The Mess That Greenspan Made - Part 415

A special links post is needed today to cover the developing brouhaha between the Federal Reserve and Bloomberg after Fed Chief Ben Bernanke responded to last week’s Bloomberg article – Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress – that detailed how the central bank extended nearly $8 trillion in loans and guarantees to the nation’s biggest banks during the financial crisis, allowing them to reap $13 billion in profits.

BLOOMBERG vs. BERNANKE
Bernanke Letter to House and Senate(.pdf) – Federal Reserve
Bloomberg News Responds to Bernanke Criticism – Bloomberg
Bernanke to Hill: Flawed reporting on Fed loans – Reuters
Bernanke denies hiding size of crisis loans – MarketWatch
Fed Lashes Out at ‘Errors’ in Reporting – NY Times
Fed Shoots Back in Defense of Crisis Lending – WSJ
Fed disputes report of secret help to big banks – Washington Post
$7.77 trillion in secret Fed loans to banks? – EconBrowser
Separating Fact From Fiction on the Fed’s Loans – WSJ
Fed Chairman responds to “inaccurate” Bloomberg article – Calculated Risk
Bernanke Responds to Mainstream Media Reports of “Secret” Loans – Kid Dynamite
Bernanke Escalates Bloomberg Foodfight: Bloomberg 1, Fed 0 – Naked Capitalism
Smackdown of the day: Bloomberg vs the Fed – Salmon, Reuters
Bloomberg vs Bernanke – FT Alphaville

I’m still trying to get caught up on this story as I spent most of the day yesterday doing my little part in support of the U.S. economy – Christmas shopping.

 

Charting ECB Government Bond Buying

From this report at Der Spiegel comes the terrifying chart below showing how dramatically ECB (European Central Bank) bond buying has increased in recent months. This comes at a time when European banks have increasingly relied on the ECB’s emergency liquidity programs and expectations are being lowered by the hour for this week’s summit.

Of course, European banks tapped the Fed/ECB dollar swap program, announced to much fanfare last week, to the tune of $50+ billion in its first week of operation at lower rates and easier terms, about five times the amount that analysts had expected.

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Wednesday Morning Links

MUST READS
Me like cheap dollars – FT Alphaville
France vows powerful summit deal – Reuters
Merkel’s Path: Brinkmanship for Debt Crisis – NY Times
EU Leaders Angry at Standard and Poor’s Ratings Warning – Spiegel
The Long Shadow of German Hyperinflation: Echoes – Bloomberg
How the ECB could be forced to print money – Salmon, Reuters
UBS doubts your eurozone contingency plan is good enough – FT Alphaville
Senate set to vote on CFPB nominee Thursday – MarketWatch
CFTC Makes Sure MF Global Won’t Be Able To Lose Any More Customer Money – DealBreaker
Calling on the US Supreme Court to Hear Standard Chartered v. FINRA – Sense on Cents
How Payroll Tax Cut Affects Social Security’s Future – NPR
The Robin Hood Tax – NY Times

MARKETS/INVESTING
Oil slips to near $101 amid mixed US demand signs – AP
Gold steady ahead of EU summit ECB meeting – Reuters
Those bullish corporate insiders – MarketWatch
This is what a real market crash looks like – Fortune
How to invest a $10,000 cash windfall – CNN/Money
Time picking a financial adviser is time well spent – USA Today
How gold is ‘fixed’ and what drives the real price – Mineweb
OPEC: Speculators to blame for high oil prices – CNN/Money
E&Y sees better things ahead for junior miners – Mineweb
Financial Crisis Gives Investors More Reasons to Love Gold – CNBC

ECONOMY/WORLD/HOUSING/BANKING
Food Stamp Use on the Rise – WSJ
Drop in U.S. Jobless Rate Sign of Demo Shift – Bloomberg
Hoover Institute recommends Hooverite policies – Noahpinion
The Worldwide Depression/Recession Of 2012 – Daily Capitalist
Euro Uncertainty: Anxious Greeks Emptying Their Bank Accounts – Spiegel
A Controversial Paragon: Europe Shudders at Germany’s New-Found Power – Spiegel
Demand outstrips supply at closely watched German bond auction – Globe & Mail
Are There Really Two U.S. Housing Markets? – CNBC
Why Home Prices Are (and Aren’t) Stabilizing – WSJ
Chapman: No home price gain for 2012 – O.C. Register
It’s accountability time for banks and Wall Street – Washington Post
Too-Big-To-Fail Banks Back on Senate Agenda – Bloomberg

 

We’re Number 1! We’re Number 1!

The Economist’s Daily Chart details how inequality has changed in a select few developed countries and, after being neck-and-neck with the British, us ‘Mericans managed to pull away from them during the housing bubble. In the aftermath of the 2008 financial crisis, things are now probably much worse (or better, depending on your income).

As you might expect, the reason for the dark blue line to be rising is because the pay of the high-income individuals is increasing at a much faster pace than the low-income folks (and they didn’t make much to start with). In fact, the top ten percent of earners now make about nine times the bottom ten percent. Of course, the top 1 percent are doing far better than the other 99 percent, something that the Occupy Wall Street crowd has latched onto. About the only downside for the high-income crowd is that they work much longer hours than the others, likely an important reason why they earn more.

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