Where central banks are concerned, it’s not conspiracy theory so much as the term “off-balance sheet.” There’s a reason Enron kicked off that mass-migration into the footnotes. For monetary officials, there’s the choice to be like Montagu Norman and what he thought of good practice at central banks. Silence.For years, the Chinese have tried it the other way. Big Mama [...]
It’s another one of those myths that gets repeated over and over because it has never been realistically challenged. Not in any public way. The Fed says its dollar swap lines, central bank liquidity swaps as they call them today, worked beautifully. They may not use that particular word to describe the results, but you are distinctly left with that [...]
According to the Federal Reserve’s calculations, the US dollar in Q1 pulled off its best quarter in more than twenty years - though it really didn't need the full quarter to do it. The last time the Fed’s trade-weighed dollar index managed to appreciate farther than the 7.1% it had in the first three months of 2020, the year was [...]
What connects March 2020 with February 2008 as well as the Crash of ’87 all then with the Great Contraction which initiated the Great Depression? If you said economic and financial chaos, you’d be partly right. There wasn’t really much or any of that in 1987, though there was with the other three. People including politicians and central bankers don’t [...]
Anna Jacobson Schwartz often gets buried under the mountains of study Milton Friedman conducted on his own. Contrary to what some, perhaps many, might think, Friedman didn’t write A Monetary History by himself. Anna Schwartz was his co-author for what would become one of the most important volumes of economic scholarship of the entire 20th century.Pretty much every central bank [...]
As I’ve said, it is a threefold failure of statistical models. The first being those which showed the economy was in good to great shape at the start of this thing. Widely used and even more widely cited, thanks to Jay Powell and his 2019 rate cuts plus “repo” operations the calculations suggested the system was robust.Because of this set [...]
It’s actually pretty easy to see why the IMF is in a hurry to secure more resources. I’m not talking about potential bailout candidates banging down the doors; that’s already happened. The fund itself is doing two contradictory things simultaneously: telling the world, repeatedly, that it has a highly encouraging $1 trillion in bailout capacity at the same time it [...]
Questioning the veracity of Chinese estimates (for anything) has always been something of an amateur sport. For a stat like real GDP, everyone “knows” that it is managed. In a complex world where an economic system for a billion and a half is incomprehensibly unpredictable, there’s really no other way to always hit your government’s mark (unless the Chinese are [...]
Hold all the congratulations. Jay Powell is, with a huge assist from the financial media, trying to pre-empt what comes next by taking a premature victory lap. The Fed isn’t just your central bank it is your friend. The amount of pure propaganda being put out lately is understandable if still disgusting. March was a good month to include [...]
The Federal Reserve announced the Secondary Market Corporate Credit Facility (SMCCF) on March 23. The intent of this program was to calm the corporate bond market (secondary) then experiencing a massive blowout. Credit spreads of all kinds of corporate securities were exploding, the market in danger of completely shutting down.According to its latest balance sheet statement as of this afternoon, [...]
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