Comments on: Give the Fed a bit of credit … http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/ Sat, 07 Nov 2009 04:45:11 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Financial Eugenics: The Paulson Plan for Survivor Bias - Finance - http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-128290 Financial Eugenics: The Paulson Plan for Survivor Bias - Finance - Fri, 27 Mar 2009 16:59:47 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-128290 [...] facilities and selectively engineered rescues or forced mergers. That has been very useful, but that well is now dry. The Fed has no more good assets to trade for the bad assets the banks can offer. And the supply of [...] [...] facilities and selectively engineered rescues or forced mergers. That has been very useful, but that well is now dry. The Fed has no more good assets to trade for the bad assets the banks can offer. And the supply of [...]

]]> By: Alan Gervasi http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114877 Alan Gervasi Fri, 10 Oct 2008 07:07:48 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114877 To get people buying should be the goal of all efforts to stabilize the economy... And if it is too expensive for anyone here, then stabilize Asia and allow them to buy our goods. It is an open secret that Asia has been overproducing for some time.... So to get Asia to start buying merely takes making room somewhere for Asia to "dump" is surplus products...! I suggest Hawaii (primarily) for it's relative remoteness and lack of productive capacity (...to be negatively affected by a relatively vast influx of Asian products.) Mainland-America would have to boost tourism-travel to the Islands to take advantage of the "low" prices....! Secondly I suggest Alaska... for the same reasons.... However, I suggest the second position as a spill-over because of it's position on the Continental United States; and, being of the mainland might compromise the "growth" of our own factories. Just a note... or is it just a quirk...? ...That the speech introducing Alaska's Sarah Palin in the Republican Convention was made by Hawaii's Governor Lingle...!!! Hmmm... I wonder...? To get people buying should be the goal of all efforts to stabilize the economy… And if it is too expensive for anyone here, then stabilize Asia and allow them to buy our goods.

It is an open secret that Asia has been overproducing for some time…. So to get Asia to start buying merely takes making room somewhere for Asia to “dump” is surplus products…!

I suggest Hawaii (primarily) for it’s relative remoteness and lack of productive capacity (…to be negatively affected by a relatively vast influx of Asian products.) Mainland-America would have to boost tourism-travel to the Islands to take advantage of the “low” prices….!

Secondly I suggest Alaska… for the same reasons…. However, I suggest the second position as a spill-over because of it’s position on the Continental United States; and, being of the mainland might compromise the “growth” of our own factories.

Just a note… or is it just a quirk…? …That the speech introducing Alaska’s Sarah Palin in the Republican Convention was made by Hawaii’s Governor Lingle…!!!

Hmmm… I wonder…?

]]> By: ReformerRay http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114641 ReformerRay Mon, 06 Oct 2008 22:11:20 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114641 Thanks, Michael Thanks, Michael

]]> By: flow5 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114624 flow5 Mon, 06 Oct 2008 19:12:48 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114624 Explanations: Report lines & T account flows "Modern Money Mechanics" --- Changes in Foreign-Related-Factors: #41 & #38 SWAP LINES Explanations: Report lines & T account flows
“Modern Money Mechanics” — Changes in Foreign-Related-Factors:
#41 & #38 SWAP LINES

]]> By: Wieviel Kredit verdient die FED? - zeitenwende.ch http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114589 Wieviel Kredit verdient die FED? - zeitenwende.ch Mon, 06 Oct 2008 13:41:22 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114589 [...] $ nicht, ist aber schlecht f [...] $ nicht, ist aber schlecht f

]]> By: Soxfan http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114559 Soxfan Mon, 06 Oct 2008 02:43:52 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114559 Does anyone know if the Bailout Bill contained the acceleration of allowing the Fed to pay interest on reserves? I know it was in the version that was originally voted down in the House, but there is no press on this at all this weekend. Paying interest on reserves at the Funds rate would do away with the need for these Treasury supplemental financing bills by allowing the Fed to expand its balance sheet infinitely, without driving rates to zero. Does anyone know if the Bailout Bill contained the acceleration of allowing the Fed to pay interest on reserves? I know it was in the version that was originally voted down in the House, but there is no press on this at all this weekend.

Paying interest on reserves at the Funds rate would do away with the need for these Treasury supplemental financing bills by allowing the Fed to expand its balance sheet infinitely, without driving rates to zero.

]]> By: Michael http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114541 Michael Sun, 05 Oct 2008 22:40:24 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114541 ReformerRay, You've probably already figured this out, but the "math" issue appears to be really about "time." If you write a longish post, then submit, you'll be told your "math" is wrong. It's really not the numbers you add that matter, it's how long between the time you started to write and you submitted. I can understand the value of limiting super-long posts. Yours do not seem excessive, so here's the trick: You write your post first, copy it (Control + C), then add the numbers and submit. If it rejects you ('cause of "math"), go back, paste in your post (Control + V), add the new numbers and submit right away. That'll work. It's up to you to be responsible and not go excessive on length of post. ReformerRay,

You’ve probably already figured this out, but the “math” issue appears to be really about “time.” If you write a longish post, then submit, you’ll be told your “math” is wrong. It’s really not the numbers you add that matter, it’s how long between the time you started to write and you submitted. I can understand the value of limiting super-long posts. Yours do not seem excessive, so here’s the trick: You write your post first, copy it (Control + C), then add the numbers and submit. If it rejects you (’cause of “math”), go back, paste in your post (Control + V), add the new numbers and submit right away. That’ll work. It’s up to you to be responsible and not go excessive on length of post.

]]> By: Howard Richman http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114533 Howard Richman Sun, 05 Oct 2008 19:02:24 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114533 TwoFish wrote: "Right now the short term credit markets have completely broken down. The fact that few people on Main Street notice is because the Fed has pumped hundreds of billions of dollars into the financial system, but they are about to run out." You are incorrect. To quote Milton Friedman, "There is no limit to the extent to which the [a central bank] can increase the money supply if it wishes to do so." ( http://www.hoover.org/publications/digest/3531496.html ) Howard Richman www.tradeandtaxes.blogspot.com TwoFish wrote:

“Right now the short term credit markets have completely broken down. The fact that few people on Main Street notice is because the Fed has pumped hundreds of billions of dollars into the financial system, but they are about to run out.”

You are incorrect. To quote Milton Friedman, “There is no limit to the extent to which the [a central bank] can increase the money supply if it wishes to do so.” ( http://www.hoover.org/publications/digest/3531496.html )

Howard Richman
http://www.tradeandtaxes.blogspot.com

]]> By: Alea | #Links http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114484 Alea | #Links Sat, 04 Oct 2008 22:10:24 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114484 [...] Give the Fed a bit of credit … By my count, the Fed is now providing about $1.25 trillion in liquidity support to the global financial system. [...] [...] Give the Fed a bit of credit … By my count, the Fed is now providing about $1.25 trillion in liquidity support to the global financial system. [...]

]]> By: ReformerRay http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114474 ReformerRay Sat, 04 Oct 2008 19:21:01 +0000 http://blogs.cfr.org/setser/2008/10/02/give-the-fed-a-bit-of-credit/#comment-114474 My local newspaper reports that Ohio State University owns 39.5 million dollars that it cannot access because it is in an account that is frozen. That account is frozen because its trustee was Wachovia bank, which has frozen all its accounts. That is the domino effect Twofish described. Note, however, that OSU is not going out of business. It can wait to see how much of its money it will recover. When the agents at the bottom of the pile - like OSU - can tolerate the delay in settlement, this particular event does not contribute to the panic. Without panic, this mess will unwind as it should unwind, with many parties going out of business. Less players is good. Credit that is more expensive is not good for economic growth but it is the only way to reduce over-reliance on debt. The past system must be destroyed and another, viable system, put in its place. My local newspaper reports that Ohio State University owns 39.5 million dollars that it cannot access because it is in an account that is frozen. That account is frozen because its trustee was Wachovia bank, which has frozen all its accounts.

That is the domino effect Twofish described. Note, however, that OSU is not going out of business. It can wait to see how much of its money it will recover.

When the agents at the bottom of the pile – like OSU – can tolerate the delay in settlement, this particular event does not contribute to the panic.

Without panic, this mess will unwind as it should unwind, with many parties going out of business. Less players is good. Credit that is more expensive is not good for economic growth but it is the only way to reduce over-reliance on debt.

The past system must be destroyed and another, viable system, put in its place.

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