Repo market big, but maybe not *that* big

June 25, 2012

Maybe the massive U.S. repo market isn’t as massive as we thought. That’s the conclusion of a study by researchers at the Federal Reserve Bank of New York that suggests transactions in the repurchase agreement (repo) market total about $5.48 trillion. The figure, though impressive, is a far cry from a previous and oft-cited $10 trillion estimate made in 2010 by two Yale professors, Gary Gorton and Andrew Metrick. The Fed researchers, acknowledging the “spotty data” that complicates such tasks, argue the previous $10-trillion estimate is based on repo activity in 2008 when the market was far larger, and is inflated by double-counting.

MIT’s Johnson takes anti-Dimon fight to Fed’s doorstep

June 25, 2012

Simon Johnson is on a mission. The MIT professor and former IMF economist is trying to push JP Morgan CEO Jamie Dimon to resign his seat on the board of the New York Fed, which regulates his bank. Alternatively, he would like to shame the Federal Reserve into rewriting its code of conduct so that CEOs of banks seen as too big to fail can no longer serve.

BoEasing

June 22, 2012

The Bank of England is finally catching a break. With Britain’s economy officially in recession, the BoE had been constrained from further monetary easing by a stubbornly high inflation rate. But as the global economy stumbles and Europe’s crisis rages unabated, UK price pressures may be giving way.

Get ready for QE3 if things don’t get better soon

June 20, 2012

Ben Bernanke appears to be reluctantly gearing up for a third round of large-scale Federal Reserve bond buying, so-called QE3. Millan Mulraine of TD Securities captures just how likely further monetary easing is becoming following the Fed’s decision on Wednesday to expand Operation Twist.

JP Morgan Houston janitor wants Jamie Dimon to walk in her shoes

June 20, 2012

Just as the proverbial shoemaker’s children can go without shoes so, apparently, can a cleaner of corporate office bathrooms not have time for a bathroom break. And with the lack of time to use one of the 24 bathrooms Adriana Vasquez must clean in a five-hour shift at the JP Morgan Chase Tower in Houston, Texas – 22 of them with multiple stalls – comes the absence of a living wage.

Hints of internal Fed divisions on Twitter?

June 19, 2012

Additional reporting by Ann Saphir. Updated with New York Fed and other details.

Immigrant small business owners: bringing big bucks to Main Street

June 15, 2012

What would Main Street America look like without immigrants?

Picture vastly fewer restaurants (37% of the industry’s ownership is foreign-born), hotels and accommodation (43% foreign-born ownership), dry cleaning and laundry facilities (54% foreign-born), and nail salons (37%). It would be that much harder to go out for a treat (bakeries, 32% immigrant-owned), fill up the tank (gas stations, 53%), or grab a bottle of wine on the way to a dinner party (beer, wine and liquor stores, 42%).

Euro zone survival is in the eye of the beholder

June 14, 2012

Despite all their years of experience and complex mathematical models, for economists the question of the euro zone’s survival really has them at the mercy of national bias… at least in terms of where their employer is based.

Central bankers vs. politicians: High-stakes chicken?

June 13, 2012

Are politicians playing chicken with central bankers? More to the point, if the U.S. Federal Reserve or the European Central Bank step up, yet again, to protect their economies from the global slowdown, will it take U.S., German, Spanish, Italian, Greek and other governments off the hook?

Channels of contagion: How the European crisis is hurting Latin America

June 8, 2012

If anything positive can be said to have come out of the global financial crisis of 2008-2009, it may be that the theory arguing major economies could “decouple” from one another in times of stress was roundly disproved. Now that Europe is the world’s troublesome epicenter, economists are already on the lookout for how ructions there will reverberate elsewhere.