Weekend Reading
Issac Chotiner interviewing Richard Koo.
Today, the excess reserves in the banking system is $3.6 trillion because of all the quantitative easing that the Federal Reserve has done. The amount of excess reserve in the United States is two thousand times the amount at the time of the Lehman crisis, in 2008. Two thousand times.
Huh? The Fed got rid reserve requirements in March 2020, there is no such thing as excess reserves anymore. Really this makes no sense. Bank reserves are, and will, stay ‘ample’ according to Fed policy, but here is an argument against the policy
I hope you don’t find yourself between Larry Summers and a camera, here he is getting more attaboys in an interview.
Given the Fed is trying to channel him, a timely history of Volker and monetarism from 1979 to 1982.
Review of Penny Mordaunt’s memoir—the author is not a fan.
Though she lambasts Britain’s apparent tendency towards nostalgia several times in the book, she is imprisoned by outdated notions. Her Britain of queues, rain, and “Sunday rituals” was a stock image when George Orwell wrote about it during the Second World War. The actual Britain, a bewildering mixture of hypermodernity and feudalism, where personal identity is thin, beliefs are fluid, and people mobile, is richer and stranger than anything Mordaunt can conceive of. But she would rather think about breakfast. She ticks off a Full English’s ingredients, then writes: “Not surprisingly, after such breakfast bowel-bashing there blossoms a stool of biblical proportions. Exodus by Caesarean section.”
In the absence of a well-defined mission, the FHLBs crop up in unexpected parts of financial markets as they pursue profitable opportunities. But they present what should by now be a well understood warning sign – structural incentives to increase credit beyond what the lender could continue to make available under stress.
You definitely wouldn’t establish the Federal Home Loan Banks now. Tarullo is pretty big time, so maybe the authors get some traction.
“Behold the terrible majesty of the humble bank deposit.”
Kansas City Fed paper flagging reasons the treasury market may have an adverse reaction to QT.
On one hand, they are probably good at their jobs. On the other hand, seems not great. Meet the ex CIA agents deciding facebook content policy
Chile will be voting on a bizarre new constitution in September.
Sri Lanka and the global revolt against the laptop elites
Sri Lanka shows us what happens when policy is shaped according to the desires and prejudices of the new elites rather than the needs of ordinary people. Lockdown may have been a boon for the laptop elites and for some billionaires, but it was incredibly harmful for many working-class people in the West and for millions of hard-up people in the global South. The green ideology may provide the new elites with a sense of purpose, flattering their narcissistic delusion that they are saving the planet from a man-made heat death, but it hits the pockets of workers in the West who will end up paying for the Net Zero madness, and it inflames hunger and destitution in those parts of the world not yet as developed as the West.
Review of The Man From The Future, by Ananyo Bhattacharya. John von Neumann was a bright fellow.
