Grant Calls Fed’s Balance Sheet an `Economist Nightmare’

March 27, 2008 3:00am by

00:00 Fed intervention in credit market crisis
07:16 Credit crisis a "scandal"; Freddie and Fannie
09:23 Impact of Fed action on inflation, dollar   
14:29 Is there a silver lining in credit crisis?
Running time 15:42

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James Grant, editor of Grant’s Interest Rate Observer, talks with Bloomberg’s Pimm Fox in New York about the Federal Reserve’s intervention in the credit market crisis and its impact on the value of the U.S. dollar.

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Thanks, Laura!

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What's been said:

Discussions found on the web:
  1. MarkM commented on Mar 27

    And hat tip to BDG123, who had this up yesterday?

  2. Spectator commented on Mar 27

    Great to see someone call a spade a spade. It’s a scandal, indeed. When will the guilty, i.e. Helicopter Ben and Greenspan, be taken to the woodshed.

  4. Dee Leverage commented on Mar 27

    It’s all relative…as the Prophet Of Margin Calls, this is not a nightmare…it’s my life’s dream. Did you guys see that blog I linked to on JP? I have to have a talk with the superstar CEO over there.

    JPM Rolls Fed

  5. bluestatedon commented on Mar 27

    yep, the bloomberg vid crashed Firefox. I’ll wait for the transcript…

  7. DonKei commented on Mar 27

    Excellent, lucid and witty observations (didn’t crash me, but I’m Windows XP).

    It is all a scandal, as he says. The fed will soon be nothing more than a highly-leveraged investment bank fortuitously owned by the folks that print money and have a nuclear stockpile to back it up.

    I suppose when re-leveraging fails, we can always just take what we need at the point of an ICBM.

  8. shtove commented on Mar 27

    Nice line in sarcasm.

  9. Ritchie commented on Mar 27

    T-shirt/logo for the Fed:

    Got bilk?

  10. ef commented on Mar 27

    The beginning of the 21st Century seems to be defined by the word: “incompetents”.

    It’s nice someone recognizes savers. They don’t get much respect. And they are getting clobbered to saves the behinds of reckless speculators by a nontransparent, dubious, politicized Fed.

    Good points:

    • “The Fed is taking a big risk with its reputation and the US dollar. The Fed is taking interventions as dramatic as those performed in the 1930’s without the extenuating circumstances of the depression.”
    • “Corruption of central banking. Corruption of the currency. It is the measuring of gains and losses and ought to be a honest measuring stick.”
    • “We ought to ask ourselves what manner of incompetents, at the public policy and professional level, lead us into this mess.”
    • “We have brought this on ourselves collectively through unexampled incompetents. As UBS has said, this is the greatest failure of ratings and risk management ever. It is a scandal.”

    “Greatest failure”, another phrase for the beginning of the 21st Century.

    I hope our media makes this scandal a high priority to educate and inform the citizens. But I’m not sure they are up to the task.

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