Another possible draining strategy – Fed Discusses Limited Bond Sales to Withdraw Stimulus – By Craig Torres – Federal Reserve officials are considering a proposal to schedule limited sales of bonds from the central bank’s $2.2 trillion balance sheet as part of a range of tools for withdrawing record monetary stimulus. … “Here is the worry: What if they try to tighten and they lose control of the federal funds rate?” said Mark Spindel, chief investment officer of Potomac River Capital LLC in Washington … – Bloomberg
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Malkiel: Market Risk-Taking Must Be Restrained – By Burton Malkiel – We have not come to grips with “the fundamental fallacy of the too-big-to-fail doctrine,” writes the long-time stock market watcher – BusinessWeek
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Neel Kashkari’s Quiet Path to Pimco – By DEVIN LEONARD – … “Kashkari brings a great deal of potential benefit to Pimco in terms of government knowledge and connections to both parties,” said Douglas J. Elliott, a Brookings Institution fellow and former managing director at J.P. Morgan. “He understands what the government is likely to do and has a good understanding of the financial sector. So I can really see why Pimco would want him.” … – NY Times
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Populism? – Move Your Money: A New Year’s Resolution – Arianna Huffington and Rob Johnson – … The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it’s meant to be. It’s neither Left nor Right … – Huffington Post
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Trimming the lifelines – Government intervention in the economy most likely prevented a worse recession. But the Obama administration should articulate an exit strategy. – LA Times Opinion
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Larry Doyle’s 2009 Market Review – looks at 2009 markets with a hint of 2010 – Sense on Cents
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KD’s Year In Review: Part II: Trade of the Year – Kid Dynamite – … The greatest trade of the year was the one that best personified all the Ponzi values we embrace: the Fed’s Temporary Liquidity Guarantee Program (TLGP) … In layman’s terms, the TLGP utilized one insolvent institution (the FDIC) to guarantee the debt issued by a bunch of other insolvent institutions (the big banks and pseudo banks). Jackpot! Marty Up! … – Kid Dynamite’s World
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What’s the United States Worth? $1.4 Quadrillion – by Donald Marron
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uh-oh – E-mails inside AIG reveal executives struggling with growing crisis – By Brady Dennis – Washington Post