Fed’s Duke sees low rates for “extended period” – David Lawder – The Federal Reserve sees a moderate economic recovery continuing in 2010, but needs to keep interest rates “exceptionally low” for an “extended period” to foster job growth, a Fed policymaker said on Monday. Fed Governor Elizabeth Duke told an economic forum that slack in the economy was likely to remain above historical norms for some time, helping to keep inflation subdued. – Reuters
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I Know What Keeps Obama Awake at Night – Submitted by madhedgefundtrader –
While Obama relaxes in Hawaii, sipping Mai Tai’s adorned with little umbrellas and hooking up with distant relatives, a potential nightmare is giving him sleepless nights. Let’s say we spend our $2 trillion in stimulus and get a couple of quarters of decent growth. The “V” is in. Then once the effects of record government spending wear off, we slip back into a deep recession, setting up a classic “W.” Unemployment never does stop climbing, reaching 15% by year end, and 25% when you throw in discouraged job seekers, jobless college graduates, and those with expired unemployment benefits. This afflicted Franklin D. Roosevelt in the thirties. … – Zero Hedge
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SS Trust Fund – 2009 Full Year Results – Ugh! – Submitted by Bruce Krasting – The 2009 calendar year numbers for the Social Security Trust Fund are in. These numbers confirm that the Fund is badly off track. Is there a fix to this systemic problem? – Zero Hedge
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Did the Fed Buying MBS Make a Difference? – Posted by Mark A. Calabria – … According to a new study by Stanford University Economists Johannes Stroebel and John Taylor the Fed did not. More specificially, the professors “find that the MBS program has no significant effect. Movements in prepayment risk and default risk explain virtually all of the movements in mortgage spreads.” … – Cato @ Liberty
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No Good Deed Goes Unpunished as Banks Seek Profits – PPIP punished? articles implies that banks buy (not sell) more yucky paper hoping to profit from PPIP. – not PPIP’s original intention (BC) – Bloomberg
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PPIP … Even Worse Than I Thought – By George Washington – PPIP [the Public-Private Investment Program] is a massive wealth transfer from taxpayers to investors and banks, and that Treasury funds are being used to sidestep Congress and their constituents – the American people. … – Washington’s Blog