Silicon Valley Bank and the Regulators
One question that has come up is whether this was a failure of regulation. Stanford Prof. John Cochrane is a proponent of this idea. I don’t find his arguments persuasive. Continue Reading →
Tag Archives: federal reserve
Silicon Valley Bank
On March 10, Silicon Valley Bank was closed by the FDIC. The main cause was an incompetent management team that wasn’t interested in banking. Continue Reading →
RIP Herman Cain
Here’s a short explanation of where Herman Cain fit in the Federal Reserve system. President of the Kansas City Fed is not an easy job. Continue Reading →
Stephen Moore, Herman Cain, and President Trump Are Wrong About the Gold Standard
President Trump was considering nominating Stephen Moore and Herman Cain to serve on the Board of Governors of the Federal Reserve system. All three men support a return to the gold standard for U.S. monetary policy. Here’s why they’re dead wrong. Continue Reading →
Hey, Janet, How’s That Interest Rate Increase Working Out?
But the real problem is that the Fed has not understood why banks are holding all those reserves. There are two reasons. First, there is incredible risk aversion caused by the random, frequent regulations and lawsuits emanating from the Obama administration. Second, there is the small matter of loan demand. Banks are holding reserves because they don’t see demand for loans whose return is worth the risk. The only way loan demand will increase is for the economy to ascend to a decent growth rate. Until that happens, the Fed should just give up. Continue Reading →
Let’s See If The Fed Can Make It Stick
The Fed has spoken. The new target rate for the Federal Funds rate will gradually rise to between 0.25 and 0.50 percent. I wrote extensively about this yesterday. It will be interesting to see whether the folks at the Board of Governors can make this rate increase stick. Continue Reading →
I Was Wrong About ZIRP
Not, mind you, because the Fed will raise interest rates any time soon. No, the geniuses at the Federal Open Market Committee and the Board of Governors seem to be leaning in a different direction: NIRP. … Better get used to seeing those initials. They stand for negative-interest-rate policy. That’s right. The Fed thinks they can drive nominal short-term interest rates below zero. Continue Reading →
The Forever ZIRP
A two percentage point increase in the interest rate would double the U.S. government budget deficit. Continue Reading →
Monetary Policy is Like Pushing on a String
Average annual growth rates of M1 and M2 are in the 6% – 8% range. Reserves have averaged 215.25% per year. Reserves are not being loaned. And until lending picks up the Fed might as well close up shop. Continue Reading →
The Curious Case of the Missing 105 Billion Dollars
The Russians did it. Their holdings were large enough and the timing is too good to be a coincidence. I realize I am committing a cum hoc ergo propter hoc fallacy. Go find the data to convince me I’m wrong. Continue Reading →