New job
A small announcement: Last week I started a new job, as a fellow in Geoeconomics at the Council on Foreign Relations.
At least in the near-term, this is a much bigger change for me than for readers of this blog. For the time being, nothing much is going to change. I will still be blogging on the RGE site as an external contributor.
My interests also haven't changed: I still intend to focus on the dollar, central bank reserves, sovereign wealth funds and the political consequences (if any) of the United States now substantial dependence on the governments of other states for financing.
If anyone wants to quote me, though, I am sure the Council would be happier if I was identified as a CFR fellow rather than a senior economist at RGEMonitor. At least so long as I don't say anything too embarassing.
First to say Congratulations Brad!
No wonder Nouriel Roubini is soliciting contributors in his blog for a New Asian EconoMonitor.
Congratulations Brad!
We all will miss you, not only Nouriel!
I expect you’ll post here often enough to keep us interested in global economics.
Have a very good start. You deserve the best!
Keep your roots, your fine work and patience in CFR!
Hi Brad,
Congratulations! Think we all hope to be still able to see your posts regularly.
All the best!
Congratulations - but back to work -
Interesting point from Bernanke’s speech tonight on the role of European banks in the Fed’s recent liquidity provision actions:
” The Federal Reserve’s initial action was to increase liquidity in short-term money markets through larger open market operations–the standard means by which it seeks to ensure that the federal funds rate stays at or near the target rate set by the Federal Open Market Committee (FOMC). A number of other central banks took similar steps. One source of pressure in the overnight market was the demand for dollar funding by European banks to which I alluded earlier. As Europe is in the latter part of its trading day when U.S. markets open, this extra demand for dollars at times led the federal funds rate to open well above the target. The extra provision of liquidity by the Fed helped counter the resulting pressure on the funds rate early in the day; it also eased banks’ concerns about the availability of funding and thus assisted the functioning of the interbank market.”
The Bernanke speech is an excellent technical overview of the Fed’s operations recently. I highly recommend it.
http://www.federalreserve.gov/newsevents/speech/bernanke20071015a.htm
Brad played an essential role in the success of the RGE Monitor, not just in his role as an excellent blogger, but much more importantly in a variety of editorial, research and supervisory roles of the editorial staff at RGE. We will thus sorely miss him; but we wish him the best in his new role at CFR. Brad: thanks so much for all the hard work and great help in making RGE successful. Nouriel
congrats, you’ll be back in treasury soon
cheers!
Congrats Brad!
China Citic Bids for Bear Stearns Stake
China Citic Group, an investment arm of the nation’s cabinet, is bidding for a stake in Bear Stearns Cos., a senior government official said.
Beijing-based Citic Group is among Chinese financial institutions seeking to accelerate expansion abroad by making acquisitions, Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission, said at the party congress in Beijing today. He didn’t give any details.
Gratulations! Remember to keep blogging, interesting read.
Best wishes for success in the new job!
Your good sense, keen observation and thoughtful analysis are finally getting the recognition they merit by those in the corridors of power.
Of course, the Establishment could just be trying to buy you off . . . Nah!
I’d like to join the chorus congratulating you on the new role, wishing you well for the future, and selfishly hoping that you continue to blog in this space with reasonable frequency!
Congratulations from me too. I hope that you will continue discussion here, and that our best arguments can influence what you write in some small way. In my opinion, the US can use some new economic policy ideas!
Why the dramatic U-turn by the Fed on interest rates last August
http://www.atimes.com/atimes/Global_Economy/IJ17Dj03.html
Who had Bernanke’s ear and attention during this period? Here’s a hint: if your net worth was under $100 million or so, or you were representing interests of under $1 billion or so, you probably were going to be put on hold.
Late in the day of August 8, a little over 24 hours following the Fed’s stand pat decision of August 7, Bernanke took a call from the former Clinton era treasury secretary and current director and chairman of the executive committee of Citigroup, Robert Rubin, the man whose picture encyclopedias should probably use to illustrate the entry for “the establishment”.
The phone logs do not indicate the nature or specifics of the conversation, but it is reasonable to assume that Rubin was telling Bernanke that actual conditions out there in the markets were not nearly as rubicund as the previous day’s chipper post-meeting statement indicated.
Sure enough, the next day, August 9, the Dow Jones Industrials opened down 230 points.
“Ring!” “Hello, Chairman Bernanke’s office.”
August 9 was the day that the rest of the tag team went to work At 11am, in walked into Bernanke’s office none other than Lewis Raineri, the man who, when working as a bond trader at Salomon Brothers (now folded into, yes, Robert Rubin’s Citigroup) in the early 1980s is credited with the actual creation of the mortgage backed securities market now at the core of the subprime mess. More recently, Raineri had founded the Hyperion group of private equity hedge funds; it is entirely reasonable to assume that Hyperion then had more than a few of those endangered subprime collateralized debt obligations dragging down its ledger books.
And still they kept coming. At 2pm, Raymond Dalio, head of Bridgewater Associates, the fourth largest US hedge fund, along with other hedge fund honchos, met with Bernanke looking for a bailout.
Strategic importance of Myanmar to China and the United States
http://www.atimes.com/atimes/Southeast_Asia/IJ17Ae01.html
As is often the case these days, from Darfur to Caracas to Yangon, the rallying call of Washington for democracy ought to be taken with a large grain of salt.
A relevant question is why the US government has such a keen interest in fostering regime change in Myanmar at this juncture. We can dismiss rather quickly the idea that it has genuine concern for democracy, justice, human rights for the oppressed population there. Iraq and Afghanistan are sufficient testimony to the fact Washington’s paean to democacy is propaganda cover for another agenda.
The question is, what would lead to such engagement in such a remote place as Myanmar?
Geopolitical control seems to be the answer - control ultimately of the strategic sea lanes from the Persian Gulf to the South China Sea. The coastline of Myanmar provides naval access in the proximity of one of the world’s most strategic water passages, the Strait of Malacca, the narrow ship passage between Malaysia and Indonesia.
The Strait of Malacca, linking the Indian and Pacific Oceans, is the shortest sea route between the Persian Gulf and China. It is the key chokepoint in Asia. More than 80% of all China’s oil imports are shipped by tankers passing the Malacca Strait. The narrowest point is the Phillips Channel in the Singapore Strait, only 1.5 miles wide at its narrowest. Each day, more than 12 million barrels in oil supertankers pass through this narrow passage, most en route to the world’s fastest-growing energy market, China, or to Japan.
If the strait were closed, nearly half of the world’s tanker fleet would be required to sail further. Closure would immediately raise freight rates worldwide. More than 50,000 vessels per year transit the Strait of Malacca. The region from Maynmar to Banda Aceh in Indonesia is fast becoming one of the world’s most strategic chokepoints. Who controls those waters controls China’s energy supplies.
Congratulations!
At Stanford University on Saturday, Gen. John Abizaid (Ret.), the former CENTCOM Commander, said that “of course” the Iraq war is “about oil”:
http://thinkprogress.org/2007/10/15/abizaid-middle-east-gas-station/
“Of course it’s about oil, we can’t really deny that,” Abizaid said of the Iraq campaign early on in the talk.
“We’ve treated the Arab world as a collection of big gas stations,” the retired general said. “Our message to them is: Guys, keep your pumps open, prices low, be nice to the Israelis and you can do whatever you want out back. Osama and 9/11 is the distilled essence that represents everything going on out back.”
Abizaid has previously argued that the U.S. would need “to keep a long-term military presence in Iraq” in order to protect “the free flow of goods and resources” such as oil, but his Stanford comments go much further in pinning oil as a prime motivator for the war.
Congratulations Brad!
Brad - Been an avid reader for a while now, but never posted. I am an equity analyst at a hedge fund. Just wanted to say your notes and commentary are excellent. I enjoy catching you on CNBC every now and then too. Best of luck at the CFR; looks like a great hire for them.
thanks for all the kind words, and especially to Nouriel.
back to work though - this morning’s TIC data release (for August) is rather interesting. the trade deficit didn’t fall quite as fast as net capital flows …
It looks like a lot of what is called “financial globalization” hinged on US banks offering backstop lines to their sponsored entities in London to buy US debt; or something. Foreign demand for US corporate debt has absolutely disappeared (it was low in July and negative in August).
Abizaid, like many generals, is not distinguished for his brains. Generals exist to execute policy not make it and I doubt he really knows why the US went to war. It could not have been for oil since oil production from Iraq has declined after each of the two wars we have waged against it. If the US wanted more oil from Iraq it would have cozied up to Saddam, offered to help him expand his oil production, etc. Mearsheimer and Walt explain this very well in their book on pp. 142-146. The US went to war with Iraq, in spite of the damage it would do to oil production, to please the Neocons and Israel that have a lock hold over US Middle East policy. As M&W argue in their seminal book: what is the Israel Lobby for? It exists to pressure the US to do things contrary to its real interests. And because of its power it can succeed in this.
Brad,
Congratulations on the CFR job! I’m a regular reader of your analysis and commentary and have found your work to be an invaluable source for understanding the intricacies of reserves, capital flows and currencies. I hope you’re able to keep up the great blogging, but either way, best of luck with the new job!
Mazel tov on your new job!
A few lines from Louise Brooks’ Lulu in Hollywood that I just came across and thought you may well find amusing:
“After we moved to Wichita, however, I studied dancing at the Wichita College of Music, with Alice Campbell, who also taught elocution, a fancy exercise in speech which permitted her - she was from Kansas City, Missouri - to express her disdain for the entire state of Kansas (I later learned that every state in the Union, with the exception of Nebraska, felt disdain for Kansas.)”
http://tinyurl.com/2gzlae
We look forward to your participation, and your presence at Bohemian Grove. We need new young blood.
Congratulations!
koteli — sorry, i took down your recent long post. i didn’t think it was appropriate to continue your past disagreement with joshua here.
I didn’t take offense at his comments about kansas.
the rest of the US may look down on us, but — frankly, who cares? they also have never visited …
and truth be told, kansas isn’t perfect, except for growing winter wheat. and who knows for how long.
sometimes the best part of judgment is not taking up an argument — and your comment veered into territory that consistently generates more heat than light.
sorry.
Hi Brad,
I am coming in a bit late but I just wanted to add to congrats. The CFR is lucky to have you on board.
I am happy to hear that this blog will continue or should I say that YOU will continue to blog. I know that we are many who appreciate this.
Things are getting interesting now with the recent reading on US inflows. The question would of course be, where are all those money going then? I.e. if they are not financing the US where the heck are they going?
Keep up the good work
best
Claus
Sorry, again, brad.
I accept without complain your reasons. And for first time, I won’t complain about censoring, for I know I was a using your blog give an answer to a liar in an oportunist way.
I’ll catch him sooner o later, and sorry, again, for getting too hot.
PS: Villarriba-Villabajo, is a general play anywhere. It’s a joke.
Anyway, Joshua would like (it he has come ear or taste) the song “As Falls Wichita, So Falls Wichita Falls”, by Pat Metheny, don’t you think?
I’ve been a loyal reader, but not poster, for several years, and I just had to say how much I’ve appreciated having intelligent analysis on difficult topics, on a regular basis. I just can’t get it anywhere else, so please stay active here. Many, many thanks.
Brad,
I have been an avid reader of your blog.
Anyway, I would like to extend my best wishes to you in your new role.
Keep blogging!
hi, I would like to know more about this I’m an chinese writer who love to read international literature.feel free to contact
HiBe wishes。Allow me to offer my heartiest wishes. The best of luck! Best wishes! Best regards!
Just because someone doesn’t‘t love you the way you want them to, doesn’t‘t mean
they don‘t love you with all they have.
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A belated congrats Brad. The new job is a well deserved one and I’m sure you’ll do the CFR a world of good in this new position.