Guau!!!! Paul Volcker again near the top

[Southernguy]

CNNMoney.com
Obama picks Volcker to head economic group
Wednesday November 26, 8:14 am ET
President-elect Barack Obama will name former Federal Reserve Chairman Paul Volcker as the head of a special economic advisory board, sources tell CNN.The group, which could include another 8-16 members, is expected to provide the new administration with outside advice on dealing with the nation's financial crisis. It will exist for two years and will meet roughly once a month.
Obama is expected to make the announcement Wednesday during a press conference in Chicago.
Volcker presided over the Fed from 1979 to 1987, a period of extreme financial unrest. Volcker is known for raising interest rates to historic highs under the Carter and Reagan administrations in order to combat out-of-control inflation. He also served in a variety of positions with the Treasury, Chase Manhattan Bank, and the New York Fed.
Obama will also appoint University of Chicago economics professor Austan Goolsbee as the board's chief economist.
Goolsbee, who was a prominent adviser in Obama's election campaign, is a member of the panel of economists that advises the Congressional Budget Office. He is also a a research associate at the National Bureau of Economic Research.
-- CNN's Suzanne Malveaux contributed to this report.

[jimmygu3]

Re: Guau!!!! Paul Volcker again near the top

CNNMoney.com
Obama picks Volcker to head economic group
Wednesday November 26, 8:14 am ET
President-elect Barack Obama will name former Federal Reserve Chairman Paul Volcker as the head of a special economic advisory board, sources tell CNN.The group, which could include another 8-16 members, is expected to provide the new administration with outside advice on dealing with the nation's financial crisis. It will exist for two years and will meet roughly once a month.

Obama is expected to make the announcement Wednesday during a press conference in Chicago.
Volcker presided over the Fed from 1979 to 1987, a period of extreme financial unrest. Volcker is known for raising interest rates to historic highs under the Carter and Reagan administrations in order to combat out-of-control inflation. He also served in a variety of positions with the Treasury, Chase Manhattan Bank, and the New York Fed.
Obama will also appoint University of Chicago economics professor Austan Goolsbee as the board's chief economist.
Goolsbee, who was a prominent adviser in Obama's election campaign, is a member of the panel of economists that advises the Congressional Budget Office. He is also a a research associate at the National Bureau of Economic Research.
-- CNN's Suzanne Malveaux contributed to this report.

I'd like to know what this means for Poom. Volcker was an inflation crusher as Fed chair. With Asian investment ending, Treasury yields will rise so Fed rates will have to follow, no? Or will rates stay low as aggregates explode through debt monetization and/or outright printing? This sounds unacceptably counter to Volcker's style, IMO. If CPI inflation gets out of hand, what will Volcker advise Obama to do? Would they let the dollar depreciation take its course and begin defending the dollar at a certain point?

Jimmy

[blazespinnaker]

Re: Guau!!!! Paul Volcker again near the top

I'd like to know what this means for Poom. Volcker was an inflation crusher as Fed chair. With Asian investment ending, Treasury yields will rise so Fed rates will have to follow, no? Or will rates stay low as aggregates explode through debt monetization and/or outright printing? This sounds unacceptably counter to Volcker's style, IMO. If CPI inflation gets out of hand, what will Volcker advise Obama to do? Would they let the dollar depreciation take its course and begin defending the dollar at a certain point?

Jimmy

I agree, Volker will encourage Obama to consider approaches which will minimize the chances of inflation getting out of control.

[tsetsefly]

Re: Guau!!!! Paul Volcker again near the top

I agree, Volker will encourage Obama to consider approaches which will minimize the chances of inflation getting out of control.

But how much influence will Volker have over the Fed?

If I remember correctly Volker does not think high rates are the answer in this situation...

Also if Volker thinks inflation should be target you can bet he will not be listened to by the Obama team who will pursue aggressive government expansion and the creation of programs....

[GRG55]

Re: Guau!!!! Paul Volcker again near the top

I'd like to know what this means for Poom. Volcker was an inflation crusher as Fed chair. With Asian investment ending, Treasury yields will rise so Fed rates will have to follow, no? Or will rates stay low as aggregates explode through debt monetization and/or outright printing? This sounds unacceptably counter to Volcker's style, IMO. If CPI inflation gets out of hand, what will Volcker advise Obama to do? Would they let the dollar depreciation take its course and begin defending the dollar at a certain point?

Jimmy

No. Not immediately. The Fed desperately wants a steeper yield curve to assist with the rebuilding of bank balance sheets; one reason it is cutting short rates now. They want to see long rates stop falling.

If long rates stop falling, or even start to rise, the Fed will be even slower than usual before it ever thinks about raising administered rates. With the US economy spinning down ever faster [check the econ stats so far this week?] I would not be surprised if we see a half-decade or more with Fed rates below 2%.

[Jam]

Re: Guau!!!! Paul Volcker again near the top

Volcker is 81, almost as old as Greenspan (82). For his previous stint with the government, he was in his youthful fifties, so he may have had some fresh ideas on how to deal with the crisis, and energy to implement them. Now, I don't see how grandpa Volcker can have his voice cut through, and, more importantly, if he has enough of gray matter left to come up with a good way out of the current situation. Not that I have anything against old people, but it reminds me of the leadership of the former Soviet Union (Brezhnev died at the age of 76) when people way past their retirement age, not to mention their prime, hold on to the power until you pry it out of their cold dead fingers.

[Jam]

Re: Guau!!!! Paul Volcker again near the top

...or is it just a symbolic gesture to show that the new administration is serious about taming inflation. In this case, what better symbol than Volcker?

[D-Mack]

Re: Guau!!!! Paul Volcker again near the top

Volcker is 81, almost as old as Greenspan (82). For his previous stint with the government, he was in his youthful fifties, so he may have had some fresh ideas on how to deal with the crisis, and energy to implement them. Now, I don't see how grandpa Volcker can have his voice cut through, and, more importantly, if he has enough of gray matter left to come up with a good way out of the current situation. Not that I have anything against old people, but it reminds me of the leadership of the former Soviet Union (Brezhnev died at the age of 76) when people way past their retirement age, not to mention their prime, hold on to the power until you pry it out of their cold dead fingers.

Still 12 years younger than his pal, David Rockefeller from the Trilateral Comission

[tsetsefly]

Re: Guau!!!! Paul Volcker again near the top

...or is it just a symbolic gesture to show that the new administration is serious about taming inflation. In this case, what better symbol than Volcker?

they are definately not interested in tamming inflation especially at the cause of short term unemployment added to the unemployment that will be caused by the crisis...

[Spartacus]

Volcker helped set the speed & tone of this crisis

IIRC, and if reports are accurate, as head of the IASB he fought hard to have mark to market implemented quickly.

(not saying it's good or bad - the meltdown would have happened anyway, its shape was partly due to PV)

Google this:
iasb volcker "mark to market"

[Chris Coles]

Re: Guau!!!! Paul Volcker again near the top

I believe that Obama has another aiming point, to keep the existing players onside until everyone can see they are not succeeding. That way, when the SHTF as it will, he can then change the team without having to be tarred with the same brush.

If they instead succeed, he is onside, if they fail, then it is they and not some new, untried team that fails. A very intelligent course of action. Covers both angles.

[c1ue]

Re: Guau!!!! Paul Volcker again near the top

Chris Coles has got it in one.

Obama is simultaneously gladhanding his FIRE contributors and giving himself deniability.

If the 'dream team' fixes everything, he can say "I did that. I appointed the best people'.

If the 'dream team' fails, he can say "Its time for CHANGE".

[metalman]

Re: Guau!!!! Paul Volcker again near the top

i am so short the 'volcker' rally. what a pile of bullshit... as if the man made the circumstances he was in in 1980... debt wiped out by inflation, usa a creditor, high inflation... all he did was pull the lever. sheesh. he pulled the same lever today we go power-flushed down the toilet we're already in.

[bart]

Re: Guau!!!! Paul Volcker again near the top

i am so short the 'volcker' rally. what a pile of bullshit... as if the man made the circumstances he was in in 1980... debt wiped out by inflation, usa a creditor, high inflation... all he did was pull the lever. sheesh. he pulled the same lever today we go power-flushed down the toilet we're already in.

He didn't make the circumstances.
He did far far more than just pull a lever.
Carter had enough sense to appoint him.
Reagan had enough sense to keep him to get a job done.
If you have read any Volcker, you know he won't pull the same levers - the conditions are far from what they were in 1980.

Volcker is imperfect, but is also the only economist type at that level who knows what responsibility and consequences truly mean. In my opinion, if he is ignored or shuttled off or resigns or similar, then the future is much darker than it appears now.

[ST]

Re: Guau!!!! Paul Volcker again near the top

i am so short the 'volcker' rally. what a pile of bullshit... as if the man made the circumstances he was in in 1980... debt wiped out by inflation, usa a creditor, high inflation... all he did was pull the lever. sheesh. he pulled the same lever today we go power-flushed down the toilet we're already in.

He did a lot more than that .... he constructed Basel I - the world is about to learn why it was necessary, again.