hussmanfunds.com - 3/23/2009
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March 23, 2009 Fed and Treasury - Putting off Hard Choices with Easy Money (and Probable Chaos) John P. Hussman, Ph.D. All rights reserved and actively enforced. Reprint Policy Last week, the Federal Reserve announced its intention to purchase a trillion dollars worth of Treasury debt by ...
econbrowser.com - 3/28/2009
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econbrowser.com —
A lot of people have seen this picture
of the recent behavior of the monetary base and...
wondered what it means. Figure 1. Adjusted monetary base. Source: FRED . To understand the explosion in the monetary base since September, ...
(more)
Money creation and the Fed
nakedcapitalism.com - 3/19/2009
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nakedcapitalism.com —
When some deemed the Fed's move today to
expand its balance sheet by as much as a...
trillion dollars plus as "shock and awe", I recalled that when that term was first used, at the beginning of the US invasion of Iraq. The notion was a display of ...
(more)
On the Fed's "Shock and Awe"
acrossthecurve.com - 3/24/2009
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acrossthecurve.com —
The Federal Reserve and the Treasury issued a
joint statement at 430PM New York time about the...
role of the Federal Reserve in the ongoing credit crisis. I am surprised that I have not seen any comments on this. JPMorgan economists entitled their ...
(more)
Federal Reserve and the Treasury Joint Statement
Comments
Blog Reactions
Hussmania
Technically Speaking, Market Analysis and Theory —
John Hussman says basically what I've said, although in much more explicit, economically-sophisticated prose. Default or debase, "inflate or die", it's all the same in the world of Mad Max Bernanke. ...
Monday morning links
The Mess That Greenspan Made —
TOP STORIES • US unveils $500 bln clean-out of toxic bank assets - AFP • U.S. lays out plan to attract buyers for toxic debt - Reuters • ING Seeks Return of Bonuses to Ease Taxpayer Anger - Bloomberg • AIG rivals met Bernanke to complain - Reuters • Putting off Hard Choices with Easy Money - Hussman Funds • The Big Takeover - Rolling Stone • In credit drought, U.S. car dealers battle to survive - Reuters • Japan's business sentiment deteriorates - MarketWatch MARKETS/INVESTING • ...
Monday links: a CLO to buy a CLO
Abnormal Returns —
... The toxic asset plan, “a CLO to buy a CLO.” (MarketBeat, Real Time Economics)
The stock market loves the toxic asset plan. Every one else pretty much hates it. Who’s correct? (Infectious Greed, Clusterstock, Market Movers, Curious Capitalist, Information Arbitrage, John Hussman, 24/7 Wall St., Zero Hedge, Free ...
The Pundits Strike Out
A Dash of Insight —
... The outlines of the plan have been known for weeks. The federal government is providing non-recourse loans to investors, allowing a high degree of leverage for those bidding on distressed assets. This removes the illiquidity stigma and provides an imbedded "put option" for new investors, as John Hussman notes here, and as we have predicted would occur. ...
Lunchtime Links 3-24
Rolfe Winkler —
... Putting off Hard Choices with Easy Money (John Hussman) “Ultimately, funding the bailout of lousy assets comes at the cost of debasing our currency and selling our good assets to foreigners.” ...
From Crony Capitalism To Geopolitical Mercantilism?
Daily Markets —
... Recently there have been many calls for bondholders and shareholders of troubled financials to bear the brunt of the crisis. As an example, John Hussman recently wrote: Make no mistake - we are selling off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses. We are using public funds to protect the bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses that should have been their own. All our policy makers have done to date has been to ...
Geithner's Plan Can Succeed
Mish's Global Economic Trend Analysis —
... On March 23, John Hussman discussed the bondholder writeoff situation in Fed and Treasury - Putting off Hard Choices with Easy Money (and Probable Chaos). ...
Stock Rally Built On Sand? FASB Can Help!
Daily Markets —
... essentially implies that the government would grant bidders a put option against 86% of whatever price is bid. This is not only an invitation for rampant moral hazard, as it would allow the financing of largely speculative and inefficiently priced bids with the public bearing the cost of losses, but of much greater concern, it is a likely recipe for the insolvency of the Federal Deposit Insurance Corporation, and represents a major end-run around Congress by unelected bureaucrats. (entire article). Great News! Housing Inventories Are High And Prices Keep Dropping! Before we ...
Stress test tension and the question of converting capital
FT Alphaville —
... conversion of preferred stock into common equity. Wells Fargo, for instance, reportedly plans to fill its near-$14bn shortfall through a $6bn secondary stock offering and earnings. Only if those fail will it consider converting preferreds into common stock. Bank of America, which needs the most capital, has explicitly said it won’t convert. Related links: US U-turn on tangible common equity - FT Alphaville Tangible common equity for beginners - The Baseline Scenario Fed and Treasury: Putting off hard choices with easy money - Hussman Funds
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On the heels of Britain’s failed debt auction today, our Treasury had its own trouble selling bonds. WSJ :
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