Evening Links 2-17

February 17, 2010

Worldwide cumulative current account (Wikipedia) Interesting chart…

Fed officials debated shrinking balance sheet (Bloomberg) The latest FOMC minutes were released. The Fed is ever so slowly moving towards shrinking its balance sheet. Most likely it will happen without outright asset sales. Bernanke can let the balance sheet shrink slowly as mortgages underlying MBS are prepaid.

The Fed’s real exit strategy (Hussman) While the Fed exits, Treasury will pick up the slack.

The $550k student loan burden (Pilon, WSJ) This is not a typical amount of debt, but even much smaller levels can be so burdensome as to make higher education not so valuable. Again, if you define the benefit of higher education as the extra income you’ll earn over your lifetime as a result of getting a degree, then you have to compare that against the cost of the debt incurred to pay for it. Student debt can be so oppressive as to cancel out much of the extra income. If you could strategically default on student loans there might be a way out. But student debt can’t discharged easily. (at all?)

SEC: BofA fired counsel to keep Moynihan, not for advice (Stempel, Reuters) So, uh, this is weird. Did the SEC just undermine Andrew Cuomo’s case against Ken Lewis? In his complaint accusing Lewis of securities fraud, Cuomo alleges that BofA had fired its general counsel, Timothy Mayopolous because he said the bank should disclose Merrill’s growing losses. But the SEC, which doesn’t want to bring charges against Lewis individually, said Mayopolous was fired to keep now-CEO Brian Moynihan from leaving the bank. Hmmm.

Tiger to apologize, discuss future on Friday (Lamport-Stokes, Reuters)

Tea party lights fuse for rebellion on right (Barstow, NYT) Interesting and detailed piece. ht CB

Job-years (Felix)

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