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from MacroScope:

Scrambling to flesh out skeleton Fed board

"It's about time" was the general reaction when on Thursday the Senate Banking Committee scheduled a vote on Barack Obama's nominees for the Federal Reserve board. Not that Stanley Fischer, Lael Brainard and Jerome Powell (a sitting governor who needs re-confirmation) have been waiting all that long; it was January that the U.S. president nominated them as central bank governors, and only a month ago that the trio testified to the committee. The urgency and even anxiety had more to do with the fact that only four members currently sit on the Fed's seven-member board and one of those, Jeremy Stein, is retiring in a month. The 100-year old Fed has never had only three governors, and the thought of the policy and administrative headaches that would bring was starting to stress people out. After all, the Fed under freshly-minted chair Janet Yellen is in the midst of its most difficult policy reversal ever.

"Boy it would be more comfortable if there were at least five governors and hopefully more" to help Yellen "think through these very difficult communications challenges," said Donald Kohn, a former Fed vice chair. Former governor Elizabeth Duke, who stepped down in August, said one of the Fed board's strengths is its diversity of members' backgrounds. "With fewer people you don't have as many different points of view on policy," she said in an interview.

The Senate committee votes on the three nominees April 29. But they can't start the job until the full Democratic-controlled Senate also schedules a vote and gives them the green light.

To be sure, there is no requirement for the Fed to have a full slate of seven governors. But it was something of a wake-up call when five presidents of the Fed's regional branches voted alongside only four board governors at last month's policy-setting meeting, when the central bank decided to revamp a delicate promise to keep interest rates low for a while to come. The privately-elected presidents, who often represent the extremely hawkish or dovish views on what to do about rates and asset purchases, will have an effective majority until more governors are confirmed. While the chair will seek to build the broadest support possible among fellow policymakers, "when the board is under-staffed the leadership needs to be that little bit more solicitous of the views of the presidents, who can dissent more freely," said Krishna Guha, a former New York Fed official who now a vice chairman at ISI, a broker-dealer.

from Jack Shafer:

The landslide of news

Of the many ways nature can kill you, the landslide must be the most cruel. Not as cosmically spectacular as the tectonic tantrum of the earthquake or as catastrophic as pure weather-borne calamities (floods, hurricanes, tornados), the mudslide lies in wait like a heart attack, springing its localized force without much, if any, warning. It's filthy, it's bone-crushing, and it's suffocating. Any trust you have in terra firma will promptly be upended.

The press coverage of Saturday's landslide in Oso, Wash., which as of this writing has claimed 24 dead and confirmed missing, has expressed this horror with hours of broadcast and thousands of column inches of newsprint -- and continues. Today's New York Times makes the Oso landslide its top story, complete with slideshow and interactive map of the disaster.

from Breakingviews:

Obama’s new sanctions aim to expose crony Putinism

By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

 

Barack Obama is hitting Vladimir Putin where it hurts – his inner circle. New U.S. sanctions against a Russian bank and a host of tycoons are ostensibly just an escalated response to the annexation of Crimea. But they also allege a link between the Kremlin boss and Gunvor, a secretive Swiss oil trader. Washington seems determined to reveal how Putin and his comrades have amassed immense personal wealth at public expense.

from MacroScope:

Cold War chill over Ukraine

Dramatic twist in the Ukraine saga last night with a conversation between a State Department official and the U.S. ambassador to Ukraine posted on YouTube which appeared to show the official, Assistant Secretary of State Victoria Nuland, deliberating on the make-up of the next government in Kiev.

That led to a furious tit-for-tat with Moscow accusing Washington of planning a coup and the United States in turn saying Russia had leaked the video, which carried subtitles in Russian. A Kremlin aide said Moscow might block U.S. "interference" in Kiev.

from Photographers' Blog:

Marching to Sousa’s drum beat

Washington, D.C.

By Jonathan Ernst

One of the great things about Washington is historic Capitol Hill, where there’s a lot of life beyond the headlines and punch lines about the U.S. Congress. I like to describe it as a small town attached to the city. We know our neighbors. We walk our dogs.

Sure, our neighbors include senators and congressmen, and every once in a while at the grocery store you’ll find yourself in line behind a woman who happens to be the Secretary of Health and Human Services holding the bouquet of flowers she’s picked out, or a guy who happens to be the director of the CIA as he’s making a selection at the olive bar. But at that moment, they’re just neighbors. They probably walk their dogs too. While a security detail in a large black SUV watches from a discreet distance.

from MacroScope:

Humdrum summit

A two-day EU summit kicks off in Brussels hamstrung by the lack of a German government.

Officials in Berlin say they want to reach a common position on a mechanism for restructuring or winding up failing banks by the end of the year but with an entire policy slate to be thrashed out and the centre-left SPD saying the aim is to form a new German administration with Angela Merkel’s CDU by Christmas, time is very tight.

from Ian Bremmer:

The selfishness in Congress is far from over

When I write about our new G-Zero world, I am describing an international phenomenon: a global environment in which no power or group of powers can sustainably set an international agenda. The global community, used to orienting itself around a collection of U.S.-led powers, has fallen victim to a widening leadership vacuum, what with the United States disengaging from foreign affairs and Europe too busy with its own crisis. Emerging powers like China have grown large enough to undermine a Western-led global agenda -- but not yet developed enough to prioritize their own international role over their domestic concerns.

Every major power is too busy watching out for its own needs to focus on the bigger picture. As a result, the international community has been unable to make any progress on pressing crises like global warming, a civil war in Syria, or the rise of cyber warfare. A vacuum of leadership has led to a dearth of mutually beneficial planning.

from MacroScope:

Can they kick it? Yes they can

Click here for suggested soundtrack to this blog 

During the recent round of financial crises, policymakers have done a whole lot of “kicking the can down the road”.

The latest is taking place in the United States where a fiscal stalemate between Republicans and Democrats has forced the first partial government shutdown in 17 years.  It has also raised concerns about a U.S. debt default, should the government not meet a deadline this week of raising the debt ceiling. That has kept short-term U.S. interest rates and the cost of insuring U.S. debt against default relatively elevated.

from Photographers' Blog:

Becoming a published news photographer

Washington, D.C.

By Jim Bourg

When reports of “shots fired” came in from multiple locations on Washington’s Capitol Hill on October 3, I dispatched Reuters Washington photographers in force, with four staff photographers and two contract photographers racing towards the scene within minutes of the shots being fired. Early on it was unclear how big the incident was and whether the Capitol was in fact under attack, and we were taking no chances if this might become a huge world news event. But in this day of ever present camera phones, and with so many members of the public carrying cameras, unless a news photographer is lucky enough to be right on the scene when spot news happens, there is always someone else who was there shooting pictures first.

Staff photographer Larry Downing was one of the first Reuters photographers on the scene at the Capitol Hill shooting. While Larry was shooting pictures, and as I remotely edited his pictures from the Reuters Washington bureau over a cellular data card connected to his laptop, a young freelance photographer named Alexander Morozov walked up and started asking questions, expressing his interest in becoming a professional news photographer.

from MacroScope:

Letter of the Lew: Treasury comments on change of guard at troubled IRS

Here are comments from a U.S. Treasury official on Secretary Jack Lew’s meeting with incoming Acting IRS Commissioner Daniel Werfel this morning, following a scandal of political targeting that cost the previous acting commissioner his job. Treasury officials knew about the problem as early as last June, according to this report in the Wall Street Journal:

Secretary Lew met with incoming Acting IRS Commissioner Werfel this morning and directed him to conduct a thorough review of the organization in an effort to restore public confidence in the IRS and ensure the organization is providing excellent and unbiased service to the taxpayer. Secretary Lew also requested that he take actions immediately as appropriate, and that within the next 30 days, Werfel report back to the President and him about progress made in three areas: 1) ensuring staff that acted inappropriately are held accountable 2) examine and correct any failures in the system that allowed this behavior to happen and 3) take a forward-looking systemic view at the agency’s organization.

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