Monthly Archives: September 2011

Come on Baby, Let’s Do the Twist!

After yesterday’s press release by the Fed, many commentators started talking about “Operation Twist” even though no such thing is mentioned in the release. Accompanying the press release on the Federal Reserve site, was, however, a document containing the term in parenthesis. Some could immediately be confused or even scared by this. Would this be yet an addition to the endless series of acronyms that has emerged during the financial crisis? Troubled and Worthless Interest-bearing Securities Task-force? Luckily not. It just reflects a return to the old days. And “twist” actually means what it says: “twist.”  In 1961, the Kennedy administration and the Fed engaged in an operation of selling … Continue reading

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ECB too Strong for Stark

Officially, member of the ECB’s executive board Jürgen Stark has decided to quit his position prematurely for “personal reasons” (mentioned twice in the brief press release). This can, of course, cover a lot, but does not exclude what is on most people’s mind: He is quitting because he is in opposition to ECB’s actions on the European bond market. Like his fellow contryman, German Axel Weber, he has obviously not been pleased by the ECB’s slow but steadily increasing involvement in fiscal affairs. It is well known that decisions to purchase sovereign debt in the secondary market (which just about makes it constitutionally legal), have not been unanimous, and although … Continue reading

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