BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Tell-Tale Stat: Fed Paid $78.4 Billion to U.S. Treasury in 2010]]>http://www.bloggingstocks.com/2011/01/21/tell-tale-stat-fed-paid-78-4-billion-to-u-s-treasury-in-2010/http://www.bloggingstocks.com/2011/01/21/tell-tale-stat-fed-paid-78-4-billion-to-u-s-treasury-in-2010/http://www.bloggingstocks.com/2011/01/21/tell-tale-stat-fed-paid-78-4-billion-to-u-s-treasury-in-2010/#commentsFiled under: ,

One economic data point that sort of slipped under the radar recently concerned the U.S. Federal Reserve's $78.4 billion payment to the U.S. Treasury in 2010, up about 65% from $47.4 billion in 2009.

And the reason for the revenue surge? Experienced investors or others who have reviewed the Fed's report will realize that much of it stems from income from the Fed's purchase of mortgage securities and Treasury securities in connection with the quantitative easing, part 2 program, or QE2.

Under QE2, the Fed will purchase up to $600 billion in assets from November 2010 to June 2011 -- this coming after the Fed purchased $1.7 trillion in assets through March 2010.

Continue reading Tell-Tale Stat: Fed Paid $78.4 Billion to U.S. Treasury in 2010

Tell-Tale Stat: Fed Paid $78.4 Billion to U.S. Treasury in 2010 originally appeared on BloggingStocks on Fri, 21 Jan 2011 15:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>BernankefeaturedFederal Reserveinthenewsmonetary policyQE2quantitative easingUS TreasuryFri, 21 Jan 2011 15:00:00 EST<![CDATA[Martin Wolf: To Cut Debt We Must Borrow More]]>http://www.bloggingstocks.com/2010/09/29/martin-wolf-to-cut-debt-we-must-borrow-more/http://www.bloggingstocks.com/2010/09/29/martin-wolf-to-cut-debt-we-must-borrow-more/http://www.bloggingstocks.com/2010/09/29/martin-wolf-to-cut-debt-we-must-borrow-more/#commentsFiled under: ,

moneyFinancial Times columnist and economist Martin Wolf forwards the paradoxical, but nevertheless economically valid theory that "we can only cut debt by borrowing more."

Economic conservatives, including supply-side economics advocates and Tea Party backers, will no-doubt look aghast at the above, but investors should keep in mind that most of the conservative camp has shown concern primarily for: 1) cutting taxes and 2) cutting government spending -- not for the plight of the more than 15 million Americans without work. Now, if in the process of cutting taxes and spending U.S. unemployment goes to 15% or 20% -- which would likely be the consequence of spending cuts that reduce already low aggregate demand further -- so be it. In other words, if the free market says unemployment should be that high, then unemployment will rise. Just cut taxes and cut spending.

Continue reading Martin Wolf: To Cut Debt We Must Borrow More

Martin Wolf: To Cut Debt We Must Borrow More originally appeared on BloggingStocks on Wed, 29 Sep 2010 11:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>debtfeaturedfiscal policyGDPinthenewsMartin Wolfmonetary policyWed, 29 Sep 2010 11:00:00 EST<![CDATA[The Fed Decision: Not the Time to Take Chances!]]>http://www.bloggingstocks.com/2010/06/23/the-fed-decision-not-the-time-to-take-chances/http://www.bloggingstocks.com/2010/06/23/the-fed-decision-not-the-time-to-take-chances/http://www.bloggingstocks.com/2010/06/23/the-fed-decision-not-the-time-to-take-chances/#commentsFiled under: , , , , , ,

The Federal Reserve Open Market Committee (FOMC) issued its statement indicating again that interest rates will remain low for an extended period of time. Thomas Hoenig dissented against the FOMC statement and wants a much tighter monetary policy. He still remains the only voice against the statement but is said to favor a change in language, not an immediate rise in interest rates.

The FOMC mentioned continued economic improvement but indicated that it was a mixed picture with high unemployment and depressed housing. With unemployment expected to remain elevated for the foreseeable future and little inflationary pressure from the CPI thus far, it is in no rush to tighten.

Continue reading The Fed Decision: Not the Time to Take Chances!

The Fed Decision: Not the Time to Take Chances! originally appeared on BloggingStocks on Wed, 23 Jun 2010 17:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>federal reservefomcinthenewsmonetary policythomas hoenigThomasHoenigWed, 23 Jun 2010 17:00:00 EST<![CDATA[Ray of Light: China Quickly Returns to Robust GDP Growth]]>http://www.bloggingstocks.com/2010/01/21/ray-of-light-china-quickly-returns-to-robust-gdp-growth/http://www.bloggingstocks.com/2010/01/21/ray-of-light-china-quickly-returns-to-robust-gdp-growth/http://www.bloggingstocks.com/2010/01/21/ray-of-light-china-quickly-returns-to-robust-gdp-growth/#commentsFiled under: ,

A good news data point for investors: China's economy grew at a 10.7% rate in Q4 -- a pace that pushed 2009 GDP to an impressive 8.7% pace, China's Xinhua News Agency reported Thursday, citing National Bureau of Statistics data.

"The accelerating GDP growth in the fourth quarter was due to a low basis of the same period in 2008, when the quarterly GDP expanded 6.8% from a year earlier, also indicating that the country's economy is on a strong rebound," said Zhuang Jian, senior economist for the Asian Development Bank, Xinhua reported.

Continue reading Ray of Light: China Quickly Returns to Robust GDP Growth

Ray of Light: China Quickly Returns to Robust GDP Growth originally appeared on BloggingStocks on Thu, 21 Jan 2010 16:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>chinamonetary policyMonetaryPolicystimulusworld growthWorldGrowthThu, 21 Jan 2010 16:20:00 EST<![CDATA[Inflation Surges on Wealth Destruction in North Korea]]>http://www.bloggingstocks.com/2010/01/07/inflation-surges-on-wealth-destruction-in-north-korea/http://www.bloggingstocks.com/2010/01/07/inflation-surges-on-wealth-destruction-in-north-korea/http://www.bloggingstocks.com/2010/01/07/inflation-surges-on-wealth-destruction-in-north-korea/#commentsFiled under: , , , ,

Even though the regime has loosened some of the restrictions on currency exchange, inflation is still skyrocketing in North Korea. The government recently announced that it was moving to a new currency, and that the swap would involve a limit on how much could be traded. As a result, personal wealth was being consciously constrained, which led to the open questioning of the regime, defiance and rioting in some cases, and even a rare instance of flexibility among Kim Jong Il's subordinate decision makers.

Reports from inside the isolated communist state suggest that food shortages and price inflation have resulted from the new monetary policy, exacerbating a difficult situation with which the country already had to cope.

Continue reading Inflation Surges on Wealth Destruction in North Korea

Inflation Surges on Wealth Destruction in North Korea originally appeared on BloggingStocks on Thu, 07 Jan 2010 12:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>communismcommunist bloccommunist partyCommunistscurrencycurrency exchangecurrency marketscurrency ratesdprkinthenewskim jong ilmonetarymonetary policynorth koreanorth korea uncoverednorth koreanThu, 07 Jan 2010 12:20:00 EST<![CDATA[New North Korean monetary policy leaves two dead, markets in uproar]]>http://www.bloggingstocks.com/2009/12/09/new-north-korean-monetary-policy-leaves-two-dead-markets-in-upr/http://www.bloggingstocks.com/2009/12/09/new-north-korean-monetary-policy-leaves-two-dead-markets-in-upr/http://www.bloggingstocks.com/2009/12/09/new-north-korean-monetary-policy-leaves-two-dead-markets-in-upr/#commentsFiled under: , , ,

The timing couldn't have been worse. Just as a U.S. envoy arrived in North Korea to meet with the reclusive regime's officials, protests and violence are reported to have erupted. The country is reacting to a new currency issue that is being used to seize most of the citizens' money and savings.

On November 30, 2009, the regime announced that it would issue new currency and cap the amount that could be exchanged at the equivalent of $40. This effectively rendered the money held privately worthless.

Continue reading New North Korean monetary policy leaves two dead, markets in uproar

New North Korean monetary policy leaves two dead, markets in uproar originally appeared on BloggingStocks on Wed, 09 Dec 2009 12:50:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>capitalismcommunismCommunistsdprkinthenewsKim Il Sungkim jong ilmonetarymonetary policynorth koreaPyongyangWed, 09 Dec 2009 12:50:00 EST<![CDATA[The Fed decision: almost exactly as expected!]]>http://www.bloggingstocks.com/2009/11/04/the-fed-decision-almost-exactly-as-expected/http://www.bloggingstocks.com/2009/11/04/the-fed-decision-almost-exactly-as-expected/http://www.bloggingstocks.com/2009/11/04/the-fed-decision-almost-exactly-as-expected/#commentsFiled under: , , , , , ,

The Federal Reserve Open Market Committee (FOMC) issued its statement almost exactly as expected. The language on interest rates is remaining low for an extended period of time remained largely unchanged, and the decision was unanimous.

As I have mentioned earlier, the Fed continues to avoid any potential language which could disrupt the financial markets. Any potentially controversial ideas seem to be reserved for speeches by the Chairman and other government officials.

Continue reading The Fed decision: almost exactly as expected!

The Fed decision: almost exactly as expected! originally appeared on BloggingStocks on Wed, 04 Nov 2009 15:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bernankefeaturedfederal reserveFederalReservemonetary policyMonetaryPolicyWed, 04 Nov 2009 15:45:00 EST<![CDATA[Fed's quantitative easing timetable is the big $2 trillion question]]>http://www.bloggingstocks.com/2009/10/20/feds-quantitative-easing-timetable-is-the-big-2-trillion-ques/http://www.bloggingstocks.com/2009/10/20/feds-quantitative-easing-timetable-is-the-big-2-trillion-ques/http://www.bloggingstocks.com/2009/10/20/feds-quantitative-easing-timetable-is-the-big-2-trillion-ques/#commentsFiled under: , ,

MarketWatch Chief Economist Irwin Kellner sometimes boldly goes where no man has gone before, to cite an old Star Trek phrase, and this week he evaluates the U.S. Federal Reserve's dilemma.

And what a dilemma it is: regarding quantitative easing policy, if the Fed withdraws its record cash injections too soon, it could trigger a double-dip recession, Kellner said. Conversely, if the Fed withdraws funds too late, inflation could re-heat. As part of its quantitative easing policy, the Fed's balance sheet has swelled to more than $2 trillion from about $869 billion in 2007.

Continue reading Fed's quantitative easing timetable is the big $2 trillion question

Fed's quantitative easing timetable is the big $2 trillion question originally appeared on BloggingStocks on Tue, 20 Oct 2009 16:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>BernankeinthenewsIrwin Kellnermonetary policyquantitative easingTue, 20 Oct 2009 16:30:00 EST<![CDATA[The case for a weaker dollar]]>http://www.bloggingstocks.com/2009/10/04/the-case-for-a-weaker-dollar/http://www.bloggingstocks.com/2009/10/04/the-case-for-a-weaker-dollar/http://www.bloggingstocks.com/2009/10/04/the-case-for-a-weaker-dollar/#commentsFiled under: , , , , , , ,

Why would the government want a weak dollar? To get some perspective on the dilemma facing the Fed, let's go back to the Clinton years. During the 1990s, we had a booming economy. That booming economy fostered a strong dollar policy (i.e., strong economy equals a strong dollar).

Now the tables are turned and we are in the worst recession since the 1930s. We are mired in debt and our unemployment keeps rising. The housing market, while improving somewhat, is still in shambles. Banks are short of money to lend, keeping a lid on expansion, and on and on. So then we have the reverse of the 1990s.

Continue reading The case for a weaker dollar

The case for a weaker dollar originally appeared on BloggingStocks on Sun, 04 Oct 2009 15:10:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Bill Grossinthenewsmonetary policyrecessionU.S. dollarSun, 04 Oct 2009 15:10:00 EST<![CDATA[Global economy will contract in 2009 for first time since World War II, World Bank says]]>http://www.bloggingstocks.com/2009/03/09/global-economy-will-contract-in-2009-for-first-time-since-world/http://www.bloggingstocks.com/2009/03/09/global-economy-will-contract-in-2009-for-first-time-since-world/http://www.bloggingstocks.com/2009/03/09/global-economy-will-contract-in-2009-for-first-time-since-world/#commentsFiled under: , , , ,

Investors received yet another indicator Monday that this is not your father's recession.

The global economy will likely contract in 2009 for the first time since World War II -- including a decline in trade - - the World Bank announced in its most recent report.

Continue reading Global economy will contract in 2009 for first time since World War II, World Bank says

Global economy will contract in 2009 for first time since World War II, World Bank says originally appeared on BloggingStocks on Mon, 09 Mar 2009 11:10:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>credit marketsemerging marketsfeaturedfiscal policyFiscalPolicygdpglobal economyglobalizationmonetary policyMonetaryPolicytradeWorld BankMon, 09 Mar 2009 11:10:00 EST<![CDATA[Where does the U.S. economy go from here?]]>http://www.bloggingstocks.com/2009/02/12/where-does-the-u-s-economy-go-from-here/http://www.bloggingstocks.com/2009/02/12/where-does-the-u-s-economy-go-from-here/http://www.bloggingstocks.com/2009/02/12/where-does-the-u-s-economy-go-from-here/#commentsFiled under: , , ,

The U.S.'s first fiscal stimulus package 'of size' since the recession's start has passed - - albeit in a modified form that decreased spending by about $140 billion over the original outline.

Further, the young President Barack Obama, like the young President John F. Kennedy, has learned that presidential honeymoons can be short inside the beltway, particularly if you have to trade policy to obtain votes both inside your party and among the loyal opposition.

Meanwhile, investors and the financial community more broader await the specifics pertaining to Obama administration's revised plan to stabilize the banking system, with the declining Dow discounting that even a successful plan will require months of systemic adjustment, and, of course, more public funds.

Continue reading Where does the U.S. economy go from here?

Where does the U.S. economy go from here? originally appeared on BloggingStocks on Thu, 12 Feb 2009 14:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>CongressDemocratsfiscal policygdpmonetary policyObama administrationRepublicansU.S. economyThu, 12 Feb 2009 14:20:00 EST<![CDATA[Davos Recap: With castigation stage over, collaboration begins]]>http://www.bloggingstocks.com/2009/02/02/davos-recap-with-castigation-stage-over-collaboration-begins/http://www.bloggingstocks.com/2009/02/02/davos-recap-with-castigation-stage-over-collaboration-begins/http://www.bloggingstocks.com/2009/02/02/davos-recap-with-castigation-stage-over-collaboration-begins/#commentsFiled under: , , ,

The nutshell on the 2009 World Economic Forum held in Davos? It was a conference where nearly everyone agreed that the financial crisis started in and is primarily the result of U.S. policy errors, but agreed on little else after that.

Further, the Davos gathering produced almost no new insights regarding the nature of the crisis beyond what is already known: that excessive leverage throughout the system, arcane and in some cases Frankenstein-like derivatives, inadequate national-level financial regulation, and the collapse of demand, set in motion first the U.S. recession, then the credit crunch, then the global recession.

Continue reading Davos Recap: With castigation stage over, collaboration begins

Davos Recap: With castigation stage over, collaboration begins originally appeared on BloggingStocks on Mon, 02 Feb 2009 18:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>banking sectorBrazilChinaDavosE.U.fiscal policygdpJapanMexicomonetary policyRussiaU.S. economyWorld Economic ForumMon, 02 Feb 2009 18:30:00 EST<![CDATA[With rates near zero, investors will be focusing on the Fed's statement]]>http://www.bloggingstocks.com/2009/01/27/with-rates-near-zero-investors-will-be-focusing-on-the-feds-st/http://www.bloggingstocks.com/2009/01/27/with-rates-near-zero-investors-will-be-focusing-on-the-feds-st/http://www.bloggingstocks.com/2009/01/27/with-rates-near-zero-investors-will-be-focusing-on-the-feds-st/#commentsFiled under: , , ,

With its benchmark and new, short-term interest rate already in its 0-0.25% target range, investors are expected to concentrate on the U.S. Federal Reserve's statement and any information (or clues) it may provide about both the U.S. economy and the central bank's quantitative easing policy.

Further, Fed officials are also considering a revision of the central bank's forecasts so that they include periods beyond three years, Boomberg News reported Tuesday. The Fed will release its statement Wednesday at 2:15 p.m. ET.

Economist Peter Dawson told BloggingStocks he, and probably many other economists, will be looking for any Fed commentary / analysis of its quantitative easing strategy.

Continue reading With rates near zero, investors will be focusing on the Fed's statement

With rates near zero, investors will be focusing on the Fed's statement originally appeared on BloggingStocks on Tue, 27 Jan 2009 18:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank sectorBernankecredit marketsdeflationfeaturedFedfederal reserveFederalReserveinflationmonetary policyquantitative easingTue, 27 Jan 2009 18:31:00 EST<![CDATA[What happens if the U.S. enters a 'giddy growth' period?]]>http://www.bloggingstocks.com/2009/01/23/what-happens-if-the-u-s-enters-a-giddy-growth-period/http://www.bloggingstocks.com/2009/01/23/what-happens-if-the-u-s-enters-a-giddy-growth-period/http://www.bloggingstocks.com/2009/01/23/what-happens-if-the-u-s-enters-a-giddy-growth-period/#commentsFiled under: , ,

Readers of this space know that a preferred tactic, stemming from the graduate school years and schmoozing with economists and policy wonks is to 'take the other side in an argument' or 'argue the alternate point-of-view.'

Well, one argument forwarded by economic conservatives, market absolutists and others is that the proposed fiscal stimulus package will be 'inflationary' and that it 'won't stimulate the economy.'

Arguing to the contrary...

Economist Peter Dawson took up the above argument, but only because BloggingStocks required him to do so (Ah, the power of the press!).

"A stimulus package that's both inflationary and that won't stimulate the economy," Dawson said. "Hmm? The logic is a little curious here, because inflation implies that there's demand and economic growth, and a failure to stimulate the economy implies there's very little demand and hence very little or no economic growth. The conclusions contradict, so what do the economic conservatives say the stimulus is going create, demand or no demand? I'll leave it for them to clarify their argument."

Continue reading What happens if the U.S. enters a 'giddy growth' period?

What happens if the U.S. enters a 'giddy growth' period? originally appeared on BloggingStocks on Fri, 23 Jan 2009 17:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>cpifiscal policyfiscal stimulus packagegdpinflationmonetary policyU.S. economyFri, 23 Jan 2009 17:45:00 EST<![CDATA[Trichet's (belated) two-step: ECB cuts key interest rate to record low 2% ]]>http://www.bloggingstocks.com/2009/01/15/trichets-belated-two-step-ecb-cuts-key-interest-rate-to-reco/http://www.bloggingstocks.com/2009/01/15/trichets-belated-two-step-ecb-cuts-key-interest-rate-to-reco/http://www.bloggingstocks.com/2009/01/15/trichets-belated-two-step-ecb-cuts-key-interest-rate-to-reco/#commentsFiled under: , ,

The impossible has happened. The Chicago Cubs won the National League pennant?

No, ECB President Jean-Claude Trichet is now in accommodation mode.

Trichet, a legendary inflation hawk, presided over the European Central Bank as it cut its benchmark interest rate by 50 basis points to 2% Thursday.

It was fourth consecutive monthly interest rate cut for the ECB and it matches the record low interest rate reached during the 2003-2005 period. However, Trichet, at the ECB's regular post-meeting news conference, indicated monetary policy makers will avoid a cut in interest rates at its next meeting in February, Bloomberg News reported Thursday.

Economist David H. Wang said there's a bright side and a downside to the ECB's most-recent action, and he isn't so sure the bank is done cutting rates, even with a prospective February pause.

Continue reading Trichet's (belated) two-step: ECB cuts key interest rate to record low 2%

Trichet's (belated) two-step: ECB cuts key interest rate to record low 2% originally appeared on BloggingStocks on Thu, 15 Jan 2009 12:02:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>ECBeuro zoneEuropean Central BankgdpGermanyinterest ratesinthenewsmonetary policyThu, 15 Jan 2009 12:02:00 EST<![CDATA[Martin Wolf: U.S. fiscal stimulus is a necessary task, but not the only one]]>http://www.bloggingstocks.com/2009/01/14/martin-wolf-u-s-fiscal-stimulus-is-a-necessary-task-but-not-t/http://www.bloggingstocks.com/2009/01/14/martin-wolf-u-s-fiscal-stimulus-is-a-necessary-task-but-not-t/http://www.bloggingstocks.com/2009/01/14/martin-wolf-u-s-fiscal-stimulus-is-a-necessary-task-but-not-t/#commentsFiled under: , ,

Can the U.S. government run $1 trillion budget deficits for two, three years? Indeed it can, Financial Times columnist Martin Wolf argues, and the deficits can even be higher, for a while. After that, there's more work ahead.

The specter of $1 trillion budget deficits may be vociferously opposed by Republicans and other economic conservatives, but Wolf, in so many words, says what other choice does the United States have? What would be the alternative? Simultaneously raising taxes now to lower the deficit? Hardly prudent. Doing nothing? Another dreadful idea. So, it's prime the pump, or sit there at the well and await nothing.

Up ahead: two bigger tasks

What's more, Wolf sees two additional tasks (structural changes) that are just as important to the goal of U.S. economic recovery -- but that may be even harder to implement: removing toxic assets from the banking system and reducing the U.S.'s structural current account deficit (the trade deficit).

The first is the forced write-off of bad assets, fiscal recapitalization of the banks, or debt-for-equity tactic, and it should be done comprehensively and quickly. Slow, gradual bad-debt reduction is not the correct policy, Wolf argues, as it would delay the economic recovery.

Continue reading Martin Wolf: U.S. fiscal stimulus is a necessary task, but not the only one

Martin Wolf: U.S. fiscal stimulus is a necessary task, but not the only one originally appeared on BloggingStocks on Wed, 14 Jan 2009 17:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank sectorFedfiscal policyfiscal stimulus packagegdpimportsMartin Wolfmonetary policyquantitative easingtoxic assetstradetrade deficitU.S. economyWed, 14 Jan 2009 17:00:00 EST<![CDATA[Bernanke: Stimulus not enough without more for banks]]>http://www.bloggingstocks.com/2009/01/13/bernanke-stimulus-not-enough-without-more-for-banks/http://www.bloggingstocks.com/2009/01/13/bernanke-stimulus-not-enough-without-more-for-banks/http://www.bloggingstocks.com/2009/01/13/bernanke-stimulus-not-enough-without-more-for-banks/#commentsFiled under: , , ,

Two internationally known economists converged Tuesday on a common point regarding the link between stimulus and the U.S. economy's recovery -- but from different vantage points.

U.S. Federal Reserve Chairman Ben Bernanke, in a speech before the London School of Economics, said fiscal stimulus won't be enough to create a lasting recovery, unless it is accompanied by strong measures to stabilize the financial system.

Meanwhile, New York Times economist Paul Krugman underscored the need for both a large fiscal stimulus capable of providing an immediate boost to the economy and providing stimulus 18 and 24 months out.

In a CNBC interview Tuesday, Krugman underscored the need for a large fiscal stimulus -- a critical mass of fiscal stimulus, if you will -- to counteract the massive amount of stimulus taken out of the economy from declines in consumer spending, business investment, home price depreciation, constrained credit by banks, and stock market declines.

Krugman added that the $700-850 billion proposed fiscal stimulus package is too small. Earlier, in his column in The Times, Krugman said both shovel-ready and longer-term infrastructure projects were required to keep a lid on rising unemployment for the next two years.

Continue reading Bernanke: Stimulus not enough without more for banks

Bernanke: Stimulus not enough without more for banks originally appeared on BloggingStocks on Tue, 13 Jan 2009 15:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BernankeFedfiscal stimulusfiscal stimulus packagegdpmonetary policyquantitative easingTARPU.S. economyTue, 13 Jan 2009 15:00:00 EST<![CDATA[Happy Birthday euro! Currency turns age 10 January 1]]>http://www.bloggingstocks.com/2009/01/01/happy-birthday-euro-currency-turns-age-10-january-1/http://www.bloggingstocks.com/2009/01/01/happy-birthday-euro-currency-turns-age-10-january-1/http://www.bloggingstocks.com/2009/01/01/happy-birthday-euro-currency-turns-age-10-january-1/#commentsFiled under: ,

In most locales around the world, the New Year is a cause for a celebration.

But how about a new year celebration combined with the birthday party? Talk about a celebration.

When the new year dawns, Europeans will be doing just that - - at least Europeans in the euro zone: that's because the euro currency turns age 10 on January 1, 2009.

Euro has strengthened Europe

When launched January 1, 1999, 11 nations comprised the euro zone: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Later, Cyprus, Greece, Malta, and Slovenia joined, and Slovakia will become a member on January 1, 2009 to bring euro zone membership to 16.

Further, while some critics still denounce the euro as 'paving the way for end of Europe's broad social safety net' the euro currency has basically achieved its goals, with enormous benefits for Europe's citizens and visitors, so says economist Peter Dawson. The euro traded at $1.3890 Wednesday morning.

Continue reading Happy Birthday euro! Currency turns age 10 January 1

Happy Birthday euro! Currency turns age 10 January 1 originally appeared on BloggingStocks on Thu, 01 Jan 2009 10:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>dollarECBeuroeuro zoneEuropeEuropean Central Bankgdpmonetary policyThu, 01 Jan 2009 10:00:00 EST<![CDATA[How much money can the Fed create? ]]>http://www.bloggingstocks.com/2008/12/23/how-much-money-can-the-fed-create/http://www.bloggingstocks.com/2008/12/23/how-much-money-can-the-fed-create/http://www.bloggingstocks.com/2008/12/23/how-much-money-can-the-fed-create/#commentsFiled under: , , ,

The U.S. Federal Reserve is reaching into its 'new tool box' to use quantitative easing to help jump-start the U.S. economy from it worst recession in decades, and it begs the question: is there a limit to amount of money the Fed can create?

"That depends," economist David H. Wang told BloggingStocks. "There are very few case studies for quantitative easing, and there is not a consensus on what is the maximum amount of money available."

Money: it makes the world go round

Quantitative easing involves increasing funds in the financial system after the Fed loses the ability to lower the cost of money from an interest rate standpoint. Basically, the Fed adds cash by purchasing Treasuries, agency debt, and if the need arises, other asset-backed securities, hoping that some of that money will be lent or otherwise deployed in commercial operations.

The Fed's balance sheet has surged to $2.3 trillion from about $924 million in September, when the first wave of the financial crisis began to freeze credit markets and decimate stock markets around the world.

Moreover, the Fed's balance sheet is likely to increase as other interventions become necessary to stabilize the financial system. For example, the Fed is on the hook for up to another $240-$265 billion as a result of the rescue of financial services giant Citigroup (NYSE: C).

Continue reading How much money can the Fed create?

How much money can the Fed create? originally appeared on BloggingStocks on Tue, 23 Dec 2008 09:15:00 EST. Please see our terms for use of feeds.

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Global credit markets have recovered and stabilized following a brush with a global financial meltdown in September, but those markets have not normalized and a tough stretch of road remains ahead, so says an economist.

"We are on 'a great, long, slow journey' to use a Chinese saying," economist David H. Wang told BloggingStocks. "We have to be prepared for more bumps in the road ahead in 2009. We must be both proactive and also take corrective action in the credit markets."

Short-term interests have fallen considerably in the past three months, with the London rate for three-month loans in dollars (LIBOR) declining Friday to 1.50% from 4.82% earlier this fall, Bloomberg News reported, primarily on the strength of $8.4 trillion in liquidity-oriented interventions by the U.S. Federal Reserve and the other, major central banks.

The LIBOR is particularly important because it determines rates for $360 trillion of financial products worldwide, from home loans to derivatives.

Central banks: on the watch for credit stress signs

What could represent one of those 'bumps,' i.e. a re-igniting of short-term rates, in Wang's view? Another wave of home mortgage foreclosures, which would lead to another batch of toxic-bonds, write-offs, and financial institution stress, he said. The aforementioned "underscores the urgency of the Obama Administration and Congress passing a major home mortgage refinance plan for preventable foreclosures," Wang said. "If we stem the rise in mortgage foreclosures, we will make progress on the road leading to economic recovery."

Continue reading Stabilized credit markets could hit more bumps in road in 2009, economist says

Stabilized credit markets could hit more bumps in road in 2009, economist says originally appeared on BloggingStocks on Fri, 19 Dec 2008 15:51:00 EST. Please see our terms for use of feeds.

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