The NY Federal Reserve is supposed to monitor big banks and prevent another financial crisis. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she bought a tiny recorder, and started secretly taping. This American Life reports. [more inside]
Al-Qaeda deliberately targeted the 9/11 attacks at the backbone of the world's financial system in lower Manhattan, to cripple US and world banking. That totally didn't happen and, national emergency aside, the US's (and world's) financial systems kept operating as normal, with no runs on banks and the NYSE trading at normal volumes just a week later. With the destruction of the physical infrastructure of banking and telecommunications in lower Manhattan, Alan Greenspan stranded in Zurich, and no one having any idea what was going on, how did that happen? Within 41 minutes, Federal Reserve Vice Chairman Roger Ferguson issued a short statement on Fedwire that the Fed fund transfer system was fully operational and the Fed would remain open until "an orderly closing could be achieved." Within 3 hours, the Fed issued a short statement that "The Federal Reserve System is open and operating. The discount window is available to meet liquidity needs." The financial system, the Fed declared, would not fail. [more inside]
Greenspan’s Iron Law is that the sum of these two numbers is approximately constant, at least for the last half-century in the United States. That is a pretty fraught claim: it means that every time the United States adds a billion dollars to Social Security benefits or Medicare payments or unemployment insurance outlays we are forcing a billion-dollar reduction in family saving or in the retained earnings of business, or an increase in government deficits, or some combination of these. ... So what is the evidence for it? Nobel-prize winning economist Robert Solow finds Alan Greenspan's latest book to be ideologically driven and embarrassing, a pity for someone who, Solow writes, was, when looking at his whole tenure, a very good chairman of the Fed.
The complete guide to America's jobs crisis and the failure of monetary policy using animated gifs
Fed Up. Matthew Yglesias explains how the Federal Reserve System works, and why progressives should care. A more recent column: What is "Austrian economics"? (And why is Ron Paul obsessed with it?) And the Economist has a roundup of heterodox economic theories: Austrian economics, neo-chartalism/MMT (previously), and market monetarism.
Bernard NotHaus has been convicted of possessing and selling coins that resemble United States coins, violating U.S.C. 18 § 486 and other US statutes. This follows three years after a raid on the Liberty Dollar offices. The trial took four days, the deliberation all of two hours. The US government is now pursuing a forfeiture case against Liberty Services for approximately $7 Million. (previously) [more inside]
Ron Paul, 11-term Republican Congressman for the 14th Congressional district of Texas, original Tea Partier (warning: YouTube), libertarian presidential candidate, and author of End the Fed (Bloomberg review) today announced that he is next in line to chair the United States House Financial Services Subcommittee on Domestic Monetary Policy and Technology in charge of, among other things, oversight of the Federal Reserve. [more inside]
Today, while testifying for only the second time on Capitol Hill since the financial crisis began, [former Fed chairman] Alan Greenspan said the Fed closely monitored the subprime market [...]"I was right 70% of the time, but I was wrong 30% of the time, and there were an awful lot of mistakes in 21 years...". But Greenspan's defense of his record today rang hollow to many seasoned observers, if not downright deceitful.
Idaho recently passed H.B. 633 (.pdf) that will allow Idaho citizens to pay their state taxes with an official state silver medallion. The news comes just a month after a South Carolina legislator introduced a bill seeking to ban Federal currency altogether, and replace the upstart greenback with gold or silver coins. Meanwhile, Georgia has introduced the "Sound Money in Banking Act" which would require any bank serving as a depository for the state to offer and accept gold and silver coins for deposit. Is gold making a comeback as currency?
In testimony before the Senate Banking Committee... where he’s seeking re-appointment as the Fed’s chairman, Bernanke called for cutbacks in Medicare and Social Security... “Willie Sutton robbed banks because that’s where the money is, as he put it,” Bernanke said. “The money in this case is in entitlements.” [more inside]
Some have questioned Treasury Secretary Tim Geithner's neutrality in dealing with the elite of the financial community. Here's his calendar [150MB pdf] for the last two years. You decide.
A Look Inside Two Central Banks: The European Central Bank And The Federal Reserve [PDF], 2003 article comparing and contrasting their basic structure and management from the St. Louis Federal Reserve Bank's magazine Review (blue ribbon for Most Generic Magazine Title). Author Patricia S. Pollard is now with the IMF. [more inside]
LOLFed. Doan cry, emo banker! If you hate the latest financial crisis news, but love image macros, then this is the site for you. It's like I Can Has Cheezburger meets the Wall Street Journal.
While the wild crowd call it "Woodstock for Central Bankers", others get festivities off on a sour note, referring to it as "Understanding Inflation and the Implications for Monetary Policy". Regardless of what your invitation to this party reads, it starts today, Monday June 9th on the 50th anniversary of The Phillips Curve, a previously discredited forecasting tool which may be revived by Ben Bernanke at The Federal Reserve. [more inside]
According to the latest biweekly numbers released last Thursday by the Federal Reserve, for the two weeks that ended January 16th American banks had negative $1.3 billion in non-borrowed reserves. This is, historically, extremely unusual; just two months ago they had $30 billion (positive, of course) in non-borrowed reserves. The only reason some banks haven't been shut due to insufficient -- negative! -- reserve requirements is that the Federal Reserve is currently loaning them enough money through the brand new TAF (Term Auction Facility) program (also running in Canada and Europe) to make up their shortfalls. Today's TAF press release says that 52 American banks or institutions are currently receiving loans totaling ~$40 billion -- but the Fed refuses to name who they are. [more inside]
Gov't will no longer report on M3 money supply, nor count Columbia River salmon Without explanation, the the Federal Reserve Board will, in March 2006, be stopping publication of its "M3" money supply information. Funding for the lab responsible for counting salmon on the Columbia River has also been eliminated.
Alan Greenspan Takes A Bath : a profile of Greenspan
Is the currency that oil is denominated in the real reason for the Iraq War? "The Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 80 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.)"