The Implications of Velocity – …And now we come to the policy conundrum for the Fed. They have pumped a great deal of money (liquidity) into the economy. Normally, banks would take that money and multiply it by lending it out (through fractional reserve banking at a potential 9-times factor), increasing velocity and the overall money supply. … But today bank lending is still falling at an average of 15% annually, so far this year. But what if that trend stops? … – John Mauldin’s Frontline Thoughts
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Deflation? – M1 Money Multiplier Still Crashing: Each $1 Increase in Monetary Base Results in Only 79 Cent Increase In Money Supply – George Washington – ZeroHedge
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The Best Deficit Chart Ever – plus fantastic comment – Casey’s Daily Dispatch
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good consumer article – Program’s end to affect interest rates – By Alan J. Heavens
– The Fed will no longer buy mortgage-backed securities from Fannie Mae and Freddie Mac. – Philadelphia Inquirer
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Freddie Keeps Tax Credits, Focuses on Preservation – By Jerry Ascierto – … Throughout 2009, rumors abounded that both government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae were trying to sell parts or all of their low-income housing tax credit (LIHTC) portfolios. The rumors sent chills through the affordable housing industry, given how dramatically the prices of LIHTCs had fallen. … - Affordable Housing Finance at Housingfinance.com
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Credit Feast And Famine – Steve Hanke – Why isn’t the economy booming? The Fed’s high-powered money isn’t going into bank deposits and loans to businesses and individuals. – Forbes
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Forest for the Trees… – … What seems frightening about the compression of credit spreads is that we seem to completely forget the past. The post Lehman collapse has no parallel besides the great depression, but it seems that we all have forgiven past financial sins and debt burdens. The overhanging question remains: how will the debt be paid for? … – Surly Trader
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Rating Agencies: Muni bonds next? – Nick Gogerty – Ratings game change. A disturbance in the force? – The ratings agencies are the fell as whose opinions on CDO’s and other quant-crap led most of America’s financial elite to delude themselves into believing in the pixi dust of securitisation (obfuscation) and endless home price appreciation. – Designing Better Futures
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Krugman & Kudlow agree: Inflation on the way – Kurt Brouwer – regarding Janet Yellen and Fed – … Krugman and Kudlow seem to view this appointment in a very similar light, that she will not be fighting inflation. Krugman likes that and Kudlow does not. Nonetheless, having these two economists and pundits in agreement on anything is rare indeed. … – MarketWatch