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REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.
It’s not exactly clear what this is or why it’s been sitting in the draft folder for the last week, but now seemed to be as good a time as any to throw it up.
The young girl certainly seems talented, but, since I don’t understand the language and didn’t watch this all the way to the end, it’s not exactly clear what she’s talented at.
It looks like the Federal Reserve has lost another round in court, prying eyes apparently moving one step closer to examining just what exactly is going on at the nation’s central bank according to this story at The Hill where, surely, there are much more important things going on today involving the health care bill.
Congressional lawmakers critical of the Federal Reserve are cheering a federal appeals court decision Friday compelling the central bank to disclose information about the financial bailout.
The U.S. Court of Appeals in New York on Friday ruled in favor of Bloomberg LP against the Federal Reserve System in a suit filed under the Freedom of Information Act (FOIA). The suit has been a high-profile effort to obtain information from the Fed, which used broad powers to help stabilize the financial system during the worst financial crisis since the Great Depression.
Trillions of dollars were extended to support financial institutions during the crisis, and lawmakers and other critics have sought more transparency from the central bank.
“The statute as written by Congress sets forth no basis for the exemption the Board asks us to read into it,” wrote Dennis Jacobs, chief judge on the court, regarding FOIA. “If the board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”
The Federal Reserve lawyers (well paid, no doubt) are considering filing another appeal and will likely figure out some way of maintaining their secrecy.
The Economist’s recently updated Big Mac Index seems to add credence to the views of Mr. Krugman over those of Mr. Roach from this item earlier today, part of an increasingly nasty dispute (at least, for economists) about China’s currency policy.
Does anyone know if there is any empirical data on using the Big Mac Index as the basis for a FOREX trading strategy? It seems pretty simple and, over the long run, would likely be profitable to bet against the overvalued currencies and go long the undervalued ones.
The defense of monetary policy during the gestation years of the housing bubble was reiterated (yet again) yesterday by former Fed chief Alan Greenspan in a paper(.pdf) titled “The Crisis” that is being presented today at the Brookings Institution.
While the 48 pages of text and the 18 page appendix await attention that they are unlikely to receive from me on this Friday, the contents are quite clear based on reports in the mainstream financial media and the two central points appear to be:
1. Low rates are not to blame
2. See number 1
The Wall Street Journal carries a story in the public area of their website today where Jon Hilsenrath restores some order to the recent reporting on the former Fed chairman, inserting the once-mandatory caveats that all post-2008 Greenspan stories used to carry before an image re-building campaign apparently met with some success over the last year or so:
Mr. Greenspan’s reputation has been tarnished by the crisis. Widely hailed when he left office in January 2006 as one of the greatest central bankers ever, he is now blamed by many for advocating deregulation and low interest rates during the 1990s and 2000s.
That’s more like it – the third paragraph in – short and sweet.
In his paper, Greenspan concedes that regulation failed and that the central bank didn’t see the mounting risks in the financial system, but he goes on to defend monetary policy back in 2002-2004 and blames the “savings glut” as the primary interest rate culprit, that is, the theory that short-term rates played little role in inflating the housing bubble and that the Fed was powerless over the long-term rates that did.
Economist Steven Roach of Morgan Stanley Asia has some not-so-kind words for economist Paul Krugman and his view that the Chinese currency should be allowed to strengthen considerably from its current level.
Says Roach: “America doesn’t have a China problem, it has a savings problem … We should take out the baseball bat on Paul Krugman. I mean I think that the advice is completely wrong …. We’re lashing out at China rather than tending to our own business”.
According to this report, Krugman replied, “I’m a little surprised at Steve for saying that. What I said is actually based on pretty careful economic analysis. We have a world economy which is depressed by China artificially keeping its currency undervalued.”
TOP STORIES
Markets spooked as Greek rescue plan crumbles – Telegraph
Roach Rebuffs Krugman Call to Pressure China on Yuan – Bloomberg
Greenspan Concedes That the Fed Failed to Gauge the Bubble – NY Times
TheStreet.com discloses probe of Promotions.com books – MarketWatch
Petroleum Demand Lessons from the Late 1970s – The Oil Drum
Up-to-Date Primer on Gold, Part 1 – Seeking Alpha
It Was A Wonderful Life – Burning Platform
The Bears Are Dead Wrong – WSJ
MARKETS/INVESTING
Oil drifts below $82 as month-long rally stalls – AP
Gold slips as dollar firms; awaits news on Greece – Reuters
Central Bank Gold Holdings Expand at Fastest Pace Since 1964 – Bloomberg
Lost Force of Our Demand: The US No Longer Controls the Price of Oil – Gregor.us
Why gold and silver are biggest asset bubbles – Commodity Online
Will UNG Be the First Big ETF to Go Bust? – Zero Hedge
By Tim Iacono, Since 2005
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