Friday, January 31, 2014

Yellen Congressional Testimony Set

Incoming Fed Chair Janet Yellen has been scheduled to appear at a House hearing on February 11.


  1. On Death and Derivatives

    One place to start is to note that JP Morgan Chase had, at the end of 2012, a mind boggling, but only silver medal, $69.5 Trillion with a ‘T’ gross notional Deriviatives exposure . While the gold medal for exposure to Derivative risk goes to …Deutsche Bank, with $72.8 or €55.6 Trillion Gross Notional Exposure. Gross Notional means this is the face value of all the derivative deals it has signed. Which the bank would be very quick to tell you would Net Out to far, far less. Netting Out, for those of you who do not know just means that a bet/contract in one direction is considered to balance or cancel out a similar sized bet/contract betting the other way. But as I wrote in Propaganda War – Risk Weighted Lies and further in Propaganda Wars – Balance Sheet Instabilities ,

    …this sort of cancelling out is fine on paper but in reality is more akin to people trying to swap sides in a rowing boat.

    Both of the men who killed themselves were intimately concerned with judging and safeguarding their bank from risk.

    maybe she could address derivatives?

  2. May The Farce Be With You – Janet Yellen Compares Bernanke to Obi-Wan Kenobi

    Not from The Onion, but from the Wall Street Journal we learn that:

    Officials held a series of ceremonies honoring Mr. Bernanke in the past few days. At a dinner Tuesday evening among senior officials, Ms. Yellen likened Mr. Bernanke to Obi-Wan Kenobi, the wise, experienced Jedi Knight mentor to his protégé Luke Skywalker in "Star Wars" movies. She jokingly imagined Mr. Bernanke advising her to trust in the Fed's statement of objectives, a document that lays out its goals for inflation and jobs, according to someone familiar with the event.

    Mr. Bernanke received a standing ovation from Fed officials at the FOMC meeting in its boardroom earlier Tuesday. And he was toasted Thursday by hundreds of Fed staff packed into an atrium at the Fed's Eccles Building, where they were served peanuts, popcorn and crackerjacks in honor of Mr. Bernanke's love of baseball.

    Kill. Me.

  3. I'm surprised it wasn't champagne and caviar, served in diamond encrusted glasses. Why not? It's not like they're short on money- just print some more!