"In June of each year the Social Security Trust Fund (SSTF) reinvests a significant portion of its investment portfolio in newly issued Special Issue Treasury Securities. The interest rates on these bonds is set by a formula that was established in 1960. The formula was designed to insulate the SSTF from transitory changes in interest rates by averaging market based bond yields over a three-year period. Read below the fold...
Commenter Jackrabbit on Matt Stoller's piece at Yves' place about the problematic process of crafting Dodd-Frank*:
Yes, it is interesting and instructive that the Obama Administration found the courage to fight for Bernanke (“Subprime is contained”) vs. the lack of interest to fight for Warren.
We’re not suppose to make these connections. It’s “settled business” as some dimwit recently commented the other day when castigating Yves because she wouldn’t STFU about Warren.
Matt Taibbi has a link to a priceless animated cartoon by ZERO HEDGE. It is a must see. Two Bears explain what Ben Bernanke (They call him The Ben Bernank) is up to in doing this "quantitative easing" deal. The bears say QE is "printing a ton of money". But Taibbi thinks the big deal is the continual funneling of money to Goldman Sachs. Watch the two bears and you will finally understand what is going on and it's not pretty.
Today I was planning on a post about Quantitative Easing (QE), because it seemed to me that it would never work. However, today, Randy Wray beat me to it with another great post, this time at ND20, reviewing the whole situation in detail, placing it in political context, and explaining why it's very unlikely that it will allow the economy to recover much more than it has already. Here are some key quotes from Randy's piece. Read below the fold...
The G20 has dropped its support for fiscal expansion. The deficit hawks are prevailing. But why is that? We all either know or should know that operationally Federal spending is not constrained by revenues, as Chairman Bernanke stated last year, when asked on '60 Minutes' by Scott Pelley where the funds given to the banks came from:
"...we simply use the computer to mark up the size of the account that they have with the Fed."
We know that when the Fed spends on behalf of the Treasury it simply credits a member bank or foreign government's reserve account at the Fed. Read below the fold...
The purpose of the President's recently constituted National Commission on Fiscal Responsibility and Reform as stated in Section 4 of the President's Executive Order establishing the Commission is: Read below the fold...
Bernie Sanders has used a bit of Senate finesse to block the renomination of Ben Bernanke to head the Federal Reserve. Chris Bowers over at Closed Left explains what's happening, but what it all boils down to is that Sanders has managed to hold up the renomination of one of Bush's creatures to a hugely important office. Obama and Wall Street want Bernanke to stay and keep fucking up the economy. Sanders is looking like one of the only senators willing to go on record and try to stop this from happening. Read below the fold...
The President has reached his decision on Afghanistan, and given his speech. There’s nothing much that can be done about this military escalation issue right now. It may make you feel better to gripe, kvetch, and moan on the tubez about the Afghanistan policy, but there are two big events coming up in the next 48 hours that perhaps we can still impact. President Obama’s jobs summit, in honor of which I've blogged an infrastructure repair and building program of oh, around 19 million new jobs.
And the confirmation hearing to re-appoint Ben Bernanke as chairman of the Federal Reserve System, before the Senate Banking Committee.
Do you want to try and make a difference? Then NOW is the time to raise a mighty shout across the land. Read below the fold...
This, by the way, was buried deep in the biz section of the WaPo web site, but it was front and center on the print edition, a copy of which I managed to get my hands on today. Just so you know what the federal government was reading today.
If I were willing to spend the time, I'd have photoshopped his head onto Jamie Bamber's body. In *that* scene. BSG fans know what scene I am talking about.
The New Yorker on Bernanke's debacle. There are many, many incidents that give one pause, but this one stands out for me:
The other event that changed Bernanke’s career occurred in the summer of 1999, at the height of the Internet stock boom, when he and Gertler were invited to present a paper at an annual policy conference organized by the Federal Reserve Bank of Kansas City. The topic of the conference—which takes place at a resort in Jackson Hole, Wyoming—was New Challenges for Monetary Policy. Then, as now, there was vigorous debate among economists about whether central banks should raise interest rates to counter speculative bubbles. By increasing the cost of borrowing, the Fed, at least in theory, can restrain speculative activity and prevent the prices of assets such as stocks and real estate from rising excessively.
"When the final report on the risks of the US financial system is released in 2010 — and it is likely to cause a stir internationally — only one of the people in positions of responsibility today will still be in office: Ben Bernanke."
I have to watch the election from a distance, the Potemkin village that is our political system is no longer funny or charming. Who the next President is, is largely irrelevant. Why such a negative disposition? Read below the fold...
