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Browsing Category
Monetary System
Capital One buys Chevy Chase Bank: Another bailout freebie
I wrote a few weeks back about how your bailout money was being used for mergers and acquisitions to line bankers' pockets instead of for making loans to desperate homeowners. After receiving $25 billion in bailout funds, Citigroup…
Chart of the day: Excess Reserves
One feature that is peculiar to the present downturn is the accumulation of reserves at the U.S. Federal Reserve. I imagine it is no different at other central banks, though I have not seen the data. Let me tell you what this reserve…
Roubini: How to avoid the horrors of ‘stag-deflation’
The US and the global economy are at risk of a severe stag-deflation, a deadly combination of economic stagnation/recession and deflation. Only very aggressive and co-ordinated policy actions will ensure the global economy recovers in 2010…
Pushing on a string and similar notions on monetary policy ineffectiveness
As interest rates in the developed economies approach the zero bound, we must begin to ask ourselves how effective monetary policy can reasonably be in these circumstances. And if policy is to be effective, which policy tools will be most…
A note on Japan’s experiment with quantitative easing
Japan’s policy makers generally procrastinated considerably in terms of implementing any kind of stimulative measures, as well as prematurely reversing the benign impact of policies which had some earlier success. In terms of monetary…
Meredith Whitney: more bearish than ever, but…
Last night, in an e-mail Yves Smith of naked capitalism pointed out an Op-Ed piece by Meredith Whitney which ran in the Financial Times yesterday. It was a fairly somber and downbeat assessment from an analyst who has proved right on the…
Quantitative easing: printing money like mad to ward off deflation
In economic circles, there has been a lot of buzz about Quantitative Easing of late. Basically, the U.S. Federal Reserve has lowered interest rates to near zero percent and the fear is that these cuts will not have enough effect on the…
JPMorgan Chase: Large exposure to real economy downturn
The financial services sector has been the hardest hit sector in the credit crisis so far. Banks with large exposures to mortgage-backed securities like Citigroup, UBS and Merrill Lynch have suffered the most. This is largely because the…
Stephen Roach: Americans’ abandonment of overconsumption is a good thing
Stephen Roach must feel a certain sense of Schadenfreude because he has been warning since the end of the Technology Bubble that U.S. monetary policy was reckless and would end in a very bad way. The bubble reached heights few anticipated,…
Quote of the day: Willem Buiter – Tits on a bull
Willem Buiter has a very useful and provocative blog at the Financial Times website called Mavercon. The Dutch-born former Bank of England MPC member is not afraid to take policy makers to task or call a spade a spade.
In his latest post…