The Fed knew about the housing bubble before it burst but lied and said they didn't: Bill HR 1424 to buy bad paper (eventually called TARP) was introduced in March 9, 2007, before there began to be bad commercial paper from private subprime RE loans, in August. I have published on two other ...
more The Fed knew about the housing bubble before it burst but lied and said they didn't: Bill HR 1424 to buy bad paper (eventually called TARP) was introduced in March 9, 2007, before there began to be bad commercial paper from private subprime RE loans, in August. I have published on two other prominent financial websites, Seekingalpha.com (as Gary A) and at Businessinsider.com. I muckrake the banking system and found premeditated causes for the housing bubble and subsequent meltdown. I am married with 4 grown children.
Specialties: Impacts of politics on the economy, interpreting economists, writing about the negative impact of some aspects of globalization and pros and cons of the new normal. I don't like tariff wars. Email bgamall at gmail
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Latest Comments
What If 'Excess Reserves' Aren’t Really Excess?
Whether folks agree with all the conclusions or not, this is a must read, worthwhile article. It may explain why the ECB stopped paying interest on reserves and why the Fed should do the same. But if the Fed stops paying interest on reserves, some will be fooled into thinking bank lending may increase.
Permanent Recession For Italy?
Pritchard has it right. Mainstreet Europe needs money, in the form of helicopter money. The other tools of the ECB seem to be too weak.
China (Partly) Answers For Why Markets Are Forecasting Even More Powell Rate Cuts
Great article. But, historically, the Fed is slow to cut. It would be admitting that it misread the economy or the world economy in December, 2018. That was the month in which it raised rates while GDP growth was falling off a cliff.
Recession? Yes, But Not Yet
Very interesting chart. But it will likely depend on the Fed. The ECB is talking about lowering rates. The Fed is not there yet.
Even I Am At A Loss To Describe This
Entertaining. And really, the ECB was bold in stopping the payment of IOR. And yet, taking payment for parked reserves didn't get the banks to lend either. This is a classic, classic example of the need for helicopter money. People either don't want to borrow or the banks are fearful of lending or both.
Monthly Macro Monitor: Well Worried
Interesting article. Tim Duy says recession in 6 months if the Fed does not lower rates, admitting the December hike was wrong. Of course it is unlikely the Fed will admit to anything.
The Bank Of Canada Engineers A Recession By Curtailing Credit
So, the question, prof, is whether this will turn into a soft landing or hard landing. Maybe Canada has more success than the USA, I don't know.
Janet Yellen Suggests Strengthening The ‘Fed Put’
Great chart of US federal debt being so high before a recession, Jesse! Yellen just does not get it. If the Fed did buy stocks and corporate bonds, perhaps the companies would feel confident in expanding but what if they didn't? Helicopter money will help the economy. There is no guarantee that buying stocks and corporate bonds will do anything but exacerbate the wealth divide.
Recession Lurks. What Will The Fed Do?
Good point. But the yield curve did not really invert before. A recession is not a guarantee. It is just a large risk made worse by Fed behavior as pointed out by Norman. Add that the Fed likely will not admit a December mistake, and therefore will not lower rates and a recession most likely will happen. Will the leopard change its spots?
China's C919 Poses Major Threat To Boeing's Dominance
We have a good safety record. But China will become the most powerful economy in the world and the people will demand safety.