Ben Bernanke talks to the Economic Club of New York, well worth watching!
Federal Reserve news
The Federal Open Market committee (FOMC) have decided to keep ‘exceptionally low levels of the federal funds rate for an extended period’. Below is a verbatim excerpt:
“Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some …
Bill Gross of Pimco talks to Bloomberg
Bill Gross of Pimco talks to Bloomberg, Bill manages the largest bond fund in the world, he is an insightful commentator and a successful practitioner. Every time bill has something to say most of the financial world listens.
Nouriel Roubini, Bill Gross & Warren Buffett.
Nouriel Roubini talks to TechTicker and also comments on some of the things Bill Gross of Pimco has been saying about the economic crisis.
In the second video Roubini talks about how long he believes the recession will last, he is now saying it will be a 36 month ‘U-shaped’ recession. His bearish views are getting gloomier by the day, however, it is important to remember that he has been on the money in his forecasts so far.
Nouriel Roubini, Bill Gross & Warren Buffett.
Nouriel Roubini talks to TechTicker and also comments on some of the things Bill Gross of Pimco has been saying about the economic crisis.
In the second video Roubini talks about how long he believes the recession will last, he is now saying it will be a 36 month ‘U-shaped’ recession. His bearish views are getting gloomier by the day, however, it is important to remember that he has been on the money in his forecasts so far.
Jim Rogers, David Frost interview
Jim Rogers talks to Sir David Frost about the role of Government and Central Banks in the current crisis, he believes that the ethos of ‘not letting anybody fail’ actually magnifies problems because doing this means the bubble continues to inflate far beyond the size it would have done otherwise.
Jim has a very simple and straightforward way of explaining things that make him ever popular, although some of the medicine he prescribes is considered quite harsh. His point about letting the market do what it must is of the libertarian strain and for all anybody knows, he may be right (right as in ‘correct’ not as in ‘wing’), if so then everything being done to counteract the crisis is the inverse of what we should be doing.
Automakers bailout is a mistake
Banks, in my opinion, should not have been bailed out, they are a business like any other and when people talk about the ‘systemic risk’ a failure represents they should remember that up until recently banks historically did fail and the world didn’t end. During the Great Depression many banks failed, if depositors are protected – and the FDIC was created due to the lack of deposit protection- then that is about all one can reasonably hope for. To falsely prop up any business that has failed is generally a mistake and will only lead to further bailouts down the line . On the same note: IndyMac failed and the world didn’t end, Lehman Brothers failed, the world didn’t end, Fannie Mae and Freddie Mac ultimately failed and the world didn’t end, the idea is to sell enough fear to justify a bailout at any expense.
Automakers in the USA are a good …
Bernanke speaks about the future of mortgages
This is a fascinating overview of the future of mortgage securitization from Federal Reserve Chairman Ben Bernanke, he talks about some of the issues of the past as well as some of the solutions for the future – it’s a ‘must see’ for financial professionals.