Saturday, July 11, 2009

Nuriel Roubini on TV: Animal Spirits

Bloomberg special edition with Roubini

Preview: Roubini on "Animal Spirits"

Roubini: put it in cash (and on socializing the losses)

Roubini Jan. 09 on employment
"It is pretty bleak"

Major Banks Stop Honoring State Of California IOUs -

"Despite pressure from the state treasurer, JPMorgan Chase & Co., Bank of America Corp., and Wells Fargo & Co. and other major banks planned to stick to their plans and not honor California's warrants after Friday. State Treasurer Bill Lockyer announced Citigroup Inc. agreed to a one-week extension through July 17."

Thursday, July 9, 2009

BBC NEWS | Europe | World powers accept warming limit

"Developed and developing nations have agreed that global temperatures should not rise more than 2C above 1900 levels, a G8 summit declaration says."
Of course they did. Their graph shows we are now at +.7 C from 1900, so that means we just awarded ourselves with a license to do twice as bad as we've done so far.

Note that, like in many news articles in this day and age, no differing opinion is presented that may dent the official, self-congratulatory tone.

Treasury Works on 'Plan C' To Fend Off Lingering Threats -
"Informally known as Plan C, the internal project is focused on vexing problems such as the distressed commercial real estate markets, the high rate of delinquencies among homeowners, and the struggles of community and regional banks, said government sources familiar with the effort."

Wednesday, July 8, 2009

The Fed is Buying Treasurys

Gabor hits Send: The Fed is Buying Treasurys:
"In an unprecendented move [significant but not unprecedented - KYI*], the United States Federal Reserve is now buying US Treasury government bonds (source 1, source 2). The debt issued by the US government is being bought by the US Federal Reserve. Instead of lending money from others, the government is printing money to finance its spending. Printing money could massively devalue the dollar in the long term."

The US government has to finance everything it does either through taxes or by loaning money from others.

The US government can't issue new money to finance their undertakings.
Only the Fed can issue new money, but it's not supposed to just give the gvmt the money it wants.

KYI: Normally, the US government loans money from China or individuals. But those aren't giving the US money anymore. Instead, the Fed is printing new money and handing it to the government.

Well, this puts last month's "economic plan" in a new light. The Fed gets to control banks, then the Fed agrees to finance the government's debt. Power has never been so transparent.
Some will argue the Fed is acting like a lender twisting the US government.