Ignorance Is Bliss: The Matty Edition...

Krugman asks the question
Fresh from presenting a FIFTH Neo-Keynesian definition of Inflation in the form of "core inflation", Paul Krugman finally begins to pay attention to the actual issue at hand: I’d like to highlight one aspect of this discussion that has been striking me: the conservative focus on the evils of increasing the Money Supply. You hear it all the time: the Fed is printing money! Danger, Will Robinson! In some comments on this blog I see assertions that the true measure of Inflation isn’t prices, ...

Summary Box: Treasury flat in light trading
LIGHT TRADING: Treasurys traded in a tight range Tuesday. The 10-year note rose 34.3 cents for every $100 invested. That lowered the yield to 3.30 percent from 3.35 late Monday. MORE FED BUYING: The Fed bought $9.4 billion in Treasurys, including $1.61 billion in Inflation-indexed notes. The purchases are part of the Central Bank's $600 billion bond-buying program aimed at lowering long-term Interest Rates. FIGHTING THE FED: Yields have been rising steadily since early November, even after the...

Frustration Builds Over High Food Prices In China
Students at the No. 2 High School in Liupanshui City of southwestern China's Guizhou province had endured rising living expenses for months. But on November 22, after a new round of food price increase — though a relatively minor one of no more than 50 cents per meal — they had had enough. More than 1,000 students gathered in school canteen, smashing windows and vandalizing the cafeteria facilities. The event in Guizhou underscores a broader discontent over rising Inflation across C...

Third-quarter growth revised up to 2.6 percent
WASHINGTON | Wed Dec 22, 2010 9:12am EST WASHINGTON (Reuters) - Economic growth was a touch higher than previously estimated in the Third Quarter, but below expectations as a rise in the pace of inventory accumulation was offset by downward revisions to Consumer Spending, a government report showed on Wednesday. Gross domestic product growth was revised up to an annualized rate of 2.6 percent from 2.5 percent, the Commerce Department said. Economists had expected GDP growth, which measures to...

Third-quarter growth revised up to 2.6 percent
WASHINGTON | Wed Dec 22, 2010 8:38am EST WASHINGTON (Reuters) - Economic growth was a touch higher than previously estimated in the Third Quarter, but below expectations as a rise in the pace of inventory accumulation was offset by downward revisions to Consumer Spending, a government report showed on Wednesday. Gross domestic product growth was revised up to an annualized rate of 2.6 percent from 2.5 percent, the Commerce Department said. Economists had expected GDP growth, which measures to...

Ron Paul vs. the Federal Reserve
Having recently been named head of the House subcommittee on domestic Monetary Policy, Ron Paul is looking forward to the chance to butt heads with the Federal Reserve, a longtime object of his scorn. The Texas congressman, who last year wrote the book End the Fed, fundamentally disagrees with the power that the system has over the value of paper money. "What I'm really asking for is competition, to get rid of the monopoly power of the Fed, because they don't have legitimate power to do what the...

WHO IS ALICIA MUNNELL? AND WHY IS SHE DRAWING FIRE?
Presidential nominations to the Federal Reserve Board are normally humdrum affairs. In fact, Congress hasn't rejected a central-bank nominee in more than eight decades. But this is the Clinton White House, which seems unable to fill any job easily. And that creates uncertainty for the Clintonites' expected choice for a Fed opening: Alicia H. Munnell. Munnell, Assistant Treasury Secretary for Economic Policy, hasn't yet been formally nominated to replace Governor John P. LaWare. But Senate Republ...

Extended Fed Currency Swaps Not Sign of Fresh Concern
By Michael S. Derby The Federal Reserve ’s extension of it currency swap arrangements with other major Central Bank reflects continued unease around the state of European Financial Markets. That said, the decision to maintain the swap lines with the Bank of Canada , Bank of England , the European Central Bank , the Bank of Japan and Swiss National Bank , should be viewed more as a protective action on the part of American officials. It is not, most Economists reckon, a sign that some new ...

Fed throws euro banks a lifeline
For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which the Fed provides foreign central Bankers with essentially unlimited stocks of doll...

The Federal Reserve: Aging Magician of the Welfare State
December Currency deposits__ supply_          growth rate        increase__              2005                       728.9              3,233.3 ...

Fed Extends Currency Swap Lines Over Eurobank Dollar Funding Concerns
The party line is everything is fine in bank land….even Eurobank land. But some recent developments suggest otherwise. The business news on Europe has pretty much daily updates on the unfolding and linked Sovereign Debt/ bank solvency crisis. The officialdom insists this looming problem can be resolved but most observers think it can’t be in the absence of a fiscal union, which is a political bridge too Far Right now. In a not-widely-noticed replay of pre-crisis conditions, the co...

Fed throws euro banks a lifeline
Fed throws euro banks a lifeline Posted by Colin Barr December 21, 2010 4:19 pm For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which...

US Fed extends dollar lifeline for central banks
The US Federal Reserve on Tuesday extended until August an emergency tool for other Central Banks to access US dollars, amid market jitters and high demand for the safe haven greenback. The deal, which had been due to expire in January, allows the Central Banks of Britain, Japan, Canada and Switzerland, as well as the European Central Bank, to exchange local currency for US dollars. The swap agreements were sealed in May, but as a Debt crisis and slow Economic Recovery continues to roil markets ...

Fed throws euro banks a lifeline
For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which the Fed provides foreign central Bankers with essentially unlimited stocks of doll...

63310
The summit of Europe's heads of government is over, yet the continent's problems remain. After intense negotiations in Brussels, tough decisions on the future of the European currency have been postponed again. Horace's sneer "parturient montes, nascetur ridiculus mus" ("mountains will be in labour, and an absurd mouse will be born") comes to mind. What was agreed in Brussels is a collection of technicalities: a vague amendment of the European Treaties to establish a permanent rescue mechanism f...

Feds Bullard: Full of Self-Contradictions
James Bullard, President of the Federal Reserve Bank of St. Louis was on CNBC Monday, December 20, 2010 mostly defending the Fed’s Controversial $600 billion Treasury purchasing program (QE2) announced in Nov. What struck me as totally self-contradictory were Bullard’s statements regarding the QE2, treasury yield, Inflation expectations, and inflation, which I will outline and rebuff below. Bullard – Higher Treasury Yield = QE2 Success During the interview, aside from the ...

Major indexes poised for double-digit gains for the year
U.S. stocks rose modestly Tuesday but managed to close at their highest levels in more than two years as investors set their sights on 2011. The Dow Jones industrial average rose 55 points, or 0.5%, led by gains in shares of American Express, Bank of America and JPMorgan Chase. The blue chip index finished at 11,533, its highest level since August 29, 2008. The S&P 500 added 8 points, or 0.6%, with Adobe and Jabil Circuit among the biggest winners. The broader index closed at its highest lev...

Tonight Im gonna party like its Oct 2007
Coincident with a 6% rally thus far in Dec and joining almost every single Strategist on Wall St that is Bullish for 2011, Investors Intelligence said the number of Bullish newsletter writers has reached its highest level since mid Oct ’07, 1 week after the S&P 500 had its all time record high close of 1565. Bulls rose 2 pts to 58.8 (got as high as 62 in Oct ’07) while Bears were little changed at 20.6 (got as low as 19.6 in Oct ’07). The bulls can be right for a period ...

Congressman Paul Says Fed Transparency Is His Goal
WASHINGTON (Reuters) - Republican Congressman Ron Paul, the new head of the subcommittee that oversees the Federal Reserve, said on Sunday he will seek greater transparency but will not be sending Subpoenas to the Central Bank chairman from Day One. Paul, a longtime critic of the Fed, will be the new chairman of the domestic Monetary Policy subcommittee of the House Financial Services Committee when the new Congress is seated in January. "Now that doesn't mean that the first week in January I...

Hedge funds may skirt direct Fed scrutiny: source
By Rachelle Younglai and Dave Clarke WASHINGTON | Mon Dec 20, 2010 3:00pm EST WASHINGTON (Reuters) - The Federal Reserve does not believe any one Hedge Fund can topple the Financial System and therefore the private pools of capital may escape direct supervision by the Central Bank, an industry source familiar with the Fed's position said. The newly created Financial Stability Oversight Council, which includes the Treasury Secretary and 14 U.S. supervisors, including the Fed, are in the early ...

Hedge funds may skirt direct Fed scrutiny: source
WASHINGTON (Reuters) - The Federal Reserve does not believe any one Hedge Fund can topple the Financial System and therefore the private pools of capital may escape direct supervision by the Central Bank, an industry source familiar with the Fed's position said. The newly created Financial Stability Oversight Council, which includes the Treasury Secretary and 14 U.S. supervisors, including the Fed, are in the early stages of determining which non-bank firms pose a threat to the financial system....

EURO GOVT-Bund yields at record lows, peripherals lag
Fri Aug 20, 2010 9:02am EDT * Bund yields at record lows as U.S. growth fears rise * ECB Weber's Liquidity comments boost Bunds, Euribor * U.S. Treasuries favoured over Bunds * Peripheral euro Debt spreads seen wider By George Matlock London, Aug 20 (Reuters) - Longer-dated German Government Bond yields marked record lows on Friday, chasing buoyant U.S. Treasury prices after an ECB rate-setter's comments on extending funding to banks fuelled concerns about the pace of the global recovery. Aft...

Special Report: Inside AIG's Tortuous Turnaround
NEW YORK/WASHINGTON (Reuters) - During a rainstorm in Washington in early 2009, amid the furor over Wall Street's post-bailout bonuses, an American International Group employee pulled out an umbrella that had the insurer's name on it. "Somebody came by, grabbed the umbrella and broke it," said AIG Chief Executive Robert Benmosche, who added that the attacker told the employee to engage in a sexual act impossible to perform on oneself. The anger over AIG's $182.3 billion Taxpayer-funded bailou...

Fed Increases its Treasury Security Purchase Limit to 70%
When the Federal Reserve decided to execute a new course of Monetary Policy in November, it had a problem. It wanted to buy more longer-term Treasury securities, but it was already nearing its concentration limit for the amount of each specific Treasury Security it could hold. But since the rule was self-imposed, it lifted the limit, effectively doubling the amount it can purchase of any given Treasury Security issue. This is a pretty big change. The Central Bank had temporarily relaxed its 35 ...

Japan's export growth accelerates
Exports grew by 9.1% compared with a year earlier, the finance ministry said, compared with 7.8% in October. However, analysts remain concerned about the strength of Japan's economy. Also on Wednesday, the government forecast Economic Growth of 1.5% next year, a sharp fall on the 3.1% it predicts for this year. It also forecast that consumer prices will stop falling - they have been on a downward spiral for 20 consecutive months. However, this would not mean the battle against Deflation is ...