segunda-feira, 31 de Março de 2008

Problemas com moeda

Edmund Burke (em tónica um tanto ou quanto...): " [The English revolutionaries] were not like Jew brokers, contending with each other who could best remedy with fraudulent circulation and depreciated paper the wretchedness and ruin brought on their country by their degenerate councils." [não confirmei esta citação, só a encontrei http://www.anthropoetics.ucla.edu/views/vw268.htm

Sobre as mudanças regulatórias pós-crise de que são co-responsáveis

* "This amounts to rearranging the deck chairs on the Titanic—the sort of gesture that one expects of government when faced with a crisis. When in doubt, play around with organizational charts. (...)

The big investment bankes, who profit from Fed policies, and are the first to get bailed out, are the real villains in this drama, and yet no Republican (and certainly not Hillary, whose campaign contributions from this crowd ensure her silence) is going to say this out loud. The real roots of the problem are the inflationary policies of Greenspan-Bernanke, who put the peddle to the metal during the days of “prosperity”—in short, Ron Paul was (and is) right. But a Republican administration would rather nationalize the banking sector than admit that. "Justin Raimundo

* "Resolver os sintomas do passado
Publicado por JoaoMiranda [via Blasfémias] em 31 Março, 2008
Duas notícias da manhã aparentemente não relacionadas:
A DREN deu ordens para tolerância zero aos telemóveis no Carolina Michaelis.
A regulamentação bancária nos EUA vai ser modificada para dar ao FED mais poder sobre as instituições bancárias.
Estas notícias têm alguns pontos em comum:
1. Tenta-se corrigir o sintoma e não a causa do problema.
2. A instituição que foi a principal responsável pelo problema ganhou poder.
3. Ficamos muito mais preparados para os sintomas do passado e continuamos impreparados para os sintomas do futuro."

quinta-feira, 27 de Março de 2008

Transparência nos mercados, dizem eles

"The Fed, for the first time, agreed on March 16 to let big investment houses temporarily get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, will continue for at least six months. It was the broadest use of the Fed's lending authority since the 1930s.
(
...) The Fed does not release the identity of the borrowers using the facility."


E então a obrigação (imposta por reguladores e as suas teorias sobre "informação perfeita" acessível a todos simultâneamente - uma nova geração de igualitarismo) das empresas cotadas em informar o mercado sobre "Factos Relevantes"?

E os que dizem que um dos problemas é a falta de transparência?

Monopólios?

"To those who are still tempted to make the number of pro ducers in any field the test of competitive merit, we might ask (setting aside the problem of proving homogeneity): How can the market create sufficient numbers? If Crusoe exchanges fish for Friday’s lumber on their desert island, are they both benefiting, or are they “bilateral monopolists” exploiting each other and charging each other monopoly prices? But if the State is not justi fied in marching in to arrest Crusoe and/or Friday, how can it be justified in coercing a market where there are obviously many more competitors?" Murray N. Rothbard

terça-feira, 25 de Março de 2008

História

http://www.libertymaven.com/

Liberty: The American Revolution from PBS [Video]

This is a six part series (each part is just under 1 hour long) from PBS that covers the 25 years surrounding the American Revolution. It is an excellent use of some free time, if you have any.

Part 1: http://video.google.com/videoplay?do…51196414323436

Part 2: http://video.google.com/videoplay?do…45627130631491

Part 3: http://video.google.com/videoplay?do…22546684391794

Part 4: http://video.google.com/videoplay?do…65465027527206

Part 5: http://video.google.com/videoplay?do…21666647804785

Part 6: http://video.google.com/videoplay?do…50897330746009

Depósitos e Crédito: Na verdade, uma e outra são (quase) a mesma a coisa

Jornal de Negócios: Depósitos voltam a aumentar para níveis recorde

"As famílias portuguesas estão a colocar cada vez mais dinheiro no banco, com os montantes dos depósitos a atingirem um novo recorde em Janeiro. Contudo, continuam também a pedir mais empréstimos, com o montante de crédito concedido a registar o nível mais elevado de sempre. Um crescimento acompanhado pelo crédito malparado."

Nota: Se o crédito pode ser concedido por criação de moeda, quando um novo crédito é aberto, o Banco simplesmente abre um depósito na conta do devedor.

E assim, crédito = depósitos.

domingo, 23 de Março de 2008

1913 - o FED é criado

"From now on, depressions will be scientifically created." -- Congressman Charles A. Lindbergh Sr. , 1913

PS: Bem, só demorou 16 anos para criarem a Grande Depressão.

PS2: Charles A. Lindbergh Sr foi o congressista que liderou a oposição à entrada dos EUA na Primeira Guerra Mundial.

E Charles A. Lindbergh Jr, seu filho, depois um honesto opositor de Roosevelt e para sempre smeared, tinha uma tradição de família a seguir - a de ir contra a maré do "war buildup". Philip Roth fez o favor de produzir uma fantasia usando personagens reais como o que usa como vice-presidente na sua trama. E com que cuidado?

"The smear continues to this day. Take for example Phillip "Portnoy's Complaint" Roth's recent fantasy novel "The Plot Against America" painting a fascist alternative history under an imagined 1940 President Charles Lindbergh Junior with Burton K Wheeler as vice-president in an anti-semitic America. As wikipedia reports "Roth depicts Wheeler imposing marital law in Lindbergh's absence, whereas the real Wheeler had been a leading opponent of the martial law imposed in Montana during World War I. Author Bill Kaufman describes Wheeler as being, in fact an "anti-draft, antiwar, anti-big business defender of civil liberties"" . Wheeler, who ran for Montana Governor in 1920, on a ticket that included an African American and a Blackfoot Indian makes for an unlikely nazi. "

Enfim...

quarta-feira, 12 de Março de 2008

Oil, gold and easy money

A evolução do preço do barril de petróleo em dólares, euros e onças de ouro.

Não é por nada, mas parece que os hetero e homo discriminam

... e os bisexuais não. Assim, quer o sexo consentido gratuito quer a prostituição (sexo consentido a título oneroso) tem de passar a ser bisexual.

ASSEMBLEIA DA REPÚBLICA Lei n.º 14/2008 de 12 de Março


Proíbe e sanciona a discriminação em função do sexo no acesso a
bens e serviços e seu fornecimento, transpondo para a ordem
jurídica interna a Directiva n.º 2004/113/CE, do Conselho, de
13 de Dezembro.

A Assembleia da República decreta, nos termos da
alínea c) do artigo 161.º da Constituição, o seguinte:

Artigo 1.º
Objecto
A presente lei tem por objecto prevenir e proibir a discriminação,
directa e indirecta, em função do sexo, no
acesso a bens e serviços e seu fornecimento e sancionar a
prática de actos que se traduzam na violação do princípio
da igualdade de tratamento entre homens e mulheres.
(...)


Artigo 2.º
Âmbito
1 — A presente lei aplica -se às entidades públicas e
privadas que forneçam bens e prestem serviços disponíveis
ao público a título gratuito ou oneroso.
(...)


Artigo 3.º
Definições
Para efeito desta lei, consideram -se:
a) «Discriminação directa» todas as situações em
que, em função do sexo, uma pessoa seja sujeita a tratamento
menos favorável do que aquele que é, tenha
sido ou possa vir a ser dado a outra pessoa em situação
comparável;
b) «Discriminação indirecta» sempre que uma disposição,
critério ou prática aparentemente neutra coloque
pessoas de um dado sexo numa situação de desvantagem
comparativamente com pessoas do outro sexo, a não ser
que essa disposição, critério ou prática objectivamente
se justifique por um fim legítimo e que os meios para o
alcançar sejam adequados e necessários;"

(...)"

terça-feira, 11 de Março de 2008

Mitos: o consumo estimula a economia

"Constâncio: redução de impostos não iria estimular a economia mas aumentar a poupança "

Socialismo Monetário

Nota: Os Bancos Centrais a financiar directamente o crédito à habitação por pura criação monetária .... para ajudar os grandes-bancos-too-big-to-fall na sua crise de liquidez.

Fed to Auction as Much as $200 Bln in Treasuries, Boosts Swaps

March 11 (Bloomberg) -- The Federal Reserve will hold auctions to lend as much as $200 billion in Treasury securities and increase swap lines with two foreign central banks to try to ease renewed turmoil in credit markets.

The Fed said in a statement it is establishing a new Term Securities Lending Facility to, through weekly auctions, lend as much as $200 billion of Treasuries to primary dealers for 28 days, instead of overnight as it currently does. The loans may be secured by collateral including agency and private mortgage- backed securities, the Fed said.

The Federal Open Market Committee also authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion."

Inflation Watch

"Money Supply Watch

The fuel that is causing accelerating price inflation in the U.S. continues to climb. The latest money supply numbers from the Fed's H.6 release show money supply (M2)growth over the last 3 months at a 6.5% annualized rate, an extremely fast rate. This growth compares with an annualized growth rate of 5.8% over the last 12 months."

http://www.economicanalyticsgroup.com/blog.html

Tribe, Class, and Murder

John Zmirak: "Which is why multicultural states are tricky balancing acts, which lately tend to collapse. They especially tend to fall apart when modernity has broken down basic units such as the family, transformed people in communities into individuals facing the State. Cosmopolitanism gets even hard with the rise of democracy, with its fiction of popular sovereignty, and unlimited claims to dispose of private property as the majority sees fit. Once property is politicized—as always happens in centralized democracies—it only makes sense to fight for your share of the loot. "

segunda-feira, 10 de Março de 2008

John Galt Plan Might Save U.S. Financial System

Caroline Baum, Bloomberg.com: "(..) The following day, Fed Chairman Ben Bernanke encouraged mortgage servicers to write down a portion of the principal on home loans, which would give owners some equity and discourage foreclosure. He advocated a bigger role for the Federal Housing Administration, a Depression-era agency that insures mortgages. Congress envisions an even larger role for the federal government.

Any day, I expect some government official to unveil the John Galt plan to save the economy.

Galt, the hero of Ayn Rand's magnum opus ``Atlas Shrugged,'' stops the world by going on strike. He and the ``men of the mind'' literally withdraw from the world after watching their wealth confiscated by the looters (the government).

Toward the end of Rand's 1,000-plus page novel (or polemic), the economy is in shambles. Desperate, the looters kidnap Galt and prod him to ``tell us what to do.''

Galt refuses, or rather tells them ``to get out of the way.''

Road Is Cleared

You probably can sense where I'm going. Today's economic and financial crisis would resolve itself more quickly and efficiently if the government got out of the way. Yes, there would be pain. Some banks would fail. Others would clamp down on credit to atone for the years of lax lending standards. Homeowners-in-name-only would become renters. Housing prices would fall until speculators found value.

That's not going to happen. The bigger the mess, the more urgent the calls for a government solution, the more willing government is to oblige.

We want laissez-faire capitalism in good times and a government backstop against losses in bad times. It's a tough way to run an economy.

(Caroline Baum, author of ``Just What I Said,'' is a Bloomberg News columnist. The opinions expressed are her own.)

sexta-feira, 7 de Março de 2008

Best WFB R.I.P.

Taki Theodoracopulos:

"Gstaad is a very chic place and, alas, getting chicer by the minute as the nouveaux riche Russians and oily kleptocratic Arabs are closing in. Thinking about the way our alpine village used to be, I’m reminded of the time I spent here with Bill Buckley and what he represented when he came on the American political scene—a fresh voice full of promise, and an educated and cultured one at that.

I’ve written a memoir of Bill for National Review that is better than the one I did for my own web site. That is understandable. Rich Lowry asked me to do it, and I was flattered. NR gave me my start, and however much I feel betrayed by the way things have gone, Bill was Bill. And NR is NR.

When my father’s best friend faked his X-rays and avoided going to the front in 1940, my grandfather happened to be chief justice of the Greek Supreme Court. My dad’s friend was caught, tried, convicted, and sentenced to die the next day for draft evasion, the reason being he was a “have,” and while farm boys were dying at the front against the Italians, there was no way one of “us” could have been spared. By a superhuman effort, the wife of the condemned managed to reach my father fighting at the Albanian front, and he—however unbelievable it seems—managed to get a message to my grandfather to stay the execution. I was four years old and remember my mother begging her father for a reprieve. But what I will never forget is when she reported to me of what my grandfather had told her: “Noblesse Oblige—if he were a poor boy, I would understand. But when the time comes for those of us who are privileged, there can be no excuse.” He was shot at dawn. His children and grandchildren are friends of mine, and we don’t talk about it.


What does this have to do with Bill? He made a mistake. He honestly believed that the Podhoretzes and Kristols of this world would help make conservatism mainstream. On my boat in the summer of 2005, he told me that he regretted having backed the war. I did not push it. “May I quote you,” I asked him. Of course you can, he answered. But the Podhoretzes of this world do not forgive. I heard that Norman Podhoretz attacked Bill for not staying the course. My dad’s friend’s family never held it against us when my grandfather refused to save their father. Neocons are of a different breed. They are haters, and they do not forgive.

I write this under the weather, having just received a wonderful e-mail from a rosey School master and his wife who had met Bill and who are upset about the rude remarks on this web site about him. “Such are the joys of public life,” I answered them. They wish to hold a service for him here in Gstaad, and they are the real thing: true Americans. Religious, patriotic, kind, hard working—the types neocons take for granted. I will hold a service for Bill here in the Mecca of the rich, but I will also speak about how he lost his way listening to the siren songs of the Podhoretzes and Kristols. In Dante’s Inferno the 9th circle is reserved for traitors. There is no circle for the misguided like him. "

quinta-feira, 6 de Março de 2008

Além da dimensão do défice

Suave mal-estar e despedida. Por José Manuel Moreira.

Como se explica que, ao contrário de outros da Sedes, este tenha “pegado” logo e tão bem?

Terá sido por oferecer uma boa descrição do mal-estar, recheada de discretas doses de ambiguidade nas suas raízes? Não terá sido isso que permitiu tanto aplauso ao mal-estar, tão pouca clareza nas alternativas – de que, afinal, depende a confiança – e tanta liberdade nas considerações?

(...)

Não será tempo de, além da dimensão do défice, se prestar atenção à forma como os gastos governamentais contribuem – da criminalidade à educação – para fomentar os males que se propõem combater? De se deixar de confundir princípios com expedientes, causas morais com sociais? De descobrir quanto o mal-estar difuso, que alastra e degrada a confiança, é inseparável da pedagogia do facilitismo, de que tudo se consegue sem custo? De questionar uma cultura de direitos sem deveres, que incentivou o sequestro legal dos cidadãos por políticas suavemente criminosas e, com o tempo, a multiplicação de crimes comuns e de comportamentos anti-sociais?

O actual sistema monetário: quem beneficia e o que fazer

Todos os Bancos Centrais representam uma união de interesses entre o Estado (para o financiamento dos déficits), a banca (para terem acesso à capacidade de criação de dinheiro para conceder crédito sem ter de pagar o preço real pela captação de poupança aos pequenos e médios aforradores) e os grandes utilizadores de crédito (beneficiam em primeira ordem das novas quantidades de dinheiro para o aplicar a preços que não reflectem a nova relação entre quantidade de moeda e bens).

Os economistas fazem parte do pacote (generalizando) porque vão trabalhar para o Estado-Bancos-Empresas e o mundo académico onde propagam uma completa falsidade científica - a que a economia funciona melhor (argumento utilitário) ao quebrar-se a ligação entre a poupança voluntária e o investimento (e ignorando por completo o argumento ético do efeito redistributivo da desvalorização permanente da moeda para beneficiar o complexo Estado-Banca-Grandes-Devedores).

Perguntem-se como é que certos raiders de bolsa (cuja função económica é importante e existiria de qualquer forma) constroem fortunas com o recurso ao crédito? Porque num ciclo de expansão, o crédito é mais abundante e barato do que o seria num “sistema natural” (reservas de 100% ou se quisermos, liberdade monetária - esta daria lugar àquela), tendo assim acesso facilitado a elevadas quantidades de moeda e comprando activos a preços que não reflectem ainda a desvalorização induzida pelas novas quantidades de dinheiro colocadas na economia.

O segredo é perceber estes ciclos, entrando na melhor altura e saindo antes de a bolha rebentar. Na verdade, um bom timing permite depois do rebentamento da bolha, comprar aquilo (ou outra coisa qualquer) que se vendeu no topo (auferindo um lucro puro facilitado pelo acesso fácil ao crédito via criação monetária pelo sistema bancário) a preços extremamente deprimidos dada a crise económica – que na verdade representa o processo de cura e não a doença, reequilibrando o valor do investimento à poupança realmente existente. Relação essa que é quebrada quando se permite que o investimento tenha ligar com o recurso a pura criação monetária em vez de este “ter” de convencer a poupança existente a financiá-lo (o que significa ter de pagar o preço – taxa de juro – justo). O que é que o sistema incentiva? O recurso ao endividamento por comparação ao capital próprio, já que moeda e crédito passam a ser a mesma coisa (tal como nos Bancos Centrais, a moeda que emitem tem como colateral o crédito ao Estado e à Banca).

A velha memória de poupar e "guardar o dinheiro em casa", retendo assim a capacidade de independência do sistema financeiro, desvanece-se. Antes, dada a contínua valorização do dinheiro (ou seja, descida dos preços) era possível deter pelo menos parte da poupança “em casa” auferindo de um juro sem juro conferido pela contínua descida de preços (ou no mínimo a retenção da poder aquisitivo dessa poupança).

Hoje, com a contínua desvalorização da moeda, só para reter o valor da poupança somos obrigados a conceder crédito aos Bancos (“depósitos” à ordem e depósitos a prazo). E o sistema financeiro adora isso. Os economistas pensam que é a forma (subtilmente compulsória) de existir mais crédito e por isso mais investimento. Mas ainda que exista um factor real de poupança forçada, mais uma vez, é possível realçar negativamente o efeito redistributivo de muitos a favor de poucos, assim como a evidência dos permanentes ciclos económicos que aumentam a incerteza mais do que o risco em si.


E assim, para não sermos ainda mais prejudicados com o sistema, é racional recorrer ao crédito, principalmente nos primeiros estágios de um ciclo de expansão. Tentemos também auferir da situação de facto.

Mas como no fim, tudo se paga, o melhor é limitar o crédito à casa e amealhar ouro físico (ex: libras de ouro) como poupança e protecção, e sim, investir também no mercado de capitais que apesar do sistema monetário, e não por causa do sistema monetário, consegue ir cumprindo a sua função económica.

quarta-feira, 5 de Março de 2008

Piadas económicas

Três empresários na cadeia trocam comentários sobre o seu infortúnio.

Diz um: "Eu cobrava os preços mais caros e acusaram-me de ser monopolista"

Diz o outro: " Eu cobrava o preço mais barato e acusaram-me de "dumping""

O terceiro: "Eu cobrava exactamente o mesmo que todos os outros e acusaram-me de concertação".

(Via Walter Block)

Sobre o ataque à concorrência fiscal e soberania dos Estados

Ou: Proibam e façam o que quiser no seu país e com os seus próprios cidadãos mas não invadam a soberania dos outros (a não ser que queriam promover a total anomia e desordem internacional).

Europe's Tiny Tax Havens Should Be Left in Peace: Matthew Lynn (Bloomberg) --

(...) Not cooperating in Germany's investigation ofalleged tax evaders. The tussle between Germany and Liechtenstein is just theoverture to a wider battle between the big European nations andthe tiny low-tax principalities. Next up: Monaco and Andorra. And yet, the attacks are completely unfair.

(...) It started when German investigators paid 5 million euros ($7.6 million) to aformer employee of the Liechtenstein bank LGT Group for computerdisks containing the names of people holding accounts there. (...)

You can see why the tax havens are an irritation for the big European governments. In a world of increasing mobility, andbetter communication links, it has become easier for the wealthyto shift their base to a more tax-friendly environment.

Half theBritish corporate establishment seems to be based in Monaco thesedays. Plenty of Germans appear to be storing money away in Liechtenstein. ``Liechtenstein is a clear example of a pirate state,'' saidJohn Christensen, director of the Brussels-based Tax JusticeNetwork, a research group that promotes awareness about offshorefinance. ``
(...) And yet, Liechtenstein and Monaco have no obligation toprovide a list of foreign investors to German, French or British tax authorities, as long as money laundering and terrorism aren't suspected. Here's why such demands are contradictory.

Two Wrongs First, how can the German government justify paying HeinrichKieber, the former LGT Group employee, for details of privateaccounts, then sell the stolen property around the world? Itdoesn't matter if the disks revealed tax evasion, which,incidentally, has yet to be proven. Two wrongs don't make a right.

Presumably the German, U.K., French or Swedishgovernments, which bought the data, will have no objections if anEU member state starts stealing information from their banks.

Next, while they may not be full-blown nations, these are sovereign entities. Germany has a right to set whatever laws itlikes for people living in Germany. If it wants to ban its citizens from holding accounts -- or setting up trusts andfoundations -- in other countries, it can do so (and deal withthe flight of people and capital). But it can't harass other countries into changing their practices. If people invest in low-tax countries or in legal structures such as foundations, their tax liability is their business, not the responsibility of the host nation. For most legitimate investors, low-tax principalities provide a useful alternative tot he high-tax, big-government consensus that suffocates much ofEurope.

Unfair Competition Lastly, it is ludicrous to say that this kind of tax``competition'' is unfair. All competition is unfair. These aresmall nations entitled to make their living any way they want to. It is no more unfair than Germany's proficiency at making cars,or the French aptitude at making wine. Should the Germans shutdown their luxury-car industry because it makes life difficultfor auto workers in the rest of Europe? Of course not. So whyshould Liechtenstein close its financial-services industry? Naturally, tax havens should make sure they aren't harboringassets for criminals or terrorists. And yet, that is a redherring. Mounir el-Motassadeq, the only person to stand trialover the Sept. 11 terror attacks in the U.S., operated out ofHamburg, not Liechtenstein. One of the suspected hijackers usedaccounts in Florida, not Monaco. In reality, terrorists useeveryday banks because they attract less suspicion. Maybe the German government and others paying for stoleninformation should spend more time thinking about making theirown countries more attractive for its tax-paying citizens.

(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)

terça-feira, 4 de Março de 2008

Too big to be saved?

Gulf investors may not save Citigroup, Dubai executive says

Excelente artigo sobre a actuação recente do FED II

Nos comentários de um artigo do LvMI (Bennie and the Monetary Jets, Mark Thornton) decorre um debate interessante:

" (...) Even though TAF has added $60 billion to money supply, overall M1 continues to fall, as Shadow stats and Shedlock have pointed out.

How has this occurred? The $60 billion jump has been offset by a >$60 billion drop in the Fed's long term government bond portfolio, or SOMA. Historically, whenever a long term bond (2 year to 30 year) in the SOMA portfolio matured, the Fed simply rolled it over. The cash it had spent to buy that bond therefore stayed in the economy.

Since August or so the Fed has been redeeming SOMA's bonds, not rolling them over. The face value of the bond has been paid back to the Fed, the effect being that money is being withdrawn from the economy. The effect of redeeming bonds and withdrawing circulating cash outweighs TAF's influence on increasing the level of circulating cash. Overall M1 is decreasing.


The Fed's decision to roll over or redeem is a policy decision. Unlike open operations, it doesn't depend on the willingness of commercial banks to lend the money the Fed injects into the banking industry. I sort of agree with Shedlock on this one - the Fed seems to be following a policy of shrinking money supply.

At the same time, the TAF accepts a lot of questionable collateral (mortgage backed securities, comm paper, corp bonds and more). This change in the assets backing the dollar (from relatively safe government bonds to the above) can only hurt the purchasing power of the dollar, especially if the Fed is lax on monitoring what it is accepting as collateral."

Excelente artigo sobre a actuação recente do FED

... e o seu novo mecanismo para "socorrer os bancos" com crédito por criação monetária ("injecção"): "Term Auction Facility"


Fed Isn't Getting Snookered by Collateral Risk: Caroline Baum2008-03-04 00:05 (New York)Commentary by Caroline Baum March 4 (Bloomberg) --

Ever since the Federal Reserve created a Term Auction Facility in December to ease the strainsin the interbank-lending market, the TAF has been a source ofagitation in certain conspiracy-prone circles. The thrust of that argument goes something like this: The Fed, which is first and foremost a counterfeiter, printing moneyat will, is now accepting low-quality collateral as security for28-day loans to banks whose anonymity is protected. In theprocess, the central bank assumes credit risk and lays it at thefeet of the U.S. taxpayer. Maybe it's time to take a look at some of the facts. The Fed had already taken steps in August to encouragebanks to borrow directly from its discount window, compressingthe spread of the discount rate over the federal funds rate to50 basis points from 100 and expanding both the type ofcollateral it would accept and the terms of the loans to 30days. No matter how nicely the Fed asked, banks were unwilling toincur the stigma associated with discount window borrowing,especially at a time when financial institutions were reportinglarge losses and any intimation of trouble could causedepositors to take flight. Fed Chairman Ben Bernanke decided to respond to theliquidity crisis with, appropriately, added liquidity. (See``Federal Reserve'' and ``lender of last resort.'') That didn'tstop the yammering about the assumption of credit risk by the central bank. The misinformation surrounding the TAF has reached suchepic proportions, at least in my small world, that I decided tocompile my own version of frequently asked questions andanswers. Most of this information is publicly available on theFed's Web site -- in excruciating detail. But hey, never let thefacts get in the way of a good conspiracy theory.

Q: What is the difference between the discount window and theTAF?
A: About 50 basis points, at least at the Feb. 25 TAF auction.The minimum bid at the auction is determined by the expected fedfunds rate over the term of the loan, which is 28 days. The Fed awarded $30 billion at 3.08 percent last week. Thediscount rate is 3.5 percent. (That rate doesn't include theimplied cost of any stigma that accrues to the borrower forgoing to the window.)

Q: What does a bank have to do to qualify for a loan from theFed?
A: Banks must be in sound financial condition to be eligiblefor so-called primary credit. They must file the necessarydocumentation, as set out in Operating Circular No. 10. And theyhave to pledge collateral in advance of a request for adiscount-window or TAF loan. Many depository institutions regularly post collateral withthe Fed in case they need backup funding when money markets aretight, loan demand spikes or depositors withdraw moneyunexpectedly. Since August, when the interbank market froze up,banks have increased the amount of collateral posted with theFed.

Q: What sort of securities and loans will be accepted ascollateral outside of the traditional U.S. Treasury and agencysecurities?
A: Corporate and municipal bonds, money-market instruments,asset-backed securities, collateralized-mortgage obligations andvarious consumer, commercial and industrial, agricultural,residential and commercial real-estate loans.

Q: How does the Fed determine how much to lend against thesecurities and loans it accepts as collateral?
A: A table of recommended margins for various types ofcollateral is posted on the Fed's Web site. The Fed lends only apercentage of the market value of the collateral, with the``haircut'' ranging from 2 percent on short-term, top-qualityTreasuries (in other words, the lendable value of a two-yearTreasury note is 98 percent) to 40 percent for certain types ofconsumer loans.

Q: Some of the collateral the Fed is accepting is exactly whatgot the banks into trouble. Why will the Fed do a better job ofmanaging risk when it missed the bad-loan problems at banks itregulates?
A: The discount-window officers at the 12 Federal ReserveDistrict Banks have discretion in determining both the fairvalue of the collateral and the required margin. If there is no market price for a given security and thediscount-window officers and/or bank-supervisory officials atthe Fed aren't confident about the value, they can impose abigger haircut. Alternatively, they can just say no. In the current environment, it's safe to say the Fed hasbeen erring on the side of too much rather than too littlecollateral.

Q: What happens if the value of the underlying collateraltakes a dive during the 28-day term of the loan?
A: The same thing that happens in the private sector: theborrower gets a margin call. If the value of the collateraldeteriorates, the Fed can consider other collateral in theborrower's pool as a backstop for the outstanding loan. Or theFed bank can immediately reduce the amount of the loan. The only thing fixed on a TAF loan is the rate. The Fedmonitors the collateral on a daily basis. Borrowers thatqualified for a loan can un-qualify quickly if the collateral is inadequate.

Q: So you're saying there's nothing to worry about?
A: There's plenty to worry about, including the collapse ofthe housing market, early signs of decay in commercial realestate, soaring commodity prices, an over-leveraged consumer,losses and potential capital impairment at financialinstitutions and an economy that's flat-lining. That's enough tokeep you up at night without tossing and turning over the Fed'sexposure to credit risk. (Caroline Baum, author of ``Just What I Said,'' is aBloomberg News columnist. The opinions expressed are her own.)

domingo, 2 de Março de 2008

William F. Buckley (2)

William F. Buckley Jr.-- R.I.P. Por Justin Raimondo.

His magazine, the National Review, was available in our Junior High School library—along with The New Republic, The Nation, and even American Opinion (!)—and I read it regularly, as soon as the new issue came in. Nurtured on Frank S. Meyer’s essays, and Buckley’s acerbic commentary, I was part and parcel of the Goldwater movement in my own small way, and I idolized the youthful and articulate Buckley, who often appeared on television. Here was an intellectual, who was, at the same time, a man of the Right: back then, an almost inconceivable phenomenon. Buckley, with his formidable erudition, and his ready wit, was a kind of intellectual father figure for me: although I never met him, he was a kind of model.

William F. Buckley

Buckley. Por Tom Palmer.

I suppose everyone who ever came in contact with, or read a book by, William F. Buckley, Jr. has to chime in. Yes, I met him and when I was a young teenager he praised me for asking a particularly convoluted question, which made me feel clever (for a few minutes). No, we were not buddies and I have no colorful stories to tell about him. His influence on me was largely of a negative kind: I figured out early that I did not want to be superficial in my writing or speech, as his columns typically were.