Bernanke musters maximum revolving-door dignity

April 16, 2015

The Fed boss turned blogger will advise $25 bln hedge fund Citadel. Critics may object, and the move won’t help the U.S. central bank’s image of being above the fray. But former public servants deserve to work for pay. At least Bernanke waited over a year and didn’t join a bank.

Dizzying revolving door risks overdone response

November 20, 2014

Going from a U.S. government job to the private sector raises conflicts, as shown by events at Goldman. And a banker’s possible role at the Treasury is under fire. Such moves warrant clear rules, but cross-fertilization is valuable. It would be a shame to make it too hard to do.

Review: “House of Debt” diagnosis beats remedies

June 13, 2014

Atif Mian and Amir Sufi make a compelling case that excess consumer debt caused the U.S. Great Recession’s severity, but their mortgage bailout proposal would make matters worse. Their shared value mortgages might help, but old-fashioned tight money is a simpler and better way.

Fed fundamentalists deserve fresh listen

June 3, 2014

After years of expanding policy and remit, the U.S. central bank risks biting off more than it can chew. Hawkish economists persuasively argue this creates a risk of failure, which could undermine Fed independence. More important, the Fed has to stop giving cover to a lazy Congress.

Just ditch forward guidance

By Edward Hadas
March 10, 2014

Central banks’ long-range rate forecasts prod excessive financial risk-taking and may slow necessary tightening, says the Bank for International Settlements. Forward guidance fails the risk-reward test. Although the BIS didn’t say it, the policy just doesn’t stack up.

ECB might be the most effective big central bank

By Edward Hadas
January 28, 2014

The Frankfurt institution gets less respect than the Federal Reserve, and trails both the Fed and the Bank of Japan in asset purchases. But the ECB has successfully pushed for reforms that really help the economy. Next step: find low-pain ways to write down sovereign debts.

Commodities set to distinguish themselves

January 3, 2014

From gold to grain, raw materials will in 2014 trade less in line not just with equities, but each other. That’ll continue a trend started in the summer. Thank a calm euro zone and the prospect of a Fed taper. Commodity costs set by fundamentals, not fear, would be good for many.

Lael Brainard isn’t the only Fed no-brainer

November 7, 2013

The departing Treasury official acquitted herself nobly helping the world understand Washington’s profligate and quixotic ways. She’s a confirmable choice on the central bank’s board of governors. Filling other Fed vacancies quickly is President Obama’s other obvious task.

Billionaire offers YouTube clue to U.S. torpor

September 25, 2013

Ray Dalio has taken to video to argue that Uncle Sam is stuck in a deleveraging recession, occurring on a 70 to 80 year cycle. Fed policy largesse, meanwhile, keeps prices stable as debt declines. The Bridgewater founder’s hedge fund success makes it an idea worth spreading.

Fed politics may just preserve Fed’s independence

September 20, 2013

Inadvertently, that may be the case. The president’s guy, Larry Summers, was torpedoed by Congress, suggesting political meddling. But if the Fed’s internal choice, Janet Yellen, gets the job, isn’t the central bank’s power maintained? It’s a messy way to the right outcome.