Ben Bernanke, Improvisor

A must read piece is in the upcoming June 2008 Bloomberg Markets Magazine titled: The Improviser

"Ben Bernanke, the consensus-building academic who toiled in Alan
Greenspan’s shadow, is emerging as the most powerful–and
inventive–Federal Reserve chairman in the 95-year history of the
central bank. Paul Volcker says he’s overreaching . . .

From Bernanke’s standpoint, there are two major lessons to be learned from the Fed’s reaction to the market crash of 1929 that are relevant today. The first is that the Fed should lower rates, not raise them, in the face of an economic contraction. The second is that the Fed must pay careful attention to the health of financial institutions, as lending plays a big role in economic growth.

In July 1928, when financial markets were still booming, the Fed raised its benchmark interest rates to 5 percent, the highest since 1921, effectively cutting the money supply, in order to reduce what it saw as excess speculation on Wall Street. It did so even though there were no signs of inflation, Bernanke said at the conference honoring Friedman. In October 1931, after the market crashed and GDP had begun to nosedive, the Fed raised rates again to prevent the dollar from falling in international markets. That made it harder for companies and individuals to borrow even as the economy was contracting 30 percent and deflation was setting in. A series of bank failures further reduced credit throughout the economy."

Go read the full piece now . . .


Source:

The Improviser
Steve Matthews
Bloomberg Markets Magazine June 2008   
http://www.bloomberg.com/news/marketsmag/mm_0608_story2.html

Category: Credit, Federal Reserve, Inflation, Markets

Lowest NYSE Volume of the Year

Category: Markets, Technical Analysis, Trading

NYPost: $15 Million Hamptons Foreclosure

Category: Finance, Real Estate

Baltic Dry Index Approaching Old Highs

Category: Commodities, Technical Analysis

What Does Boating Tell Us About the Economy?

Category: Commodities, Consumer Spending, Credit, Retail

T. Boone Pickens on Oil Prices, Trading, Wind Power

On Bloomberg (via Paul), comes this  very good video interview with T. Boone Pickens on Oil, Natural Gas, Trading — and Wind Power.

 

Boone at 2008 Milken Conference
(click for video)



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Good stuff.

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Source:
Boone Pickens Says He Is Ready to Bet on Wind Power
Bloomberg, April 29 2008
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8Roxzn8p.bI

Read More

Category: Energy, Video

Cognitive Surplus, Part II

A few weeks ago, we discussed the Clay Shirky’s concept of cognitive surplus.

Here’s the original video of that discussion:

Category: Psychology, Video

Comments, Trolls, Asshats

One of the things I try to do with the site is maintain a high level of discourse between myself and the readers. As the traffic to the site has ramped up, we have attracted more political wankers, trolls, asshats than is conducive to intelligent conversation. This post is a reminder as to how I…Read More

Category: Weblogs

When Should the Fed Bailout the Economy?

Category: Credit, Economy, Federal Reserve, Inflation, Politics

Stiglitz on the Economy

 

Click for video

Sources:
Stiglitz Says Bank Executives Too Optimistic About End to Rout

Mark Deen and Paul George
Bloomberg,  April 30 2008
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a68mzM58.R84

Read More

Category: Economy, Video