Inflation was unchanged from the previous month in September, bringing the annual rate of inflation down to 4.9%. While the inflation rate is still elevated, the drop in oil and commodity prices combined with lower consumer spending is likely to bring this rate down even further in 2009.The continued decrease in inflation highlights how [...]

Marshall Auerback here:
I am somewhat simplistic about this, but if the issue is one of a drive for dollar liquidity, the Fed should be able to address that problem. Before the week ending September 17th, the Fed was not, in fact, flooding the system with liquidity. The Fed was instead swapping their holdings of [...]

Ben Bernanke and Alan Greenspan have been the worst monetary stewards in U.S. Federal Reserve history. A former Fed Chairman William McChesney Martin Jr. once said it was the Fed’s job “to take away the punch bowl just as the party gets going.” Alan Greenspan and Ben Bernanke, with their easy money polices, [...]

Artificially low interest rates are what got us into this mess. Why should we think that they will help us get out? That’s the question I ask myself and Marc Faber, otherwise known as Dr. Doom, answers that they won’t.
They certainly didn’t work under Greenspan. In fact it was the 1% Fed [...]

In July, I made my ten predictions for the markets and global economy for the rest of the year. Some of my predictions were pretty pedestrians, and some were fairly bold. Let’s take a look and see how I’m doing.
Here’s what I originally said:

Oil prices will dip below $100 before year-end. Let’s [...]

The Federal Reserve, the Bank of England and the European Central Bank led a coordinated rate cut effort as the official response to the biggest financial crisis since the Great Depression gathers steam. The official response in Europe and the U.S. has really stepped up. The U.S. central bank intervening in the Commercial paper [...]

Richard Fisher of the Dallas Fed shows that some of the Fed Presidents get it. He is now on record for saying that interest rate cuts won’t solve America’s credit crisis problems. In fact, interest rate cuts will make them much worse. If only Greenspan had felt this way, we wouldn’t be [...]

As Hank Paulson looks to push through his Economic Patriot Act, it bears remembering that just a few months ago he saw Covered Bonds as a potential solution to U.S. problems with declining home prices.
They are not the solution. This market is now cratering and is having it’s worst month since 1999. Covered [...]

I named my blog “Credit Writedowns” because I anticipated an historic wave of credit writedowns in the global banking system which would lead to a wave of deleveraging, systemic risk, and bank failures — in short, a massive financial and economic bust to rival the Great Depression.
Up until now I have masked this dire [...]

At 9:00 PM EDT, the Federal Reserve posted a statement on its website that it has decided to offer AIG an $85 billion line of credit at a penalty rate in return for all of AIG as collateral. In addition, the Federal Reserve will receive an equity interest of 79.9% of the company. [...]