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I wrote this in April 2009 about the Federal Reserve’s machinations:
You should note that only the fiscal stimulus required legislative approval. All of the other ’stimulus’ has been done without Congressional approval and largely without Congressional oversight. These activities have been specifically designed to be opaque. The government’s claims of wanting to increase transparency ring [...]

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Here is more of Marc Faber, this time with Stephen Roach joining from Asia. Faber starts things off by making a point I have made many times in the past, namely that the Federal Reserve’s easy money policy is asymmetric; they are quick to cut on the way down, but slow to raise rates on [...]

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In the wake of news about President Obama’s new Too Big to Fail Tax and Barry Ritholtz’s post on it, I had an in-depth conversation on the issue with a whole group of people, including Barry. Most of the group was all for the tax.  I am not, as I recently laid out in an [...]

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On a number of occasions, I have pointed to the sectoral balances model of finance to help demonstrate what happens when the government sector runs a deficit or a surplus. A recent article in the Financial Times by Martin Wolf on Japan’s woes highlights this subject and demonstrates how government deficits balance private sector saving. [...]

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China has been very successful in maintaining GDP growth in the midst of one of the worst global downturns on record.  In 2009, the concern was how an export collapse would trigger slow growth and unemployment. But as 2010 begins, for the Chinese economy, it is overheating and inflation that most are worried about. Chinese [...]

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Federal Reserve Chairman Ben Bernanke recently defended the Federal Reserve’s low-interest rate monetary policy which preceded the housing bubble in the United States. Bernanke instead pointed to a lack of regulatory controls as the major cause of the events which led to a breakdown of the system. Paul Krugman weighed in on the issue, agreeing [...]

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Marshall Auerback here with a commentary on Robert Rubin’s recent Newsweek article on getting the economy back on track.
As we all know, during his tenure as Treasury Secretary, Robert Rubin laid the groundwork for today’s crisis through his aggressive championing of financial deregulation.  Had he at least acknowledged some remorse or recognition of error, he [...]

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I wrote a post yesterday (The Fed’s exit strategy) to explain the mechanics surrounding Monday’s Federal Reserve announcement that it is offering CD accounts to banks. The Federal Reserve does not control the demand for credit and therefore cannot increase aggregate demand by increasing bank reserves.  This is an important point because it colors how [...]

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Randy Wray says:
The Federal Reserve on Monday proposed allowing banks to park their reserves at the central bank, a move aimed at weaning the economy off extraordinary infusions of cash and curbing inflation. The Fed would create the equivalent of a certificate of deposit that pays interest to banks for keeping some of their reserves [...]

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This comes via the FT:
Latvia’s prime minister has warned Swedish banks they risk choking off recovery in the Baltic state’s crisis-hit economy unless they resume lending.
Banks such as Swedbank and SEB, which dominate the Latvian market, have reined in credit as they struggle to contain rising bad loans amid the deepest recession in the European [...]