In April 2013, Janet Yellen gave a speech still as the Vice Chair of the Federal Reserve. Her topic was communication, fitting in that it was given to the Society of American Business Editors and Writers. She expressed the evolution in Fed policy as it had changed since the more direct if silent beginnings in the early 20th century. Not [...]
What I set about to demonstrate in Part 1 was the visible spectrum of the wholesale system. In other words, you can see balance sheets grow and distort, with money dealing along with it, but that doesn’t cover the full dimensions on how and why credit production, especially through securities, bloomed as it did. This is, in many ways, the [...]
I often write about the rise and fall of the eurodollar standard in very abstract terms, largely because most of what occurs there is hidden, opaque and/or terribly abstract. The difficulty is in trying to define and describe “money” under just such a pliable system, a task not easily solved by current conventions. For instance, it was the trend in [...]
What happens at the quarterly window dressing periods for the domestic banking system (which includes foreign subsidiaries chartered for US business) is essentially a gaming of the leverage ratios. As with everything inside the Basel paradigm, banks make themselves look less risky for their reporting periods. In terms of funding markets, that means massaging short-term liabilities, particularly repo. To do [...]
Stay In Touch