News highlights Jan 7, 2009
Even as Federal Reserve officials slashed their key interest rate to a record low and pledged to use other unconventional tools to fight the worst financial crisis since the 1930s, they still feared the economy would be stuck in a painful rut for some time. Documents released Tuesday provided insights into the Fed's historic decision to ratchet down its rate to near zero from 1 percent at its Dec. 15-16 meeting. (OregonLive, OR -- Business)
U.S. economists warm to government spending but debate its form Jan 7, 2009
"The new enthusiasm for fiscal stimulus, and particularly government spending, represents a huge evolution in mainstream thinking," said Janet Yellen, president of the Federal Reserve Bank of San Francisco ... Since the 1970s, the Federal Reserve has dealt with recessions by lowering interest rates, thus reviving demand by making it less expensive to borrow and to spend. (International Herald Tribune)
Flaherty seeks new ways to get credit going Jan 7, 2009
That's what the Federal Reserve is doing in the U.S.. Another option is finding a way to sell more of the securities to U.S. investors, who still have an appetite for bonds backed by things such as high-quality auto loans. (Globe and Mail)
Banks say money is there to lend Jan 7, 2009
Amidst a national recession and housing mortgage crisis, the Federal Reserve announced a plan in November to buy up to 500 billion of mortgage-backed securities, and also pledged recently to expand those purchases if needed to lower mortgage rates. This news, along with the decision of the Fed to help stimulate market growth by cutting its key interest rate from 1 percent to a target range of zero to 0. (Forest City Summit, IO)
Economy in grip of recession, reports show Jan 7, 2009
Federal Reserve Chairman Ben Bernanke and his colleagues also are concerned about the length and severity of the downturn, according to minutes of their closed-door deliberations released Tuesday. The minutes of the Dec. 15-16 meeting showed that Fed officials feared that the economy could "remain weak for some time and that the downside risks to economic growth would be substantial" despite the central bank's aggressive actions to fight the downturn. (AZCentral -- Business)
Obama: Americans Will Accept My Proposal Jan 7, 2009
While it is not known if a report released Tuesday by the Federal Reserve outlining bleak economic predictions tie into the president-elects announcement, Obama says Americans will accept his proposed economic stimulus plan, but only if they believe the money is being used wisely. Obama vows to ban all earmarks from the recovery package and appoint a chief performance officer to set government performance standards. (KWTX.com, TX)
Feds Predicts Bleak Economic Outlook Jan 7, 2009
In minutes released from its December meeting, the Federal Reserve predicts the current recession will be longer and deeper than originally thought. The Fed also predicted the nations gross domestic product will fall even further as unemployment numbers continue their increase well into 2010. (KWTX.com, TX)
Money market mystery Jan 7, 2009
The most recent figures from the Federal Reserve show that in November, the amount of money held in US money market funds exceeded the amount in equity funds, for the first time in 15 years. You have viewed your allowance of free articles. (FT.com -- Markets)
Crude Oil Falls a Second Day as U.S. Recession Deepens, Stockpiles Swell Jan 7, 2009
The U.S. Federal Reserve released minutes of a meeting of policy makers last month that showed they believed risks to the economy would be substantial. . (Bloomberg -- Canada)
U.S. claims Langston sent money to Peters Jan 7, 2009
The complaint asking forfeiture of the money says it was seized from Peters and is in the custory of the U.S. Marshals Service at the Federal Reserve Bank. Here's where the information becomes public about Peters. (Northeast Mississippi Daily Journal)
In a Fed decision, fears of a long recession Jan 7, 2009
As Federal Reserve officials met last month to confront the deepening recession, they worried that even a dramatic cut in interest rates and unprecedented new measures in monetary policy would not be enough to cauterize the country's economic troubles quickly ... "Many participants thought that the Federal Reserve should continue to consider whether expanding some of the existing facilities and creating new facilities could be helpful," the Fed minutes say. (International Herald Tribune -- Business)
Federal Reserve announces Miami directors Jan 7, 2009
Federal Reserve Bank announces Miami directors - South Florida Business Journal ... Federal Reserve Bank announces Miami directors ... Estes was appointed by the Federal Reserve Board of Governors in Washington, D.C. Banks and Shea were appointed by the Atlanta head office directors. (South Florida Business Journal, FL)
Herd Quits Eden for Land of Perpetual Recession Jan 7, 2009
The Federal Reserve has no tools left. Consumers are tapped out. (Bloomberg -- Columnists)
Arizona gains follow Dow rally Jan 7, 2009
That comes despite the Federal Reserve Board s release today of its staff s downward revision for the 2009 economy and a significant rise in unemployment expected into 2010 ... Rising unemployment, the declines in stock market wealth, low levels of consumer sentiment, weakened household balance sheets, and restrictive credit conditions were likely to continue to hinder household spending over the near term, minutes from the last meeting of the Federal Reserve s Open Market Committee said. (Phoenix Business Journal, AZ)
Morgan Stanley Loses Ground in M&A Advisory to Moelis, Perella Boutiques Jan 7, 2009
New York-based , which received a $10 billion infusion last year from the U.S. government and converted to a bank overseen by the Federal Reserve, relinquished the No. 2 spot it held in 2007 to JPMorgan. Morgan Stanley ranked fifth in 2008, the position bankrupt held the previous year. (Bloomberg)
Stocks Tumble on Labor Concern, Intel Outlook Jan 7, 2009
In Washington, the released Tuesday from the December meeting of Federal Reserve portrayed a central bank stunned by the weight of the recession and pessimistic about a near-term recovery for the labor market ... The New York Times on the Federal Reserve: A closer look at the minutes of the Federal Open Market Committee reveals shock and awe. (SmartMoney)
Fed fears extended contraction despite radical moves Jan 7, 2009
By Sue Kirchhoff, USA TODAY WASHINGTON Federal Reserve officials worried about the possibility of a "prolonged contraction" and destabilizing deflation in mid-December when they voted to cut a key interest rate to a historically low range of zero to a quarter-point. According to minutes of the Fed's Dec. 15-16 meeting, released Tuesday, central bank economists sharply reduced their forecast for the economy due to spiking unemployment; declining manufacturing, consumer and business spending; and... (USA Today -- Money)
Dollar mixed against major currencies Jan 7, 2009
The U.S. Federal Reserve officials generally agreed that the uncertainty surrounding the economic outlook was considerable and that downside risks to even this weak trajectory for economic activity were a serious concern, according to minutes of the Fed meeting in December released on Tuesday. Unable to cut interest rates below zero, Fed officials also discussed how they could address the financial crisis by using balance-sheet measures, such as buying up billions in Treasury debt or securities... (Xinhuanet, China)
Mutual Funds &Personal Finance Jan 7, 2009
And what happens if the Federal Reserve keeps short-term rates low for a long time or pushes them down more, and a fund does not cut its expenses while raising add-on fees. Some funds' NAV could fall below $1, a catastrophe for money funds. (Investors Business Daily)
Notes from the sideline: Great expectations Jan 7, 2009
In addition, the balance sheet of the Federal Reserve system has ballooned from $800 billion to over $2 trillion in recent months, entirely via the printing of new money. Down the road, these policies are sure to set off an inflationary spiral, which will quickly get out of control unless checked. (Hillsdale Independent, NY)
New chairman, vice chairman for S.F. Fed Jan 7, 2009
The Federal Reserve Bank of San Francisco, with branch offices in Los Angeles, Seattle, Salt Lake City, and Portland, and a cash processing office in Phoenix, provides wholesale banking services to financial institutions throughout the nine western states. San Francisco Business Times. (San Jose Business Journal, CA)
Can New Regulation Stop Another Madoff? Jan 7, 2009
Paulson's plan, if adopted, would merge the Securities and Exchange Commission with the Commodities Futures Trading Commission, transfer some authority over securities firms to the Federal Reserve, and create oversight for market risk and business conduct, among other things. It also would emphasize the industry's role in self-policing. (Forbes -- Business)
Outlook: Gold likely to buff up its 2008 winning streak Jan 7, 2009
Gold prices may strengthen after about $29 trillion was wiped off equities last year, the Federal Reserve cut interest rates to as low as zero and governments sought to end the financial crisis. People fear inflation, they fear the credit crunch and they fear currency losses, and gold is the perfect insurance against all of that, said Frederic Panizzutti, a senior vice-president at Geneva-based bullion refiner MKS Finance. (Business Report, South Africa)
China: U.S. Using Us as Financial Windshield Jan 7, 2009
A second commentary took direct aim at Federal Reserve Chairman Ben Bernanke and out-going Treasury Secretary Hank Paulson, while calling on Washington to put its house in order. "As the ancient Chinese sage Confucius said: 'On seeing a man without virtue, examine yourself to be sure you do not have the same defects.'" said the piece, signed by reporter Huang Xin. (Newsmax)
Gold Prices Fall as Dollar Gains Strength Jan 7, 2009
Inflation is a concern to some economists now that the Federal Reserve has sent U.S. interest rates about as low as they can go. That theoretically could boost gold prices, but with the economy so weak, inflation may well be contained for some time. (W-USA News, DC)
Short-term T-bill rates rise Jan 6, 2009
Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 0. 37 percent last week from 0. (Boston Globe)
Obama says US economy 'very sick' Jan 6, 2009
" The US Labor department will release its December employment report on Friday and many economists are expecting the jobless figure to rise by 500,000, bringing the total US job losses for 2008 to about 2.5 million. "Economists from across the political spectrum agree that if we don't act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment and the American dream slipping further and further out of reach," Mr Obama said. 'Very serious... (BBC News)
Credit crunch shows little sign of easing Jan 6, 2009
SOURCE: Federal Reserve/Rich Clabaugh/STAFF ... But economists generally say the credit markets also face an abnormal squeeze now one that justifies many of the extraordinary actions that the Federal Reserve and Treasury have taken in recent months ... Researchers at the Federal Reserve Bank of Minneapolis pushed this view in a report published in October, titled "Facts and Myths About the Financial Crisis of 2008." But their peers at the Federal Reserve Bank of Boston came back with a... (Christian Science Monitor -- USA)
Just the facts Jan 6, 2009
Federal Reserve Credit expanded $39. 3bn to a record $2. (Asia Times Online)
Monetarism enters bankruptcy Jan 6, 2009
The invasive dominance of monetarism in macroeconomics has been total ever since central bankers, led by Alan Greenspan, who from 1987 to 2006 was chairman of the Board of Governors of US Federal Reserve - the head of the global central banking snake by virtue of dollar hegemony - embraced the counterfactual conclusion of Milton Friedman that monetarist measures by the central bank can perpetuate the boom phase of the business cycle indefinitely, banishing the bust phase from finance capitalism... (Asia Times Online)
Severe Recession to Extend Through Mid-2009, Followed by Slow Recovery According to BNA's Annual Survey of Economists Jan 6, 2009
Aaron Lorenzo covers financial services for BNA, reporting on economic policy and the Federal Reserve for the Daily Report for Executives, Daily Tax Report, Daily Labor Report, and BNA's Banking Report. His coverage includes financial institutions, the $700 billion economic rescue bill, and other stimulus packages being rolled out by the Treasury Department, Congress, and the incoming Obama Administration. (PR Newswire)
Markets Slide After Friday's Rally Jan 6, 2009
In-depth features on U.S. markets, taxes, employment and the Federal Reserve. Stories. (CBS News)
The year of the financial journalist Jan 6, 2009
The Federal Reserve has finally answered that age-old question: How low can you go ... The Fed further promised to "employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability," and "to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level.". (Salon)
Gold Prices Fall as Dollar Gains Strength Jan 6, 2009
Inflation is a concern to some economists now that the Federal Reserve has sent U.S. interest rates about as low as they can go. That theoretically could boost gold prices, but with the economy so weak, inflation may well be contained for some time. (ABC News -- Wire)
Fed Buys MBS in Latest Unconventional Move Jan 6, 2009
NEW YORK (Reuters) - The Federal Reserve on Monday kick-started its latest unconventional program to boost the moribund economy, this time taking aim at the heart of the slumping housing market. The Fed plans to buy back as much as a ninth of outstanding bonds sold by housing finance companies Fannie Mae, Freddie Mac and Ginnie Mae and backed by U.S. mortgages, to drive down mortgage costs. (ABC News -- Wire)
Treasurys Fall as Investors Brace for Supply Glut Jan 6, 2009
There are two major ways that a recovery in Treasury yields could be limited: if the recession is much worse than expected, and if the Federal Reserve starts buying a significant amount of Treasurys. 1. (ABC News -- Wire)
Krugman’s Nanny State Jan 6, 2009
Nowadays the whole spectrum of economists, from Milton Friedman leftward, agrees that the Great Depression was brought about by a collapse of effective demand and that the Federal Reserve should have fought the slump with large injections of money. Krugman s parable of the tiny tots omits an important fact, however. (The American Conservative)
US credit markets resist thawing Jan 6, 2009
That's prompted criticism from Alan S. Blinder, a professor of economics at Princeton University in New Jersey and a former Federal Reserve vice chairman, who says the government should take a more active role as a stakeholder in the nation's banks. With the banks in a state of catatonic fear now, they're just sitting on the capital,'' Blinder said in an interview. (Sydney Morning Herald -- Business)
Asian stocks rise on recovery hopes Jan 6, 2009
49% as institutional investors sour on the idea of the Federal Reserve buying late-maturity Treasuries to keep rates low. The benchmark 10-year Japanese government bond yield rose 4. (Sydney Morning Herald -- Business)
Real Estate Outlook: What's in Store for 2009? Jan 6, 2009
He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. (RealtyTimes)
Party with your SO's ex? Jan 6, 2009
Truth With all of this info coming out about this country s financial institutions we still haven t found out which banks are behind the Federal Reserve. By Raqi. (Atlanta Journal-Constitution)
Dollar hits 3-week high vs euro Jan 6, 2009
In contrast, the US Federal Reserve reduced interest rates last month to between zero and 0 ... The US Federal Reserve will also release the minutes from its December meeting. (India Times)
Paul Krugman: Fighting off depression Jan 6, 2009
" Milton Friedman, in particular, persuaded many economists that the Federal Reserve could have stopped the Depression in its tracks simply by providing banks with more liquidity, which would have prevented a sharp fall in the money supply. Ben Bernanke, the Federal Reserve chairman, famously apologized to Friedman on his institution's behalf: "You're right. We did it. (International Herald Tribune)
EDITOR’S MAILBAG (Jan.3) Jan 6, 2009
" The United Socialist States of America (USSA) Socialism? Am I preaching socialism? No. I'm preaching against America's already-existing socialism. If you think that Republicans, particularly George W. Bush, already have not implemented socialism in a big way in America, then you really don't understand the term. Let's examine the top-ten ways in which Bush and his predecessors already have "spread the wealth" of America: 1. Our jobs have been spread to Asia, Indonesia, India and Mexico. 2. Our... (Albany Democrat-Herald, OR)
Fed starts $500bn plan to aid home loans Jan 6, 2009
The Federal Reserve Bank of New York on Monday said it had started its $500bn plan to drive down US mortgage rates by buying securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, the government-run mortgage financiers. Mortgage bond yields fell sharply as a result, extending a dramatic decline that followed the New York Feds announcement of the programme on November 25. (FT.com -- Markets)
Fines to be introduced for failed repo trades Jan 6, 2009
The TMPGs proposals are backed by the Federal Reserve Bank of New York. EDITORS CHOICE. (FT.com -- Markets)
Financial advice and predictions Jan 6, 2009
The great depression has been studied for decades by economists, including current Federal Reserve Chairman Ben Bernanke. Economic theory, government institutions and policy have evolved to incorporate the lessons learned. (Littleton Independent, MA)
Auto makers look to Mexico Jan 6, 2009
What is the difference between the U.S. Federal Reserve Board and the Department of the Treasury. The Federal Reserve Board, often called the Fed, is the central bank of the United States ... Among the central banks were the Federal Reserve, the Bank of Canada, the European Central Bank and the central banks of Britain, Switzerland and Sweden. (Globe and Mail -- Business)
The Obama Economy: Stimulating Growth, Or Funding Failure? Jan 6, 2009
The so-called bailouts of banking and financial institutions last fall are old news now, and whether or not Treasury Secretary Paulson and Federal Reserve Chairman Bernanke saved the world from a far worse economic collapse is debatable. But to the extent that one can actually follow how Paulson has disbursed our $700 billion, one thing is clear: he has not allocated the revenues in the ways he stated that he needed to - - by buying up troubled assets (bad loans) from lenders -... (Townhall.com)
Jumbo Loans Still Have High Interest Rates Jan 6, 2009
The is pushing for the Federal Reserve to include jumbo loans in its purchases of mortgages and mortgage-backed securities. Meanwhile, House Financial Services Committee Chairman Barney Frank (D-Mass. (Realtor Magazine Online)
Federal Reserve Drives Rates Even Lower Jan 6, 2009
REALTOR Magazine Online: The real estate professional's business support tool. YOUR INTERACTIVE MAGAZINE REALTOR.ORG/realtormag. (Realtor Magazine Online)
Paul Krugman: To succeed, stimulus plan must be dramatic and quick Jan 6, 2009
Milton Friedman, in particular, persuaded many economists that the Federal Reserve could have stopped the Depression in its tracks simply by providing banks with more liquidity, which would have prevented a sharp fall in the money supply ... Under the leadership of Ben Bernanke, the Federal Reserve chairman, the Fed has been supplying liquidity like an engine crew trying to put out a five-alarm fire, and the money supply has been rising rapidly. (Sacramento Bee -- Opinion)
Eating crow at a dinner for Wall Street Jan 6, 2009
At the dais, there's the new top deal-making troika if only government officials could get league table credit Henry Paulson Jr., the Treasury secretary; Ben Bernanke, chairman of the Federal Reserve; and Timothy Geithner, president of the Federal Reserve Bank of New York and Paulson's nominated successor. (Good luck with the hearings, Tim. (International Herald Tribune -- Business)
It's your money: 20 dos and don'ts for 2009 Jan 6, 2009
With the Federal Reserve cutting the federal funds rate close to zero and policymakers eager to revive the housing market, mortgage rates are expected to drop substantially in 2009. That could be a great opportunity to refinance your mortgage, but only if you have a solid credit score. (KRNV.com, NV)
Banks' `Catatonic Fear' Means U.S. Consumers Get No Relief From TARP Plan Jan 6, 2009
Thats prompted criticism from , a professor of economics at Princeton University in New Jersey and a former Federal Reserve vice chairman, who says the government should take a more active role as a stakeholder in the nations banks. With the banks in a state of catatonic fear now, theyre just sitting on the capital, Blinder said in an interview. (Bloomberg)
Dollar Rally Fizzles in Emerging Markets as Fed Awakens Appetite for Risk Jan 6, 2009
The dollar lost steam as the Federal Reserve cut its target rate for overnight loans between banks to as low as zero and poured $8. 5 trillion into the financial system. (Bloomberg)
CNNThe $8 Trillion Bailout Jan 6, 2009
The Federal Reserve put up $600 billion to guarantee money market deposits and has aggressively driven down interest rates to essentially zero ... All told, Congress, the Treasury Department, the Federal Reserve and other agencies have taken dozens of steps to prop up the economy ... The story begins more than a year ago with the Federal Reserve. (News4Jax.com, FL)
European Stocks Advance for Sixth Day; Shares of BHP Billiton, Next Climb Jan 6, 2009
Europes Index has rebounded 15 percent since Nov. 21 as investors speculated that U.S. President-elect will stimulate the worlds biggest economy with tax cuts and the largest infrastructure investment since the 1950s, while the Federal Reserve cut interest rates to as low as zero percent. Equities now appear to be regaining a bit of confidence, , who helps oversee about $1. (Bloomberg -- Europe)
Local Fed branch: Challenges loom in 2009 Jan 6, 2009
On another note, while The Federal Reserve made unprecedented moves last year which included a series of fed funds rate cuts by more than 550 basis points to help alleviate the frozen lending markets some of the programs may only alleviate banks concerns about their ability to fund new loans, according to the report ... The Federal Reserve Bank of Atlanta serves the Sixth Federal Reserve District, which includes Alabama and four other southern states. (Birmingham Business Journal, AL)
Central Banks Bring Out Scalpels To Tackle Deflation Jan 6, 2009
With the industrial economies of the West suffering a deep and long recession, officials from the Federal Reserve and the European Central Bank are taking action to stave off deflation, marking a U-turn from the central banks' concerns about increasing inflation just a few months ago ... Both Janet Yellen, president of the San Francisco Federal Reserve Bank, and Lucas Papademos, vice president of the ECB, highlighted the risks of at the annual meeting of the American Economics Association in San... (Forbes -- Business)
The $38 Billion Shadow Stimulus Jan 6, 2009
If inflation returns as the Federal Reserve increases the money supply, that cost of living increase could quickly be eaten away. A best-case scenario for Social Security recipients would be if deflation sets in. (Forbes -- Business)
Jumbo mortgage loan rates put damper on refinancing Jan 5, 2009
For example, the Federal Reserve Bank is purchasing huge amounts of mortgages and related securities, which industry officials said would result in even lower rates for conventional loans. The National Association of Realtors wants the Fed to do the same with jumbo loans. (Boston Globe)
The corruption of money Jan 5, 2009
The most important economic policymaker in the world, the US Federal Reserve chairman, Ben Bernanke, had to repeatedly make last-minute swerves to avoid collisions with out-of-control financial vehicles. Perhaps the most hair-raising was on March 14 last, when the decision to bail out the investment bank Bear Stearns, whose default and bankruptcy would have caused chaos in global credit markets, was made by Bernanke at 4am, just hours before the market opened. (Sydney Morning Herald -- Opinion)
Mortgage rates drop to historic lows Jan 5, 2009
With the Federal Reserve on the verge of pouring hundreds of billions of dollars into the devastated U.S. housing market, mortgage rates have plunged to the lowest level since Freddie Mac started tracking the data in April 1971 ... Interest rates have plunged since the Federal Reserve pledged last month to buy up mortgage-backed securities in an effort to bolster the long-suffering housing market ... With the Federal Reserve on the verge of pouring hundreds of. (San Francisco Chronicle -- Business)
Dow starts week on 2-month high Jan 5, 2009
The Federal Reserve will release the minutes Wednesday from its Dec. 15-16 policy-making meeting. At that meeting, the central bank lowered the federal funds rate to between zero percent and 0. (San Francisco Chronicle -- Business)
