Robert Wenzel's speech at the NY Fed, April 2012

From the Economic Policy Journal;

   Thank you very much for inviting me to speak here at the New York Federal Reserve Bank.

Intellectual discourse is, of course, extraordinarily valuable in reaching truth. In this sense, I welcome the opportunity to discuss my views on the economy and monetary policy and how they may differ with those of you here at the Fed.

That said, I suspect my views are so different from those of you here today that my comments will be a complete failure in convincing you to do what I believe should be done, which is to close down the entire Federal Reserve System

My views, I suspect, differ from beginning to end. From the proper methodology to be used in the science of economics, to the manner in which the macro-economy functions, to the role of the Federal Reserve, and to the accomplishments of the Federal Reserve, I stand here confused as to how you see the world so differently than I do.

I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality.

10 Most Systemically Risky Financial Organizations

"As part of the US policy response to the global crisis, the Dodd-Frank Financial Reform Act calls for regulators to identify systemically risky financial firms – the sort that took the US financial crisis global. But how to identify these firms remains unclear. Some claim the task is impossible. This column begs to differ and names the 10 most systemically risky financial firms in the US."

The above is a quote from an article on Naked Capitalism that is a great post. It describes a study conducted by four NY University professors to answer the question, what companies are financially risky. This list does not pull the covers back from any secret, it does confirm that there has been little resolution to the problems that conspired, through the systemically connected too-big-to-fail organizations, to cause the financial crisis escalate and ultimately fall onto the backs of the global taxpayers and holders of US Treasury, and other sovereigns, debt.

Here is a chart published in the article linked to above. It includes three more large insurer's which adds credibility for me. That's because insurer's in general are lenders of capital for commercial real estate projects, many of which are non-performing assets.

California Budget Crises, A Look into OUR Future?

The new fiscal (budget) year in California begins on July 1, 2010. Between now and when the Democratic controlled legislature agrees on a new plan, there is going to be a lot of public discussion about how the state government will close a deficit of $19.1 billion from a general fund budget of $83.4 billion. During the past year in the golden state we have already seen student protests over tuition increases with program cutbacks. To set the stage for understanding where they start from, the editorial board at the Seattle-Times summarized the California fiscal condition like this...

"New York City, Where the Future Comes to Rehearse"

Lately I am spending time reading, less time posting. My reading is on the topic of financial crises. It is not a cheery subject but it is also less frightening than I would have guessed. There have been a number of crises in my lifetime around the world. The good news is that they are survivable, though not necessarily without harm. Examples are the oil shock in the US in the early 1970's accompanied by high inflation lasting into the early 1980's, the Asian currency crisis in 1997-98, and Argentina's domestic and external debt default in 2002. The recovery from these episodes lasted many years. In Argentina's case, they may still not be able to borrow at preferred rates and may have difficulty finding a lender. What possible other harm is there?