Currency Newswire » Central Banks

Is Bernanke Hiding A Smoking Gun?

admin — Thu, 01 Jul 2010 17:06:21 +0000

A Republican senator said Tuesday that documents showing Federal Reserve Board Chairman Ben Bernanke covered up the fact that his staff recommended he not bailout AIG are being kept from the public. And a House Republican charged that a whistleblower had alerted Congress to specific documents provide “troubling details” of Bernanke’s role in the AIG bailout.

Sen. Jim Bunning (R-Ky.), a Bernanke critic, said on CNBC that he has seen documents showing that Bernanke overruled such a recommendation. If that’s the case, it raises questions about whether bailing out AIG was actually necessary, and what Bernanke’s motives were.

Fed Made Taxpayers Junk-Bond Buyers

admin — Thu, 01 Jul 2010 16:48:08 +0000

Federal Reserve Chairman Ben S. Bernanke and then-New York Fed President Timothy Geithner told senators on April 3, 2008, that the tens of billions of dollars in “assets” the government agreed to purchase in the rescue of Bear Stearns Cos. were “investment-grade.” They didn’t share everything the Fed knew about the money.

The so-called assets included collateralized debt obligations and mortgage-backed bonds with names like HG-Coll Ltd. 2007-1A that were so distressed, more than $40 million already had been reduced to less than investment-grade by the time the central bankers testified. The government also became the owner of $16 billion of credit-default swaps, and taxpayers wound up guaranteeing high-yield, high-risk junk bonds.

Russia Buys 22 Tons Of Gold In May

admin — Wed, 30 Jun 2010 20:42:43 +0000

Ten days ago we reported the most recent data on gold reserve holdings as presented by the World Gold Council, where we pointed out that Russia had purchased 27.6 tons of gold in the most recent reporting period, bringing its total to 668.6 tons.

It appears Russia is only getting started. According to the latest IMF data, in the period between April and May, Russia added another 22.5 tons, bringing its May total to a fresh record of 703.1 tons. As BusinessWeek reports, Russia “has added gold every month since at least February.” At the same time, The International Monetary Fund’s gold holdings fell by 15.25 metric tons (490,286 ounces).

Time to Shut Down the Federal Reserve?

admin — Wed, 30 Jun 2010 04:44:11 +0000

Like a mad aunt, the Fed is slowly losing its marbles.

Kartik Athreya, senior economist for the Richmond Fed, has written a paper condemning economic bloggers as chronically stupid and a threat to public order.

Matters of economic policy should be reserved to a priesthood with the correct post-doctoral credentials, which would of course have excluded David Hume, Adam Smith, and arguably John Maynard Keynes (a mathematics graduate, with a tripos foray in moral sciences).

“Writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy.”

Don’t you just love that throw-away line “decent”? Dr Athreya hails from the University of Iowa.

The Fed Bashes Bloggers

admin — Tue, 29 Jun 2010 15:26:27 +0000

Some Fed economist (with a hard-earned Ph.D mind you) named Kartik Athreya (who lasted at Citigroup as an associate Vice President for a whopping 7 months before getting sacked in 1998 only to find solace for his expiring unemployment benefits in the public sector) has written the most idiotic “research” piece to come out of the Federal Reserve since 1913, and the Fed has written a lot of idiotic research since then – after all you don’t destroy 98% of the dollar’s purchasing power in 97 years with non-idiotic research.

But this just takes the cake. In “Economics is Hard. Don’t Let Bloggers Tell You Otherwise” Kartik says: “I argue that neither non-economist bloggers, nor economists who portray economics —especially macroeconomic policy— as a simple enterprise with clear conclusions, are likely to contribute any insight to discussion of economics and, as a result, should be ignored by an open-minded lay public.”

Alas, all Kartik achieves is to convince the general public that feeding Fed “economists” alcohol after midnight and letting them directly upload their resultant gibberish to the Fed’s broad RSS feed the second they think they have a coherent thought, is generally a disastrous idea.

Fed’s Warsh Wary of Further Asset Purchases

admin — Tue, 29 Jun 2010 03:28:19 +0000

The Federal Reserve should be wary of the short-term allure of further asset purchases, said Fed governor Kevin Warsh on Monday.

In a speech in Atlanta, Warsh set a high bar for his support of further asset purchases, saying he would need to be convinced the benefits of the purchases would outweigh the costs of “erosion of market functioning, perceptions of monetizing indebtedness, crowding-out of private buyers, or loss of central bank credibility.”

The Fed has bought over $1 trillion in housing-related assets to keep long-term market interest rates low and support the recovery. The purchases ended in March.

Strongest Yuan Rate in Years

admin — Tue, 29 Jun 2010 03:24:24 +0000

China set the strongest yuan exchange rate in years yesterday after Beijing came under renewed pressure at the Group of 20 summit over the weekend to let the currency appreciate.

The People’s Bank of China said it set the central parity rate – the centre point of the currency’s allowed trading band – at 6.7890 to the dollar, a fraction of a per cent stronger than Friday’s 6.7896.

China Liberalises RMB Trade Settlement

admin — Tue, 29 Jun 2010 03:21:31 +0000

Geographic restrictions on China’s year-old renminbi cross-border trade settlement pilot scheme have been lifted, a move that is in line with the country’s push to slowly internationalise its currency.

Trade transactions from anywhere in the world can now be settled in renminbi under new rules announced by the People’s Bank of China, the country’s central bank, and other regulatory agencies last week. Previously only deals between companies in Hong Kong, Macau and select Asean (Association of Southeast Asian Nations) were allowed with mainland designated enterprises (MDEs) in five cities. The new rules also allow export transactions to be conducted from 20 provinces and municipalities.

Central Banks Warn of New Crisis

admin — Tue, 29 Jun 2010 03:17:33 +0000

Governments must slash budget deficits decisively and central banks should not wait too long to raise borrowing costs as side effects from measures prescribed to tackle the global recession may create the next crisis, the Bank for International Settlements said.

The global economy as well as financial markets were on the mend, though the recovery remained fragile in the advanced economies and in the euro zone the debt crisis put the recovery at risk, the BIS said in its annual report, published on Monday.

Are Southeast Asia central banks ready to raise rates (MalaysiaNews.net)

admin — Thu, 04 Mar 2010 20:10:31 +0000

SINGAPORE: Asian central banks may be among the first in the world to raise interest rates as regional economic growth rapidly outpaces that in the West and fuels inflationary pressures, according to …

Are Southeast Asia central banks ready to raise rates? (The Edge)

admin — Thu, 04 Mar 2010 20:10:30 +0000

Central Bank expands as other banks struggle (Stillwater Gazette)

admin — Fri, 26 Feb 2010 04:40:52 +0000

Bad news for banking has good news for Central Bank of Stillwater.

Bernanke Defends Fed’s Ability to Supervise Banks (New York Times)

admin — Fri, 26 Feb 2010 04:40:52 +0000

The Federal Reserve chairman, Ben S. Bernanke , urged senators on Thursday not to strip the central bank of its authority to supervise the country’s largest banks, warning that to do so would pose a “grave risk,” The New York Times’s Sewell Chan reports from Washington.

European Central Bank Keeps Interest Rate at 1 Percent

admin — Mon, 06 Jul 2009 00:41:17 +0000

The European Central Bank left its benchmark interest rate unchanged at 1 percent as it waits to see whether a massive infusion of credit into the banking system will help the euro zone’s struggling economy.

Markets and analysts will be looking to Thursday’s remarks by bank President Jean-Claude Trichet about the ECB’s $623 billion in 12-month loans offered to banks last week, its biggest ever, and what it augurs for the 16-nation euro zone in a bid to try to keep cash flowing to, from and between banks. Read more…

N.Y. Fed’s Chief Backs Preemptive Crisis Moves

admin — Mon, 06 Jul 2009 00:39:07 +0000

The Federal Reserve should break with past policy and try to identify and deflate asset bubbles before they can damage the U.S. economy, New York Federal Reserve President William C. Dudley said.

While interest-rate policy may not be the appropriate tool for popping bubbles, Fed officials have “other instruments in their toolbox,” Dudley notes in the text of a speech scheduled for July 26 at the Bank for International Settlements in Basel, Switzerland. The New York Fed released his remarks yesterday. Read more…

Israel Cabinet Approves Law to Reform Central Bank

admin — Mon, 06 Jul 2009 00:35:26 +0000

Israel’s cabinet approved a draft of a law on Sunday that would overhaul monetary policy and other decision-making by the Bank of Israel, the finance ministry said.

The law was submitted by Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz.

It has been in the works since Netanyahu was prime minister the first time, in the 1990s, and is aimed at strengthening the central bank’s independence. Read more…

Sri Lanka’s Need for IMF Wanes: Central Bank

admin — Mon, 06 Jul 2009 00:33:21 +0000

Sri Lanka’s central bank chief said Saturday that the island could live without a major IMF bailout that had been delayed by the final stages of the government’s fight with Tamil Tiger rebels.

The government had requested the 1.9-billion-dollar loan in March to help stave off its first balance of payments deficit in four years after foreign currency reserves fell to around six weeks’ worth of imports.

The loan was delayed under political pressure from the United States, Britain and other countries who felt the government was not doing enough to avoid civilian casualties as it closed in on the remnants of the once-powerful Tamil Tiger army. Read more…

Yuan Use to Increase

admin — Mon, 06 Jul 2009 00:31:11 +0000

THE PHILIPPINES may be next in a growing number of countries that have lessened their use of the US dollar, which has lost its luster as the world’s most reliable currency, the central bank said.

While it may not replace the US dollar, the Chinese yuan may soon share prominence on the global stage as more countries diversify their currency holdings to shield themselves from the volatility similar to that exhibited by the greenback at the height of the subprime-mortgage-turned-global economic crisis. Read more…

Putin Orders Banks to Boost Lending, Sees Deficits

admin — Mon, 29 Jun 2009 18:07:19 +0000

Russian Prime Minister Vladimir Putin told state-run banks to expedite loans to companies to help stem a financial crisis that will force the government to run deficits for at least three years.

Putin called on banks such as OAO Sberbank and VTB Group to boost lending by as much as 500 billion rubles ($16 billion) by October. The government will guarantee 300 billion rubles of the total, he said.

“The government expects that banks will consistently expand lending for the priority industries and reduce borrowing costs,” Putin said today on state television. Read more…

UAE Banks Have ‘Significant’ Exposure to Troubled Saudi Banks

admin — Mon, 29 Jun 2009 18:04:33 +0000

UAE banks have ‘significant’ exposure to Saudi Arabia’s troubled Saad Group and Algosaibi conglomerates, the UAE central bank governor was quoted as saying today by Reuters. Read more…