Mind Over Market

At Bernanke's behest, in response to early tremors foreshadowing the financial crisis, Federal Reserve board members and staff engaged in  a process of idea generation and brainstorming. The effort was aimed at finding creative ways to provide emergency short-term lending and guarantee programs to extinguish the potential fires of financial panic and restore collapsed financial markets.  This blue sky thinking was well underway by September 2007 and prepared the Fed for what Bernanke calls "the dark abyss" at the height of the panic and pushed the limits of the Fed's authority in the bailouts of Bear Stearns and AIG.  By Robert Stowe England October 30, 2015 Before former Federal Reserve Chairman Ben Bernanke came up with an array of lending facilities to put out the fires of financial panic that broke out in 2007, he laid the groundwork inside the Fed with a brainstorming effort he called blue sky thinking. “We had ongoing conversations that were like a doctor...

By Yusuke Horiguchi October 7, 2014 1. In a systemic financial crisis, strong forces of contagion--a virulent form of negative externality--put even the solidest financial firms with no faults of their own at serious risk, because of other firms' plight. This is a notorious example of market failure, providing a justification for public intervention aimed at preventing the financial system's collapse, typically involving taxpayer money. This is a standard economic analysis, widely accepted, at least at this level of generality, and with a straightforward prescription on the general direction of policy to be followed when coping with severe system-wide financial stresses.  It needs emphasis, however, that the prescription is applicable only to systemic crisis situations.  2. The situation of September 2008 and the ensuing few months was none other than that of an epochal systemic crisis. It in fact was the epitome of "unusual and exigent circumstances", in w...

From the Zero Hedge, July 31, 2013: Lakshman Achuthan of the Economic Cycle Research Institute is interviewed on Bloomberg TV "Tyler Durden" at Zero Hedge reports how Achuthan challenges the conventional wisdom that the economy is doing well and how the anchors of the show, especially Tom Keene, defend their view. At 1:05, Achuthan stuns the Bloomberg anchors - "We believe that a recession began last year. Time will tell if that call is correct."  To which they retort...  "The jobs situation is great" [LA] ...the job market is not doing well, all headlines aside. When you – I think the core thing here, and something that concerns us quite a bit, is the types of jobs that make money.  So if you happen to be between the age of 35 and 54, since this so-called jobs recovery began three-and-a-half years ago, you’ve actually seen job losses, not gains, okay ? Job losses for 35 to 54 year-olds approaching a million jobs lost. Now that ...

In an interview on CNBC's Squawk Box December 17, 2012: David Tepper, president & founder, Appaloosa Management, says what the Fed has done helped the markets. He also says he believes the Fed sees a 6 percent unemployment rate is the trigger for inflation. He also says Obama's legacy will be defined by entitlement reform.

CNBC's Steve Liesman interviews Chicago Federal Reserve President Charlie Evans October 1, 2012 Rough Transcript: let's get to our newsmaker of the morning. steve liesman joins us from chicago with a very exclusive interview. steve? yes, thanks very much. i'm here in chicago with the chicago federal reserve president charlie evans. nice to be here. a year ago you laid out this idea of pegging policy to unemployment, and to inflation, given what the federal reserve just did, do you feel vindicated and the follow-up to that is do you feel satisfied, is it enough? well, last year i was here and i was talking a lot about our dual mandate responsibilities and i mentioned that with the unemployment rate at that time at 9% that was unacceptably high and we need to focus more on our dual mandate responsibilities. i feel good that our most recent statement and policy is focusing on strongly on the labor market, we're looking for substantial improvement i...

Marc Faber, publisher of the Gloom, Boom & Doom report, talks on September 14, 2012, about Federal Reserve policy and his investment strategy. Faber, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses gold prices and the property market. (Source: Bloomberg) Selected Quotes: "Even if Romeny wins the election, the next Fed chairman will be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don't like bonds. I don't particularly like equities, but I think equities are a better space to be in than bonds.” ** "I own corporate bonds. I bought some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country." ** "The fallacy in the United States is to think that this will go to the man on the street. It wo...

Marc Faber is interviewed on CNBC at 5:30 am on September 14, 2012