Under scrutiny, New York Fed sets short list for Dudley successor
“Community and labor activists led by the Fed Up coalition demonstrate and call for the selection of a Federal Reserve Bank of New York president independent from Wall Street, outside the Fed bank...
“Community and labor activists led by the Fed Up coalition demonstrate and call for the selection of a Federal Reserve Bank of New York president independent from Wall Street, outside the Fed bank in New York, March 12, 2018.”
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Fed Officials Say a September Rate Increase Is Still on the Table
The comments, uncoordinated but generally consistent, suggested that some investors and analysts had been too quick to discount a September rate increase, particularly as global markets finished...
The comments, uncoordinated but generally consistent, suggested that some investors and analysts had been too quick to discount a September rate increase, particularly as global markets finished the week on a relatively quiet note on Friday.
“We haven’t made a decision yet, and I don’t think we should,” Stanley Fischer, the Fed’s vice chairman and a close adviser to the Fed chairwoman, Janet L. Yellen, said in an interview with the cable network CNBC. “We’ve got time to wait and see the incoming data and see what exactly is going on now in the economy.”
The Fed’s policy-making committee is scheduled to meet Sept. 16 and 17.
Mr. Fischer offered an upbeat assessment of the domestic economy. He described job growth as “impressive” and said there had been a “pretty strong case” to raise rates in September before the latest round of global turmoil. He did not sound inclined to wait much longer than September to start raising rates.
“We’re getting back to normal and at some point we will want to show that, by beginning to normalize interest rates,” he said, speaking during a break at the annual conference hosted here by the Federal Reserve Bank of Kansas City.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta and a centrist on the Federal Open Market Committee, told Bloomberg that he saw roughly even odds of a September rate increase. But if the Fed did choose to wait, he said it wouldn’t be for long — he suggested that it could raise rates at its next meeting in October.
James Bullard, president of the Federal Reserve Bank of St. Louis, said in an interview that he was reserving final judgment, but that he did not see strong reasons for the Fed to delay. “I would like to see the whole panoply of data before I make a decision but I’m certainly leaning in that direction,” Mr. Bullard said.
The march toward higher rates has inflamed some critics who argue that the central bank should continue or even expand its stimulus campaign.
Joseph Stiglitz, a Columbia University economist and Nobel laureate, said Thursday that the Fed was on the verge of repeating an old mistake by raising interest rates sooner than necessary to control inflation. He pointed out that the share of Americans with jobs remained unusually small and wages were rising only slowly.
“There hasn’t been a recovery for the majority of Americans and so to me this is a no-brainer,” Mr. Stiglitz told a coalition of community groups who call themselves “Fed Up” that met just outside the main conference to advocate against a rate increase. “I don’t even know why we’re talking about” tightening monetary policy, he said.
The Fed’s preferred measure of inflation was updated on Friday. The new data showed that prices rose just 0.3 percent during the 12 months that ended in July. A narrower measure excluding food and oil prices, which the Fed regards as more predictive, increased by 1.2 percent over that period. The Fed aims to maintain inflation at a 2 percent annual pace, a goal it has not achieved for several years.
Mr. Stiglitz said the Fed should try to keep inflation at about 4 percent a year. Even with a stated target of 2 percent a year, he said, actual inflation is significantly lower. “We wind up with a monetary policy that has been consistently too tight,” he said.
Most Fed officials say they expect inflation to increase as the economy expands. Mr. Fischer said on Friday that his confidence was “pretty high” that inflation would rebound.
Still, Mr. Fischer said there was a continuing “discussion” among Fed officials, some of whom see the strength of domestic growth as a reason to raise rates, while others argue the sluggishness of inflation means there is no reason to rush.
Mr. Bullard, a member of the first camp, said that he viewed recent global economic developments as unlikely to change his economic forecast. The sharp fall of oil prices and the decline of long-term interest rates should increase growth, while a stronger dollar and a weaker global economy are likely to have an offsetting impact.
“I want to take the time I have between now and the September meeting to evaluate all the economic information that’s come in, including recent volatility in markets and the reasons behind that,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, told The Wall Street Journal. “But it hasn’t so far changed my basic outlook that the U.S. economy is solid and it could support an increase in interest rates.”
Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, reiterated his contrasting view that the Fed should not raise interest rates this year. Instead, he argued, the central bank should consider expanding its stimulus campaign to address the persistence of low inflation, which can harm consumer spending and business plans for expansion. Mr. Kocherlakota said the volatility of financial markets should be seen as further evidence of the weakness of the economy.
Both camps, however, agree that the Fed should not start raising rates in the middle of market volatility. William C. Dudley, the president of the Federal Reserve Bank of New York, said this week that the gyrations of financial markets made the case for raising rates in September “less compelling.”
Mr. Fischer in his interview Friday said he did not want to judge the current situation, because it was new. But if volatility persisted, the Fed would be less likely to move.
“If you don’t understand the market volatility, and I’m sure we don’t fully understand it now — there are many, many analyses of what’s going on — then yes, it does affect the timing of a decision you might want to make,” he said.
Both Mr. Dudley and Mr. Fischer, however, noted that the current situation might be fleeting. Mr. Fischer said markets “could settle down fairly quickly.”
And Mr. Fischer emphasized that Fed officials could not afford to wait until all of their questions were answered and all of their doubts resolved. “When the case is overwhelming,” he said, “if you wait that long, then you’ve waited too long.”
Source: New York Times
What Does Jeff Flake's Vote Mean? Brett Kavanaugh Is Still in the Running, For Now
What Does Jeff Flake's Vote Mean? Brett Kavanaugh Is Still in the Running, For Now
If you were tuned into the Judiciary Committee hearing on Friday afternoon, you may have witnessed a confusing moment: Hours after Senator Jeff Flake, an Arizona Republican, announced in a...
If you were tuned into the Judiciary Committee hearing on Friday afternoon, you may have witnessed a confusing moment: Hours after Senator Jeff Flake, an Arizona Republican, announced in a statement that he would vote to confirm Supreme Court nominee Brett Kavanaugh, he showed up late to the vote and then asked for a delay on the Senate floor vote, pending an FBI investigation. A quick vote along the roll call occurred...and then the hearing was abruptly adjourned.
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Safety coalition: ‘Scaffold Law’ study is ‘flawed’
Safety & Health Magazine - April 18, 2014 - A recent study that questioned the usefulness of New York state’s “Scaffold Law” is flawed, according to a new report from a worker safety advocacy...
Safety & Health Magazine - April 18, 2014 - A recent study that questioned the usefulness of New York state’s “Scaffold Law” is flawed, according to a new report from a worker safety advocacy coalition.
In December, a study from State University of New York’s Rockefeller Institute of Government concluded that New York’s Labor Law 240 – which imposes a strict liability on employers for workplace injuries at height – drives up the cost of business without improving worker safety.
But an April 17 report from the Center for Popular Democracy and the New York Committee for Occupational Safety and Health called the Rockefeller study “biased,” noting that the study was paid for by the New York Civil Justice Institute, a group created by an alliance criticized as working on behalf of employer and industry interests.
The Rockefeller study confused correlation with causation, the two worker safety advocacy groups say, by claiming differences between worker injury rates in construction and non-construction industries in New York and elsewhere are entirely due to the Scaffold Law.
CPD and NYCOSH are partners in a newly launched Scaffold Safety Coalition, a group of workers, advocates and other organizations that have joined to defend the state’s Scaffold Law.
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Janet Yellen’s Future at the Fed Unresolved Heading Into Jackson Hole
Janet Yellen’s Future at the Fed Unresolved Heading Into Jackson Hole
The prospect of a second term for Federal Reserve Chairwoman Janet Yellen won't be on the agenda at the central bank's annual retreat this week at Grand Teton National Park, but the question of...
The prospect of a second term for Federal Reserve Chairwoman Janet Yellen won't be on the agenda at the central bank's annual retreat this week at Grand Teton National Park, but the question of whether she could be asked to stay on -- and whether she would accept -- will be hanging over the confab.
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Fed policymakers see rate hikes, blurring dove-hawk divide
Whitehurst’s group of activists, Fed Up, has printed pamphlets to distribute at the conference venue that say George, along with other traditionally hawkish policymakers, “wants more people to be...
Whitehurst’s group of activists, Fed Up, has printed pamphlets to distribute at the conference venue that say George, along with other traditionally hawkish policymakers, “wants more people to be unemployed.”
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The Left's Fed Up Makes A Naked Power Grab For Control Of The Fed
The left is undertaking an amazing back door plan to dramatically increase its influence over the Fed’s interest-rate-setting Open Market Committee.
The key activist group, a division of...
The left is undertaking an amazing back door plan to dramatically increase its influence over the Fed’s interest-rate-setting Open Market Committee.
The key activist group, a division of the Center for Popular Democracy, is working to kick the bankers off the boards of directors of the district Federal Reserve banks. Those boards choose the presidents who serve, in rotation, as voting members on the FOMC. Brilliant.
In scope, the left’s plan makes trivial by comparison Auric Goldfinger’s “Operation Grand Slam” to contaminate America’s gold holdings at the US Treasury Depository at Fort Knox. Goldfinger planned to turn them radioactive. Those holdings amounted, in 1964, to about $14 billion. They are now valued at close to $200 billion.
Either way, a tidy sum. Yet it’s just a nickel compared to the Fed’s more than $4 trillion holdings.
Most impressive. The left is undertaking its own Operation Super Grand Slam.
It is doing so proficiently and systematically. Unfortunately for the left, fortunately for America, it has run into a real life James Bond: House Monetary Policy Subcommittee Chairman Bill Huizenga (R-MI). The irresistible force has met its immovable object.
Fed Up, the left’s instrumentality, was repelled during the most recent skirmish. This occurred last week at a hearing of a subcommittee of the House Financial Services Committee, “Federal Reserve Districts: Governance, Monetary Policy, and Economic Performance.”
Fed Up is a project of the Center for Popular Democracy, which, according to Wikipedia (citing a paywalled article by John Judis from the National Journal) is the successor, at least in part, to the somewhat notorious ACORN. According to the Center’s website:
The Federal Reserve has tremendous influence over our economy. Although our communities continue to suffer through a weak recovery and economic inequality keeps growing, corporate and financial interests are demanding that the Fed put the brakes on growth so wages don’t rise. There is a real danger that in early 2015 (sic), the Fed will cut the legs out from the recovery before the economy reaches full acceleration, costing our communities millions of jobs and workers tens of billions in wages.
True, and fair, enough. Let it be said that I, along with much of the right, also am highly critical of the Fed. I, a dues paying member of the AFL-CIO, am of the wing of the right wing that is in full solidarity with Fed Up’s commitment to wage growth.
We share identification of the Fed as a main perp in the failure of workers to thrive. From the right check out, for example, Put Growth First. Its website is headlined “End the Fed’s War on Wage Growth: Restore Prosperity for the Striving Majority.”
I, while opposing tokenism, am in sympathy with Fed Up’s stand that the Federal Reserve is unacceptably deficient in social, gender, and ethnic diversity. I have great admiration for Fed Up’s tactical proficiency, clarity of message, and decency in presenting that message. I, too, am fed up with the Fed.
That said, I am on record as dubious about the Fed’s power to “set” interest rates outside the trivial, and mostly symbolic, impact of setting the discount rate. I also am not part of the “raise interest rates” cheerleader squad on the right. I’m for allowing the credit markets to organically set interest rates based on … wait for it … supply and demand.
I part company with the left on its proposed solution of taking over district Federal Reserve Bank governance. Hola, Venezuela! Upon encountering Fed Up’s representatives while we were waiting to enter the Congressional hearing I requested the opportunity to engage in further conversation. Waiting, eagerly, to hear back.
Fed Up is a class act. Making the voices of the have-nots heard is commendable. Bring it on.
By Ralph Benko
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Report: Women unduly harmed by unpredictable scheduling
Al Jazeera - 05-12-2015 - Irregular hours and just-in-time scheduling are pervasive throughout the low-wage economy, but they do...
Al Jazeera - 05-12-2015 - Irregular hours and just-in-time scheduling are pervasive throughout the low-wage economy, but they do particular harm to working women, according to an analysis released Tuesday by the Center for Popular Democracy.
Women still disproportionately shoulder responsibility for child care and other family obligations, and more than 6 million women have cited those constraints as the primary reasons they are not employed full time, according to the report.
The Center for Popular Democracy argues that juggling family responsibilities with the unsteady work hours that often come with part-time employment leads to additional challenges for women.
“Women working more hours are likely to experience the stressful effects of overwork and may often have no choice but to work overtime hours or lose their job,” the report says. “However, the over 12 million women working part time in hourly jobs are at greatest risk of both highly erratic schedules and of extreme income fluctuation."
Women were found to be slightly more likely to work jobs paid on an hourly basis: 61 percent compared with 56 percent of men. As a result, their income is more likely to fluctuate based on how many hours they are assigned to work per week or month. Additionally, their off time can be difficult to control or predict because of last-minute scheduling.
Erratic hours can be particularly hard on women, who tend to spend more time than men performing household chores and caring for children. A 2014 Bureau of Labor Statistics survey found women in households with children under the age of 6 spent roughly an hour a day attending to their physical needs, whereas men spent roughly half an hour.
On a conference call with reporters to discuss the report, Albuquerque, New Mexico, activist Kris Buchmann said she has been “treated like my life outside of work didn’t matter” while working hourly jobs in retail.
“I can’t tell you how many times I was asked to close and then turn around and come back in after five or six hours off,” she said. “It’s not enough for a full night’s sleep or showering or anything else I have to do."
Other times, “they would call me into work, I would show up, and they would say, ‘Oh, never mind. We don’t need you,’” she said. Such unpredictability made it difficult for her to know when she would need to find child care for her son.
University of Massachusetts at Amherst sociologist Naomi Gerstel, who wrote the book “Unequal Time: Gender, Class and Family in Employment Schedules” with Dan Clawson, said erratic scheduling exists “across the entire class spectrum” but falls especially hard on low-wage workers.
If you’re in a stable, full-time position, “you’re more likely to be able to say no or find substitutes” such as baby sitters and other care workers, she said. Additionally, some higher-paying workplaces are “changing occupations to make it possible for especially women workers to take on what’s defined as flexibility."
But perks such as maternity leave have not filtered down the income ladder. And long-term changes in family structure have created a “double-edged sword” for some workers, said Gerstel. Births to unmarried women have risen steadily since the 1940s, according the U.S. Census Bureau, so more single mothers have been forced to negotiate child care on top of their work schedules.
That’s beginning to change in some parts of the country. Carrie Gleason, the Center for Popular Democracy’s Fair Workweek Initiative director, told reporters on a conference call that 11 states “have introduced some form of work hours legislation, and this is an issue that was basically not on the map last year.”
Buchmann is part of a campaign to get predictable scheduling legislation passed in New Mexico. In November, San Francisco’s Board of Supervisors approved a legislative package known as the Retail Worker Bill of Rights, which is, in part, intended to enforce more predictable scheduling for retail workers.
Source: Al Jazeera
A City Invokes Seizure Laws to Save Homes
The power of eminent domain has traditionally worked against homeowners, who can be forced to sell their property to make way for a new highway or shopping mall. But now the working-class city of...
The power of eminent domain has traditionally worked against homeowners, who can be forced to sell their property to make way for a new highway or shopping mall. But now the working-class city of Richmond, Calif., hopes to use the same legal tool to help people stay right where they are.
Scarcely touched by the nation’s housing recovery and tired of waiting for federal help, Richmond is about to become the first city in the nation to try eminent domain as a way to stop foreclosures.
The results will be closely watched by both Wall Street banks, which have vigorously opposed the use of eminent domain to buy mortgages and reduce homeowner debt, and a host of cities across the country that are considering emulating Richmond.
The banks have warned that such a move will bring down a hail of lawsuits and all but halt mortgage lending in any city with the temerity to try it.
But local officials, frustrated at the lack of large-scale relief from the Obama administration, relatively free of the influence that Wall Street wields in Washington, and faced with fraying neighborhoods and a depleted middle class, are beginning to shrug off those threats.
“We’re not willing to back down on this,” said Gayle McLaughlin, the former schoolteacher who is serving her second term as Richmond’s mayor. “They can put forward as much pressure as they would like but I’m very committed to this program and I’m very committed to the well-being of our neighborhoods.”
Despite rising home prices in many parts of the country, including California, roughly half of all homeowners with mortgages in Richmond are underwater, meaning they owe more — in some cases three or four times as much more — than their home is currently worth. On Monday, the city sent a round of letters to the owners and servicers of the loans, offering to buy 626 underwater loans. In some cases, the homeowner is already behind on the payments. Others are considered to be at risk of default, mainly because home values have fallen so much that the homeowner has little incentive to keep paying.
Many cities, particularly those where minority residents were steered into predatory loans, face a situation similar to that in Richmond, which is largely black and Hispanic. About two dozen other local and state governments, including Newark, Seattle and a handful of cities in California, are looking at the eminent domain strategy, according to a count by Robert Hockett, a Cornell University law professor and one of the plan’s chief proponents. Irvington, N.J., passed a resolution supporting its use in July. North Las Vegas will consider an eminent domain proposal in August, and El Monte, Calif., is poised to act after hearing out the opposition this week.
But the cities face an uphill battle. Some have already backed off, and those that proceed will be challenged in court. After San Bernardino County dropped the idea earlier this year, a network of housing groups and unions began working to win community support and develop nonprofit alternatives to Mortgage Resolution Partners, the firm that is managing the Richmond program.
“Our local electeds can’t do this alone, they need the backup support from their constituents,” said Amy Schur, a campaign director for the national Home Defenders League. “That’s what’s been the game changer in this effort.”
Richmond is offering to buy both current and delinquent loans. To defend against the charge that irresponsible homeowners who used their homes as A.T.M.’s are being helped at the expense of investors, the first pool of 626 loans does not include any homes with large second mortgages, said Steven M. Gluckstern, the chairman of Mortgage Resolution Partners.
The city is offering to buy the loans at what it considers the fair market value. In a hypothetical example, a home mortgaged for $400,000 is now worth $200,000. The city plans to buy the loan for $160,000, or about 80 percent of the value of the home, a discount that factors in the risk of default.
Then, the city would write down the debt to $190,000 and allow the homeowner to refinance at the new amount, probably through a government program. The $30,000 difference goes to the city, the investors who put up the money to buy the loan, closing costs and M.R.P. The homeowner would go from owing twice what the home is worth to having $10,000 in equity.
All of the loans in question are tied up in what are called private label securities, meaning they were bundled and sold to private investors. Such loans are generally the most unfavorable to borrowers and the most likely to default, Mr. Gluckstern said. But they are also the most difficult to modify because they are controlled by loan servicers and trustees for the investors, not the investors themselves. If Richmond’s purchase offer is declined, the city intends to use eminent domain to condemn and buy the loans.
The banks and the real estate industry have argued that such a move would be unprecedented and unconstitutional. But Mr. Hockett says that all types of property, not just land and buildings, are subject to eminent domain if the government can show it is needed to promote the public good, in this case fighting blight and keeping communities intact. Railroad stocks, private bus companies, sports teams and even some mortgages have been subject to eminent domain.
Opponents, including the Securities Industry and Financial Markets Association, the American Bankers Association, the National Association of Realtors and some big investors have mounted a concerted opposition campaign on multiple levels, including flying lobbyists to California city halls and pressuring Fannie Mae, Freddie Mac and the Federal Housing Administration to use their control of the mortgage industry to ban the practice.
Tim Cameron, the head of Sifma’s Asset Management Group, said any city using eminent domain would make borrowing more expensive for everyone in the community and divert profits from the investors who now own the loan to M.R.P. and the investors financing the new program. “Eminent domain is used for roads and schools and bridges that benefit an entire community, not something that cherry-picks who the winners are and who the losers are,” he said.
Representative John Campbell, Republican of California, has introduced a bill that would prohibit Fannie, Freddie and the F.H.A. from making, guaranteeing or insuring a mortgage in any community that has used eminent domain in this way. Eminent domain supporters say such limits would constitute a throwback to the illegal practice called redlining, when banks refused to lend in minority communities.
Opponents have also employed hardball tactics. In North Las Vegas, a mass mailer paid for by real estate brokers warned that M.R.P. had “hatched a plan to make millions of dollars by foreclosing on homeowners who are current on their payments.”
In a letter to the Justice Department, Lt. Gov. Gavin Newsom of California complained that the opposition was violating antitrust laws and that one unnamed hedge fund had threatened an investor in the project.
But not all mortgage investors oppose the plan. Some have long argued that writing down homeowner debt makes sense in many cases. “This is not the first choice, but it’s rapidly becoming the only choice on how to fix this mess,” said William Frey, an investor advocate.
Mr. Frey said that the big banks were terrified that if eminent domain strategies became widespread, they would engulf not only primary mortgages but some $450 billion in second liens and home equity loans that are on the banks’ balance sheets. “It has nothing to do with morality or anything like that, it has to do with second liens.”
Many of the communities considering eminent domain were targeted by lenders who steered minority families eligible for conventional mortgages into loans with higher interest rates and ballooning payments. Robert and Patricia Castillo bought a three-bedroom, one-bathroom home in Richmond because their son, who is severely autistic, would anger landlords with his destructive impulses. They paid $420,000 for a home that is now worth $125,000, Mr. Castillo, a mechanic, said.
They have watched as their daughter’s playmates on the block have, one by one, lost their homes. But they are reluctant to walk away from the house in part for the sake of their son.
“We’re in a bad situation,” Mr. Castillo, 44, said. “Not only me and my family, but the whole of Richmond.”
Source:
Martin Luther King Jr. had an economic dream - and it changed the Federal Reserve forever
Martin Luther King Jr. had an economic dream - and it changed the Federal Reserve forever
Most Americans have watched or heard Martin Luther King's famous "I Have a Dream" speech , delivered before the Lincoln Memorial in Washington in 1963. Few know his rousing call for racial...
Most Americans have watched or heard Martin Luther King's famous "I Have a Dream" speech , delivered before the Lincoln Memorial in Washington in 1963. Few know his rousing call for racial equality was the culmination of an event called the March for Jobs and Freedom.
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2 days ago
2 days ago