facility and Primary Dealer Credit Facility were aimed at channeling liquidity to strained parts of credit markets. Those moves have been praised in some circles as a creative use of the Fed’s powers. But they are too favorable for primary dealers, Buiter wrote.
Meanwhile, Buiter accused the Fed of overreacting to the economic slowdown through a “remarkable collection of analytic flaws” about the transmission mechanism of monetary policy. “These errors are shared by many (Federal Open Market Committee) members and by senior staff,” he wrote.
Buiter repeatedly singled out Bernanke.
“Although the Bernanke Fed has but a short track record, its too often rather panicky and exaggerated reactions and actions since August 2007 suggest that it also may have a distorted and exaggerated view of the importance of the financial sector for macroeconomic stability,” Buiter wrote.
