Jeffrey Lacker, president of the Richmond Fed, today gave an upbeat view of where the economy is heading in 2010. So upbeat, in fact, that explicitly answered the question: How can economists be so optimistic?
His view for 2010:
Putting the whole picture together, I think the most likely outcome is that the economy will grow at a reasonable pace this year – housing should continue to recover from a very depressed state, consumers should gradually expand spending, business investment should make something of a comeback, and these components of demand should overcome a continuing drag from commercial construction.
His explanation for his optimism:
Darrell Issa, the ranking Republican member of the House oversight committee who has been spurring on an investigation into the governments role in the AIG ‘backdoor bail-out’, today asked the committee’s chair to subpoena “all relevant documents from the Federal Reserve Board and the Treasury Department” and “obtain information” Ben Bernanke and Hank Paulson, the Treasury secretary at the time of the decisions.
It’s a significant move.
Am I alone in feeling increasingly uncomfortable with the the global clamour for new taxes on banks and bankers?
Do I feel sorry for put-upon investment bankers with new tax demands? No. Am I comfortable with the greed culture in Wall Street and the City of London? No. is Barack Obama justified in asking for taxpayers’ money back? Of course. That is why we can give one cheer to the bonus supertax ideas in the UK and France; the US bank levy and the International Monetary Fund process of seeking ways to ensure the financial sector pays for its sins.
So says Argentine central bank governor Martin Redrado, after a great deal of confusion. Judge Thomas Griesa was reported as lifting the ban, but hours later Mr Redrado told the press he could not access the account. The embargo was part of a long-running legal action by bondholders still unpaid since the 2001 Argentinian default. The dispute is not directly related to the Argentinian President’s recent (indeed, ongoing) attempts to unseat Mr Redrado.
The Bank of Israel is rumoured to have bought about $100m of foreign currency today. Traders have told Reuters that this is the fifth forex intervention in 2010, as the bank tries to slow the rapid appreciation of the shekel. The currency has gained about 3 per cent against the US dollar since the start of the year as foreign banks have sold dollars. Israeli inflation during December has just been released: it was 3.9 per cent, up from 3.8 per cent in November.
The Chilean central bank said the historic low of 0.5 per cent will be held “at least until the second quarter of 2010.” They also reiterated their plan to remain flexible in their policies “so that projected annual inflation stands at 3 per cent over the policy horizon.” In an upbeat statement, the bank predicted falling short-term inflation, stable medium-term inflation, expanding growth and declining unemployment.