Appealing to the Lowest Common Denominator – Election-year Politics and the Toll on Economic Policy – Themes on the Economy – by Diane Swonk, Chief Economist, Mesirow Financial
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China Just Raised Its Reserve Requirements Once Again – Joe Weisenthal – Heads up: The only central bank that matters anymore, the PBOC, just hiked reserve requirements once again. Bloomberg: The reserve requirement will increase 50 basis points effective Feb. 25, the People’s Bank of China said on its Web site today. The current level is 16 percent for big banks and 14 percent for smaller ones. – Money Game at Business Insider
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Guest Post: Will Obama Destroy Any Hope Of U.S. Energy Independence? – Guest Post Natural Gas Obama Administration Reality – Submitted by Charles S. Brant, Energy Correspondent, Casey Research – The U.S. consumes nearly three times the amount of oil that it produces domestically on a daily basis. How can this statistic get any worse, you might ask? Imagine in 2010 the Obama administration persuades Congress to pass a budget that results in a reduction of domestic oil production by 10% – 20%, making the supply/demand imbalance even more lopsided. Foreign oil companies will gain a distinct advantage over American domestic operators as an unintended consequence of these proposals. – Zero Hedge
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Fed Chooses To Try Unwind Via Eye Of Needle – Michael Pento – Planned interest rate hikes will fail to forestall inflation. . – Forbes
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Washington’s Snowfall Yesterday Was Nothing Compared to Bernanke’s On-Line Snow Job – by Gary North – Yesterday, the House Committee on Financial Services had scheduled hearings. Bernanke had been invited. He was a no-show. Congress was shut down. So, he posted his testimony. It is here. – Lew Rockwell.com
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Bernanke on the Fed’s balance sheet – James Hamilton – Federal Reserve Chair Ben Bernanke last week released a statement of how the Fed intends to manage its bloated balance sheet over the next few years. Here I offer my interpretation of what his plan involves. – Econbrowser
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Charges in Web Video Bring Unusual Rebuttal From F.D.I.C. – By SEWELL CHAN – All week long, officials at the Federal Deposit Insurance Corporation watched with growing dismay as a YouTube video ricocheted around the Internet. In 4 minutes 26 seconds, the clip asserted that the agency’s sale last year of the assets of the failed bank IndyMac to a group of private investors was a sweetheart deal. Finally, F.D.I.C. officials decided they had had enough. “It is unfortunate but necessary to respond to blatantly false claims in a Web video that is being circulated” about the creation of OneWest Bank out of the assets of IndyMac, the agency’s chief spokesman, Andrew Gray, said in a written statement late Friday. – NY Times
Original video with rebuttal update
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How Governments Hide Their Liabilities – by Donald Marron – Donald Marron Blog
In my testimony to the Senate Budget Committee the other day, I recommended that Congress set specific fiscal targets for bringing our out-of-control deficits and debt under control. … But as the New York Times points out in two articles today, a measurable target isn’t enough. You also need to make sure that the government doesn’t game the accounting to hide its liabilities.
Exhibit A is Greece.
Exhibit B are all the contingent liabilities of the United States government, of which Fannie Mae and Freddie Mac have been the most prominent (and expensive)
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Government looks to foreign SWFs to fund housing market – By Howard Schneider –
The Federal Reserve is set to halt its purchases of mortgage-backed securities at the end of March, and officials are counting on foreign sovereign-wealth funds to buy the securities and keep the housing market funded. – Washington Post
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In this issue of The Institutional Risk Analyst, we ask whether the Fed’s Zero Interest Rate Policy (ZIRP) isn’t driving global deflation. – Christopher Whalen
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Plan B? For the GSEs, There Might Not Even Be a Plan A – by PAUL JACKSON – February 1 came and went — was it 15 days ago already? That was when the Obama administration said it would proffer up some details as to its thinking for the future of the GSEs, Fannie Mae and Freddie Mac, to be part of the overall federal budget proposal. Instead, we got one measly sentence that managed to say nothing at all. – HousingWire