The Federal Reserve: Aging Magician of the Welfare State

Weekly Audit: Republicans Poised to Declare War on Welfare State
Senate Republicans scuttled a Bipartisan $1.2 Trillion dollar spending Omnibus Bill last week. Now, Majority Leader Harry Reid (D-NV) is scrambling to pass a temporary funding bill to keep the Federal Government’s lights on. The GOP abruptly pulled the plug on the omnibus, a massive piece of Legislation that Republicans and Democrats had collaborated on for months. Why? Because the Republicans want to start over in the next session of Congress when they will control the House and pick up...

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 ...

Obama takes victory lap, attributes legislative wins to bipartisanship and his own persistence (Daily Caller)
President Obama touted a series of accomplishments over the six week Lame Duck session of Congress at a brief White House Press Conference Wednesday afternoon before he jetted off to Hawaii to join his wife and daughters for the Christmas holiday. While he paid tribute to Bipartisan cooperation over the past few weeks, Obama said his own tenacity was a big part of why he was able to get movement on a number of different issues such as Tax Rates, Gays in the Military and a nuclear arms reductio...

Executive pay
The Federal Government used its Bailout of Corporate America through the Troubled Asset Relief Program to gain leverage over Executive Compensation. Salaries and bonuses were subject to review by a White House "pay czar" who could pressure companies receiving government aid into modifying unacceptable pay packages. Now, Washington has a more powerful tool through the Dodd-Frank financial overhaul passed this year, which gives federal Regulators power to set guidelines on executive pay. The Fed...

A Couple Thoughts About the Census
The Census Bureau released the results of the 2010 ennumeration and, from a political point of view, the GOP have to be pretty happy about the direction in which the population is moving. Seven states that voted Republican in the past three Presidential Election picked up House seats and five that did not lost seats. The biggest winner in that regard was Texas, which picked up four House seats. As Ed Morrissey notes, the big GOP gains will be important in next year’s reapportionment fights...

House passes bill to evaluate government spending on heels of two reports
The House cleared Legislation Tuesday that will require federal agencies to identify overlapping programs and do quarterly evaluations of Government Spending. The House Blue Dog Coalition touted passed of the measure as part of its blueprint to improve government accountability and reduce waste in Government Spending.  Rep. Henry Cuellar (D-Texas) led the House charge on the bill while several Democrats Sens. Tom Carper (Del.), Mark Warner (Va.) and Daniel Akaka (Hawaii) urged passage of the ...

Money and Marbles
Jim Hamilton: Econbrowser: Velocity of money: I wanted to follow up on Menzie's recent observations about what's been happening to the supply and demand for money. These discussions are sometimes conducted in terms of the following equation: MV = PY. Here M is a measure of the Money Supply, V its velocity, and nominal GDP is written as the product of the overall price level (P) with real GDP (Y). We have direct measurements on nominal GDP. And once we agree on a definition of the money supply ...

Is the End Game of Wikileaks Internet Censorship?
”. In this article, Engdahl implies that Wikileaks is a US government-run Propaganda and disinformation operation with an end goal of restricting freedoms on the Internet. Here are some of the key excerpts from this article. "A closer look at the details of what has so far been carefully leaked by the most ultra-establishment of international media such as the New York Times reveals a clear agenda. That agenda coincidentally serves to buttress the agenda of US geopolitics around the world ...

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, ...

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...

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...

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...

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...

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
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...

Ignorance Is Bliss: The Matty Edition...
People occasionally email me asking why I continue to rag on Matthew Yglesias. It's hard to answer that question in a civil tone, simply because the "why" should be blindingly obvious to anyone with the I.Q. of a potted plant. Here's a perfect example of what I mean: When it comes to wages, the basic story of recent decades is redolent of Scrooge. Real average hourly earnings (excluding fringe benefits) now stand roughly at 1974 levels. Yes, that’s right, no real increase...

China may try new ways to manage bank credit
Beijing | Tue Dec 21, 2010 8:58am EST Beijing (Reuters) - China's Central Bank is considering changing a key component of its Monetary Policy management by altering the way it manages bank credit, three sources close to the matter told Reuters on Tuesday. Under the proposed changes, the People's Bank of China (PBOC) may judge how much a bank can lend by looking at its capital adequacy ratio, Liquidity conditions and provisions for bad loans. That means the PBOC may set different deposit reser...

FOMC statement: Federal Reserve, European Central Bank, Bank of Japan, Bank of Canada, Bank of England, and Swiss National Bank
The Federal Open Market Committee has authorized an extension through August 1, 2011, of its temporary U.S. dollar Liquidity swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Bank of Japan, and the Swiss National Bank. The swap arrangements, established in May 2010, had been authorized through January 2011. ...

Dean Baker takes a look at the stimulus that isn't there
In the Guardian, Dean Baker warns that the US business press is engaging in some irrational exuberance over the Obama/GOP tax deal, seeing it as a massive stimulus that will make for a strong recovery next year. There seems to be little doubt that Obama sees it that way, too. Or at least he seems to be confidently talking that way--though Baker doesn't talk about him specifically. What he does talk about is that the vast majority of the tax deal merely continues existing law, and such doesn't ...

Reaactions to Obama and GOP Tax-Cut Deal
Who would have thought that our first black president could be brought down by Democrats? Unless there is a real attitude adjustment in the Democratic Party before 2012—a greater respect for the president’s ability to reach Compromises with very hostile adversaries—Obama’s own party will probably prevent him from getting a Second Term. If President Obama wanted to accomplish anything, he had to compromise. It seems that many Democrats would rather have a political civil...

Food safety bill passes Congress
WASHINGTON…The House on Tuesday gave final approval to a landmark Food Safety bill designed to bring an archaic system for protecting the nation's food supply into the 21st century and equip the Food and Drug Administration with the tools needed to monitor a complex supply chain that stretches around the world. And President Obama was scheduled to sign the measure into law almost immediately. But the historic effort may run into trouble next year over an old problem -- money. The current ...

First POMO Of The Day Closes, Brings Fed's Treasury Debt Holdings To $999 Billion
, auctioned off less than a month ago, meaning the Primary Dealers continue to flip bonds from auction straight back to the Fed, making a few million in the process each and every time. And while not even POMO matters anymore, in a market entirely dominated by Delta, i.e., Goldman (even Joe Kernen earlier announced on live TV that "Goldman can do whatever it wants in the futures market."), trades, and where the cumulative TICK is now progressively negative, the only thing that may be of relevanc...

Top global news stories of 2010
In an exclusive global analysis performed by the Global Language Monitor, the top news stories of 2010 are the South African World Cup, the iPad launch, the rise of China, U.S. Healthcare Reform, and Wikileaks. The Tea Party movement, the fall of Obama, the Gulf Oil Spill, Haitian Earthquake, and the political anger and rage witnessed in the major western economies, followed. The list is notable for two firsts: the first time a sporting event tops the list and the first time a product launch c...