By Krishna Guha & Gillian Tett
By common consent, Paul Volcker is never happier than when he is casting for trout in a river or lake, far from the chaos of New York and Washington.
Then, the former chairman of the Federal Reserve will happily wait long hours before landing a catch, and afterwards share in the bonhomie of his fellow fishermen. “When he is away fishing he is a delight,” says Jim Wolfensohn, the former World Bank chief who hired Mr Volcker to join his investment firm on leaving the Fed. “He lets his guard down and nobody is interested in his views on interest rates.”
That quiet patience is now serving Mr Volcker well. Read more
The Paraguayan central bank today lifted its 2010 GDP estimate to 6 per cent, after having seen its economy shrink by 3.8 per cent in 2009. It’s a huge turnaround (it was expecting just over 4 per cent growth in 2010 before). So big, in fact, that the economy will recover to above its 2008 levels.
And here’s the happy graph - Read more
Two more Democratic Senators defected today, leaving Fed Chairman Ben Bernanke’s chances of being re-confirmed before his term ends less than a sure thing.
If Mr Bernanke isn’t confirmed by January 31, it’s unclear what will happen, but a likely outcome is that Donald Kohn (hardly more a populist champion of Main Street than Mr Bernanke) will step in as interim chair until Mr Bernanke (or another candidate) is confirmed by the Senate. Certainly Mr Kohn’s assent to Fed chair can’t be the goal of Mr Bernanke’s critics. So are they pushing the president to nominate someone else for the Fed chair? Are they even pushing Mr Obama to nominate candidates who represent a “clean break from the failed policies of the past” for the long-open seats on the Fed’s board of governors?
If so, they’re not doing so publicly.
And if the goal is to move the Fed in a new direction, why not? Read more
Worth reading both The Economist piece, and Clive Crook’s reaction to it. Gems include:
On nomenclature: Read more
The Argentinian justice system has ruled Congress should decide whether central bank governor Martin Redrado will keep his job. It was the courts that reinstated Mr Redrado following his presidential sacking. They also found in Mr Redrado’s favour, preventing the central bank from transferring a disputed $6.6bn foreign reserves, as requested by the President. The courts maintained that injunction today.
Venezuela could struggle to achieve its target of 4.3 bolivars to the dollar, having executed part of its plan to transfer funds from the central bank to the country’s development fund.
$3bn out of a planned $7bn has been transferred from the Venezuelan central bank to the country’s off-budget development fund, Fonden. The remaining $4bn may be transferred next month. Read more
Western economists are accusing China of irresponsibility as it has today reaffirmed its commitment to “moderately loose monetary policy”. But irresponsible for what? Read more
I am reminded of a cartoon on bankers’ bonuses: two men walking along, and one explains to the other: “Apparently, if you don’t pay them enough, they go and bugger up someone else’s business.” If Obama’s proposal is made law, thousands of traders will be out of a job. What will they do?
Ukraine’s central bank will not give $2bn of IMF funds to the government to finance the state budget, though is willing to sell the foreign currency in exchange for the Ukrainian hryvnia. “The central bank is ready to sell any necessary amounts of foreign currency to the finance ministry to secure the government’s external payments, if necessary,” the central bank said in a statement on its website (not yet translated).
The Romanian Finance Minister has announced today that if their IMF loan payments are re-started, funds will be used to plug the deficit. (Notice who’s calling the shots there.) Read more