nakedcapitalism.com - 12/10/2008
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The Wall Street Journal, in a typically anodyne bit of reporting, tells us that the Fed is considering selling its own debt to finance its balance sheet, Its good old buddy, the Treasury Department, which heretofore has been selling bills in part on behalf of the Fed, now has a big enough ...
federalreserve.gov - 12/16/2008
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federalreserve.gov —
Release Date: December 16, 2008 For immediate release
The Federal Open Market Committee decided today to establish...
a target range for the federal funds rate of 0 to 1/4 percent. Since the Committee's last meeting, labor market conditions have ...
(more)
FRB: Press Release--FOMC statement--December 16, 2008
econbrowser.com - 12/16/2008
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econbrowser.com —
Today's announcement from the Federal Reserve marks the
end of the road for Plan A (fighting the...
recession by lowering interest rates), and the beginning of ... what? The Fed's announcement begins : The Federal Open Market Committee decided ...
(more)
Quantitative easing
blogs.wsj.com - 12/17/2008
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blogs.wsj.com —
Federal Reserve held a media conference call after
today’s Federal Open Market Committee meeting, a unusual move...
that allowed reporters to receive some explanations for the Fed’s move today. The Fed’s ground rules allowed news organizations to ...
(more)
Real Time Economics : The Fed Speaks: More on Today's ...
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Further reading
FT Alphaville —
... Lather. Rinse. No repeat. - After months of serial bailouts, proliferating new programmes, and soaring and swooning markets, the notion of the Fed selling its own debt no doubt sounds like a mere footnote to recent events. - “When an email appears with the subject line, “American Soldiers punished by naked shorting,” ...
The Fed’s very own bonds?
FT Alphaville —
... - it might actually offer some interesting incentives to foreign investors. It would also allow the Fed to indirectly backstop the dollar, or at least curb its massive devaluation. Issuing foreign currency-denominated Treasury-style debt could also reduce the perceived risk of holding US debt, increasingly important as CDS spreads widen and Treasury yields go negative. Related Links: Fed ponders issuing debt to financing its mushrooming balance sheet - Naked Capitalism ...
Federal Reserve Bills/Notes/Bonds ?
self-evident —
... province of the Treasury Department, and the Fed already can print as much money as it wants. But as the credit crisis drags on and the economy suffers from recession, Fed officials are looking broadly for new financial tools.
The WSJ article explains what the Fed is trying to do, but not why. And on that question, there is an awful lot of nonsense in the blogosphere today.
Just for example because I am in a bad mood, the usually excellent Naked Capitalism goes off the deep end:
Jesse takes a very dim view ...
National debt to gdp ratio...
Angry Bear —
rdan hat tip Z Facts. Yves provides added links and comment here at Naked Capitalism: But as usual the Fed surprises us all with their lack of transparency. They are asking Congress about permission to issue their own debt directly, not tied to Treasuries. This is known in central banking circles as 'cutting out the middleman.' Not only does the Treasury no longer issue the currency, but they also no longer have any control over how much debt backed currency the Fed can now issue directly. If the Fed were ...
The Fed’s asset-liability mismatch
FT Alphaville —
... would it help in the scenario recounted above, but it would also help it drain some of the liquidity that’s been injected into the system. In other words, while the move might sound ominous, it’s actually a way of destroying the inflation potentially caused by that asset-liability mismatch. Interesting. Related links: Bernanke’s balance sheet - FT Alphaville Convexed - FT Alphaville Fed seeks to issue own debt to soak up excess liquidity - The Market Oracle Fed ponders issuing debt to finance its mushrooming balance sheet - Naked Capitalism Mortgage ...
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