REPORT: Insider Trading Case Against Goldman Sachs Trader (For Getting Info From Federal Reserve)

Jesse's Cafe Americain reports:

It appears that a criminal case is being brought against a 'rogue trader' at Goldman Sachs who was caught obtaining confidential documents from a 'rogue central banker' at the NY Fed. Informed rumour has it that the defendants may condescend to plead guilty to a misdemeanor. Who says that crime doesn't pay?

This must be a low-level guy. Normally, it is Lloyd Blankfein and Jan Hatzius, who are telling Bill Dudley what Fed policy should be.

-RW

Financial Emergency!!!

(ht Pippa Malmgren)

FOMC Statements Have Grown in Size and Complexity

Rubén Hernández-Murillo and Hannah Shell from the St Louis Fed write:

Over the years, the Federal Reserve has developed numerous communication tools aimed at increasing transparency. One tool in particular has evolved significantly—post-meeting statements by the Federal Open Market Committee (FOMC), the body within the Federal Reserve in charge of setting monetary policy. The FOMC began releasing these statements in February 1994. Initially, the statements provided

This is What is Keeping the Lid on Consumer Price Inflation Indexes

The dramatic drop in gasoline prices is the result of the oil shale and fracking boom in the US.

Enjoy it while it lasts because the Federal Reserve is continuing to print huge amounts of new money, eventually the money printing will over power the price declines that are resulting from the gains in productivity.

This is How Fed Monetary Policy is Being Driven

Chart of M2 money supply, quarterly change from a year ago,



Fed money supply growth is always quite erratic. And the last 10 years have been no exception. Is it any wonder that the economy appears to be on some kind of roller coaster?

Benn Steil and Dinah Walker at the Council on Foreign Relations highlight how erratic thinking can be among Fed officials:

St. Louis Fed President James Bullard continues to burnish his reputation as the FOMC’s least predictable member, reversing course on policy for the second time in 3 months—going from dove to hawk and now back to dove again.  Having as recently as August publicly advocated a rate rise in early 2015, he is now calling for the Fed to halt its monthly taper of QE3 bond purchases, citing falling inflation expectations.

But the Fed’s own preferred measure of inflation expectations, the 5-year 5-year forward breakeven inflation rate, has barely moved since the FOMC’s September meeting—down from 2.4% to 2.3%....Bullard has always defended his policy calls as data-driven, but in this case he seems to be navigating more by gut calls as to where the data may be moving in the future.  

For a complete discussion of how these manipulations distort the economy and cause the business cycle. see:  Austrian School Business Cycle Theory by Murray Rothbard

Cato Shrugged Opens Center to "Challenge" Fed

The Cato Institute has announced that it is opening "a new research center that its president says will fundamentally challenge the central bank and its monetary policy." 

So just how is Cato going to "challenge" the Fed?

Apparently by giving away the game and assuming that it is a good idea that the Fed should be manipulating the money supply and interest rates in the first place.

The Washington Examiner reports:

Cato scholars will weigh in on the topics confronting monetary policy makers, such as how the Fed should move back toward normal monetary policy after amassing a $4.5 trillion balance sheet while trying to boost the economy in the wake of the 2008 financial crisis.

They also will work in their capacity as a libertarian think tank to affect legislative efforts relating to the Fed, such as a recent effort by House Republicans to require Fed officials such as Chairwoman Janet Yellen to compare their monetary decisions to those that would have followed from a simple monetary policy rule.

If you ever want to show someone an excellent example of why you should never trust Beltarians, this new attempt by Cato to "challenge" the Fed is it.

The Fed shouldn't be moving back toward any "normal" Fed policy, The Fed has been a disaster since it started. (SEE; The Fed Flunks). It should be ended.

Further, "a simple monetary policy rule," is simply a method to determine the degree of  money inflation. It is simply an absurd concept promoted by government apologists, that allows cronies manipulating the government and the government, itself, to get their hands on newly printed money before others do. That's why the gap is growing between the super-wealthy and the rest of us (SEE:The Bottom 90 Percent: No Better Off Today Than in 1986).

Bottom line: Any Fed money printing is criminal activity.

And what does George Selgin, the new head of the Cato monetary center, say about this money printing criminality:

Selgin added that monetary policy rules that predictably set the value of the dollar are “reasonable compromises” short of his preference of ending the Fed.

Yes, another Beltarian, who "theoretically" wants to shrink government, but on a practical value considers it a "reasonable compromise," that it should continue to rob the people. This is just what the crony elitists love, inside the Beltway technocrats that couch their advocacy of continued government interventions in libertarian wrapping to confuse and dilute the libertarian message.

For the truth about the Fed and a real handbook on how to fight it, read Set Money Free: What Every American Needs To Know About The Federal Reserve by Chris Rossini. As Ron Paul put it, when commenting on the book: ".People looking to spread the ideas of liberty should consider buying multiple copies of this book to hand out to friends, relatives, and co-workers to show them why ending the Fed is key to restoring liberty, peace, and prosperity."

People who follow Ron Paul's advice are going to be doing a lot more to fight the Fed, then the criminal compromises that will be going on at Cato.

The Eventual Only Use for the US Dollar...

...if the Fed keeps printing billions upon billions of new dollars.

Carlyle Group To Get a Man on the Federal Reserve Board

It's all about insiders when it comes to the Federal Reserve.

A White House statement says President Obama will nominate two former U.S. Treasury Department officials for the Federal Reserve Board.

Obama's picks are Jerome Powell, an attorney who was a Treasury undersecretary for former President George H.W. Bush, and Jeremy Stein, a Harvard University economist who has advised the current administration.

David Rubinstein is popping champagne. Powell from 1997 through 2005, was a partner at The Carlyle Group, where he founded and led the Industrial Group within the U.S. Buyout Fund.

In addition to Carlyle, in the years since leaving the Treasury Powell worked at Bankers Trust Co.; the Global Environment Fund, a private-equity firm; and his own investment company. In other words a complete Wall Street-DC Corridor insider.

Stein is currently a professor at Harvard. From February to July 2009, Stein worked in the Obama administration as a senior adviser to Treasury Secretary and as a staff member of the National Economic Council.

According to the Crimson, Stein first joined Harvard as an assistant professor of finance at Harvard Business School from 1987 to 1990. From 1990 to 2000, he was a professor at the MIT Sloan School of Management, first as an associate professor of finance and eventually as the J.C. Penney Professor of Management.

Stein graduated summa cum laude from Princeton in 1983 with a bachelor’s in economics, earning his Ph.D. from MIT in 1986. Thus, another MIT econ PhD joins the hierarchy of the Fed. This will be the fifth.

The nominees must still be confirmed by the Senate.

The salary of Fed chairman Ben Bernanke is $199,700. The annual salary of the other Board members is $179,700.

The Coming Fed Bailout of Europe Must Be Stopped!

By Ron Paul


The economic establishment in this country has come to the conclusion that it is not a matter of "if" the United States must intervene in the bailout of the euro, but simply a question of "when" and "how". Newspaper articles and editorials are full of assertions that the breakup of the euro would result in a worldwide depression, and that economic assistance to Europe is the only way to stave off this calamity. These assertions are yet again more scare-mongering, just as we witnessed during the depths of the 2008 financial crisis. After just a decade of the euro, people have forgotten that Europe functioned for centuries without a common currency.

The real cause of economic depression is loose monetary policy: the creation of money and credit out of thin air and the monetization of government debt by a central bank. This inflationary monetary policy is the cause of every boom and bust, yet it is precisely what political and economic elites both in Europe and the United States are prescribing as a resolution for the present crisis. The drastic next step being discussed is a multi-trillion dollar bailout of Europe by the European Central Bank, aided by the IMF and the Federal Reserve

.

The euro was built on an unstable foundation. Its creators attempted to establish a dollar-like currency for Europe, while forgetting that it took nearly two centuries for the dollar to devolve from a defined unit of silver to a completely unbacked fiat currency note. The euro had no such history and from the outset was a purely fiat system, thus it is not surprising to followers of Austrian economics that it barely survived a decade and is now completely collapsing. Europe's economic depression is the result of the euro's very structure, a fiat money system that allowed member governments to spend themselves into oblivion and expect that someone else would pick up the tab.

A bailout of European banks by the European Central Bank and the Federal Reserve will exacerbate the crisis rather than alleviate it. What is needed is for bad debts to be liquidated. Banks that invested in sovereign debt need to take their losses rather than socializing those losses and prolonging the process of adjusting their balance sheets to reflect reality. If this was done, the correction would be painful, but quick, like tearing off a large band-aid, but this is necessary to get back on solid economic footing. Until the correction takes place there can be no recovery. Bailing out profligate European governments will only ensure that no correction will take place.


A multi-trillion dollar European aid package cannot be undertaken by Europe alone, and will require IMF and Federal Reserve involvement. The Federal Reserve already has pumped trillions of dollars into the US economy with nothing to show for it. Just considering Fed involvement in Europe is ludicrous. The US economy is in horrible shape precisely because of too much government debt and too much money creation and the European economy is destined to flounder for the same reasons. We have an unsustainable amount of debt here at home; it is hardly fair to US taxpayers to take on Europe's debt as well. That will only ensure an accelerated erosion of the dollar and a lower standard of living for all Americans.


(ViaLewRockwell)

Federal Reserve Leaves Rates Unchanged; Comments on Global 'Strains'

Following a one day meeting of the Federal Reserve Open Market Committee, as expected, the Committee announced that it would leave target interest rates at current levels.

In its statement, it said:

The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook.

The moderate growth forecast continues to suggest that the Fed simply forecasts the trend in front of it and has no clue as to when changes in direction or pace may take place.

As for strains in global markets, meaning the eurozone, that the Fed mentions, this a very strong indication that, if U.S. banks are threatened in any significant way by the eurozone crisis, the Fed will step in immediately to backup the banks.

Since the Fed continues to forecast the immediate future as a continuation of passed trends with dash of hope that things don't get worse, they see little problem with future inflation:

The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

This optimism on inflation is coming, I might add, from a Fed that is pumping money at a near 15% annualized rate.

Is M.I.T. Secretly Running the Fed?

EPJ's Bob English writes:

It's official: Fed led by quartet of MIT grads.

File under curious. I wonder if they all had a similar mentor whose legacy is now driving the Fed.

The Federal Reserve has just announced that Steven B. Kamin will officially become the director of Fed’s chief international economic advisory division.

Kamin became acting director in August following the departure of Nathan Sheets, who led the office after almost four years and became the global head of international economics at Citigroup Inc. Kamin’s appointment is effective Dec. 11, the Fed said in a statement today.

As director of the Division of International Finance, Kamin briefs Fed Chairman Ben S. Bernanke and other officials on economic developments outside the U.S. and represents the Fed at international meetings.

Kamin holds a bachelor's degree from the University of California at Berkeley and received a Ph.D. in economics from the Massachusetts Institute of Technology.

With this appointment, all three of Bernanke’s top staff advisers are M.I.T grads.

William English (no relation to Bob)is the director of the Division of Monetary Affairs, He also received his PhD from MIT,as did David Wilcox director of the Division of Research and Statistics.

Bernanke also received his PhD from M.I.T..

Dear Congress: Bernanke Just Lied to You

On December 6, 2011, Ben Bernanke, Chairman of the Federal Reserve, responded to recent media accusations regarding the Fed's emergency lending during the financial crisis. In attempting to correct "numerous errors and misrepresentations" by the media, Bernanke himself relied on a variety of misleading, if not outright deceptive, tactics and fact-twisting.

EPJ's Bob English has written a devastating open letter expose to Congress detailing the many ways that Bernanke attempted to mislead and deceive them. Don't miss this important expose, here.

The Fed Names Its Junior Banksters for 2012

The Federal Reserve Board just announced the individuals it has designated the chairs and deputy chairs of the 12 Federal Reserve Banks for 2012.

Each Reserve Bank has a nine-member board of directors. The Board of Governors in Washington appoints three of these directors and each year designates one of its appointees as chair and a second as deputy chair.

Bottom line: As much control as possible in the NYC-DC corridor---and those in the hinterland that they can count on not to rock the money printing machines.

Below are the names of the chairs and deputy chairs designated by the Board for 2012:

Boston
Kirk A. Sykes, President, Urban Strategy America Fund, L.P., Boston, Mass., named Chair.

William D. Nordhaus, Sterling Professor of Economics, Yale University, New Haven, Conn., named Deputy Chair.

New York
Lee C. Bollinger, President, Columbia University, New York, N.Y, renamed Chair.

Kathryn S. Wylde, President and Chief Executive Officer, Partnership for New York City, New York, N.Y., renamed Deputy Chair.

Federal Reserve Very Concerned About Double Dip Recession

The Federal Reserve appears to have serious concerns that the economy is heading into a double dip recession. That's the only way to read a report coming from WSJ reporter Jon Hilsenrath.

Couched in the conservative, hedging style of the Federal Reserve, Hilsenrath's column is really a five alarm fire bell. Hilsenrath does not quote anyone by name and merely refers to "Fed officials", but this type of story does not come out without a strong source.

Hilsenrath writes:

Federal Reserve officials are beginning to debate quietly what steps they might take if the recovery surprisingly falters or if the inflation rate falls much more.

Fed officials, who meet next week to survey the state of the economy, believe a durable recovery is on track and their next move—though a ways off—will be to tighten credit, not ease it further. Fed Chairman Ben Bernanke has played down the risk of a double-dip recession and signaled guarded confidence in the recovery.

But fiscal woes in Europe, stock-market declines at home and stubbornly high U.S. unemployment have alerted some officials to risks that the economy could lose momentum and that inflation, already running below the Fed's informal target of 1.5% to 2%, could fall further, raising a risk of price deflation.

The Fed's official posture is unlikely to change when policymakers meet June 22 and 23: The U.S. central bank is expected to leave short-term interest rates near zero and signal no inclination to change that for a long time.

But behind-the-scenes discussions at the meeting could include precautionary talk about what happens if the economy doesn't perform as well as expected.

What is the Fed considering doing if it is clear the economy is headed for a double dip recession? Why, print more money, of course.

Hilsenrath writes:

...he recovery falters, or if inflation slows much further and a threat arises of deflation, a debilitating fall in prices across the economy. In such cases, there would be a few avenues the Fed could take.

One is asset purchases. During the financial crisis, the Fed purchased $1.25 trillion in mortgage-backed securities on top of buying debt issues by Fannie Mae, Freddie Mac and the U.S. Treasury. Mr. Bernanke has said the steps helped to lower long-term interest rates, including rates on mortgages.

The Fed could resume such purchases, although it isn't clear that they would have as powerful an effect as they had in 2008 and 2009, because long-term rates are already low. Rates on 30-year fixed-rate mortgages are about 4.7%, down from 5.2% in early April.

The Fed could also take an intermediate step. Right now, it isn't reinvesting cash it gets when mortgage-backed securities are paid off by borrowers. If the Fed reinvested that cash—projected to be about $200 billion through 2011—in mortgage bonds or Treasurys, it would help keep the financial system awash in money and could hold interest rates down.

These are all money printing means that will ultimately lead to inflation. It is, ultimately, the only tool the Fed has at its disposal and is a very good reason to own gold, even if there is the potential for a short-term dip in the price.

The Fed "Emergency" Meeting

I have received a number of emails regarding an "emergency" meeting to be held by the Fed, that has been reported at other web sites.

The reason behind these reports is the announcement by the Fed of a

 Advance Notice of a Meeting under Expedited Procedures... closed meeting of the Board of Governors of the Federal Reserve System at 11:30 a.m. on Monday, June 7, 2010, will be held under expedited procedures, as set forth in section 26lb.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board's offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting.


Meeting date: June 7, 2010

Matters to be Considered:

1.Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks.

I have reported on these meetings in the past. These "expedited' meetings are in fact regularly scheduled meetings of the Fed, where nothing of consequence generally takes place, and nothing of consequence is expected today.

Any web site giving the impression that anything else is going on is simply wrong.

The Fake Bailout Continues (Federal Reserve division)

The Federal Reserve currency swaps have collapsed.

In the last week, the Fed conducted only $1 billion in swaps (this was with the ECB). The Fed is now also reporting that the initial $9.2 billion swap conducted on 5-19 has matured and was not rolled over.

Bottom line: There is near zero Fed participation in the "bailout" and on Tuesday we will see if the data indicates any strong bailout activity from the ECB, but, at this point, it appears that the central bank bailout operations consist  pretty much of smoke and mirrors press releases.

Evidence Continues to Mount that the ECB and Federal Reserve are Attempting to Crash the Markets

There has been simply no growth in the Federal Reserve U.S. money supply (M2) for months. And as previously announced the European Central Bnak drained E26.5 billion  from the banking system in a one-week liquidity absorbing operation.

Got that? All the money the ECB pumped into the system just over a week ago to stabilise the system, they have drained out.

The ECB has scheduled another liquidity draining operation for next week.

Now, I'm all for stable non-inflationary money, but the head of the Federal Reserve, Ben Bernanke, and the head of the ECB, Jean Trichet, are not. They are Keynesians who believe that you pumped money into the system to "save" the economy during a downturn.

Thus, you have to wonder what is going. The Keynesians that are in control sure don't want this stock market or economy strong.

Bulletin: Fed Conducted No Currency Swaps in the Last Week

The Federal Reserve has annonced that it did not conduct any currency swaps for the week ending 5-19-10.

Outstanding currency swap balances remain at $9.2 billion as the result of a swap conducted with the ECB the prior week.

The Kaleidoscope Has Turned, Again

The business scene and its participants can be looked on as a staging contest of rival orientations, rival ambitions, rival exploitations of the world. It is capable, for all the analyst can tell ex ante facto, of realizing some one or other of these visions in some degree, and thus of presenting an appearance of momentary or temporary orderliness during the ascendancy of one orientation and its sponsors. Or the contest may be inconclusive and sterile, and result in a period of rudderless backing and filling of the sails and of untidy, blind struggle and groping for decisive policy.It will be a kaleidic society,interspersing its moments or intervals of order assurance and beauty with sudden disintegration and a cascade into a new pattern. Such an account of the politico-economic process may at various epochs or in the course of various historical ages appear less or more suggestive and illuminating. It invites the analyst to consider the society as consisting of a skein of potentiae, and to ask himself, not what will be its course,but what that course is capable of being in case of the ascendancy of this or that ambition entertained by this or that interest. The rival orientations, in the pure form of each, if it were conceivable that one or the other would be perfectly realized, would define the boundary of the possible situations, or transforms of situations, through which the society might pass in the course of a few year or a few decades. The partial or mixed success of several would lead to interior paths within this boundary, or to the temporary loss of a sense of direction. Such a loss of direction, in the economic aspect of affairs, might consist in a catastrophic slump or an uncontrollable inflation and the destruction of the currency and the society's confidence.

-G.L.S Shackle
Epistemics & Economics: A critique of economic doctrines (1991) P76

The above words written by G. L. S. Shackle, I believe, are among the most beautiful and insightful words ever written by an economist.

With these words, Shackle describes the nature of economics, of what we can and can't know about the economy, and at the same time recognizes the deceptive orderliness that we sometimes see in the market, that can quickly change.

Placing this template over the current financial crisis, we can see that few have understood what has occurred to date, and more important, few understand what the future may hold.

The current crisis  started in a curious way. The real estate market was being fueled by a huge money printing operation, years long, that convinced most that real estate could only go up in price.  This is what Shackle would consider the orderliness. There were a few, myself included, that knew this bubble would not last. But, it would be impossible to predict in advance just how and when the kaleidoscope would turn. In fact, what happened is that  it was turned twice.

The start of the financial crisis can now be pegged to the February 27, 2007 announcement that The Federal Home Loan Mortgage Corporation (Freddie Mac) would no longer buy the most risky subprime mortgages and mortgage-related securities. Prior to that announcement the real estate market was in a roaring full-fledged bull market.

One key to a roaring bull market is that more and more money needs to be added to the ballooning structure to keep it climbing. If the flow of money simply slows down, then the most leveraged who are betting on a quick return will find difficulty making that quick return. In the stock market, those seeking quick returns are exemplified by day traders, in the real estate market it is the equivalent "flippers".

The Freddie Mac announcement slowed the flow of the most risky, most aggressive money that was blowing up the real estate bubble. It was enough to prick the bubble.

To this day, few are aware of this as the start of the real estate crisis. It was a turn of the kaleidoscope that changed the dynamics of the subprime market.

The crisis would have temporarily stopped there except for another turn of the kaleidoscope. In the summer of 2008, the Fed chairman, Ben Bernanke, stopped printing money. This collapsed the remainder of the real estate market and the rest of the economy.

In the fall of 2008, we had a knee jerk reaction from the Federal Reserve to the escalating crisis, when the Reserve mutual fund "broke a buck". This resulted in the Fed adding mounds of new money to the system. The money printing did not stop until the early spring of 2009. This fueled the stock market boom which has always been in long term danger because the Fed had stopped its aggressive money printing ways in the spring of 2009 and has not yet resumed them.

This lack of money printing suggested a strong dollar and lower gold. The strong dollar appeared and the gold ascent stopped. The lack of money printing by the Fed, along with the same lack of printing by the European Central Bank, also produced another problem for the global economy, a double dip in the crisis in the form of sovereign debt problems by countries that needed monetary inflation to devalue the true cost of their debt. Without this inflation they had started a slow decent into default.

With the defaults becoming obvious, the kaleidoscope has been turned once more with news of bailout money from other EU members for the PIIGS, and the ECB pronouncing that it will enter the European bond markets to support debt prices. The Federal Reserve has also appeared on the scene with swap money.

And this is where we stand today. Rumors swirl that Germany may abandon the Euro for a new Dmark. Greeks appear ready to riot more to break the Greek government's attempt to install an austerity program. And in the U.S., various states and cities are emerging with budget strains, and the first murmurs of "Federal bailout" are being heard for some of the 50 states.

News of the money printing by the Fed (via swaps) and by the ECB (via debt support programs) is most alarming. If this money printing is not sterilized by offsetting money drains in other sectors of the economy, then serious inflation may be around the corner. The climb in the gold price is an indication that many have placed the quite solid bet that the central bank money printing will not be sterilized. The inflation scenario appears to be the most likely at this time.


However, and here is where the kaleidoscope may turn again, a strong inflation will boost the coffers of governments as their tax structures are very much tied to inflation. At such time, the Fed may again tighten for fear of a great inflation. This would reverse trends in the stock market and gold once again, pushing them downward. It is an extremely tricky and delicate time period with minor moves that could ripple through out the economy. We must keep in mind what Shackle has written. This time period, for sure,:

... invites the analyst to consider the society as consisting of a skein of potentiae, and to ask himself, not what will be its course,but what that course is capable of being in case of the ascendancy of this or that ambition entertained by this or that interest.

Indeed, with central banks, riots, banksters, politicians and the public all mixed in this brew, one move this way or that could push the economy over the edge, in this direction or that. As Shackle writes:

The partial or mixed success of several would lead to interior paths within this boundary, or to the temporary loss of a sense of direction. Such a loss of direction, in the economic aspect of affairs, might consist in a catastrophic slump or an uncontrollable inflation and the destruction of the currency and the society's confidence.

A crisis is coming, the details of how it will unravel will be provided only to the alert and nimble minded. The most likely scenario is a strong inflation with gold as king, but this is just the most likely scenario. This is not the time, though, to fall into a belief in a pseudo-orderliness of any kind, even for gold. In a free market gold would most likely emerge as the means of exchange. Gold is a great inflation hedge and everyone should own some, but there are scenarios in the current environment under which it would not perform well. Should the Germans turn the kaleidoscope by abandoning the euro and re-launching a new Dmark. The Dmark would at once become one of the strongest currencies in the world. In Europe, it would likely cause a flight by non-Germans in Europe to the Dmark, and thus in a way not only a flight from the euro but a European flight from gold.

The only thing we know with certainty is what Shackle has taught us:

It will be a kaleidic society, interspersing its moments or intervals of order assurance and beauty with sudden disintegration and a cascade into a new pattern.

Stay alert. It is going to be very tricky out there, kaleidoscopic, if you will.

The Federal Reserve Describes Currency Swaps

Now that the Federal Reserve has decided to take part in the PIIGS bailout via currency swaps, it will be valuable to understand just how currency swaps work.

The Fed also used currency swaps in the first part of the current crisis and the Federal Reserve economists Michael J. Fleming and Nicholas J. Klagge have written a primer on the swaps and how they functioned.

That primer is now in the EPJ Vault, here.