Wednesday, September 25, 2013

Risk Management Association Predicts QE Exit Smooth Landing

An EPJ reader writes:
I work in commercial banking as an underwriter. I am a student of Austrian economics and I am always bringing up interest rate risk and the effects of an interest rate shock on our bank to our leadership. I am also a member of the Risk Management Association (RMA) of which I receive a monthly newsletter. Usually there is some good writing in their, but have a look at the image of their most recent cover titled "Graceful Exit - Predicting a smooth landing for the economy as the Fed ends QE". It gives me the heeby geebies when I see things like this coming out of an organization as influential on commercial bankers as RMA is. 

Note the RMA article is written by Mark Zandi, probably the biggest apologist in the country for government economic interventions. All you need to know about Zandi is that he is chief economist of Moody’s Analytics, where he directs economic research. He is a cofounder of, which Moody’s purchased in 2005. Which means that it was under Zandi's watch at Moody's that they missed the entire subprime crisis and subsequent overall financial crisis.

Zandi's pro-government intervention report on the impact of a crony economic stimulus package on the United States economy was cited by Christina Romer and Jared Bernstein in their report on President Barack Obama's proposed American Recovery and Reinvestment Plan, which became the American Recovery and Reinvestment Act of 2009.

So now he is puffing the Fed, not surprising.


  1. When has the economy ever had a smooth landing?

  2. Mark Zandi, in Calculated Risk PDF Document, ... ... gave testimony before the Joint Economic Committee on October 11, 2013, stating “equities ... have been slowly grinding lower since mid-September." Zandi, makes the case that Congress should end the shutdown and reverse the sequester in order to boost the economy.