tingilinde: General Commentary

We've been hearing a lot about the yield curve and what it might foretell - but what about yield curve control? A discussion from the Brookings Institute.

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In normal times, the Fed steers the economy by raising or lowering very short-term interest rates, such as the rate that banks earn on their overnight deposits. Under yield curve control (YCC), the Fed would target some longer-term rate and stand ready to buy long-term bonds to keep the rate from rising above its target. This would be one way for the Fed to stimulate the economy if bringing short-term rates to zero isn’t enough. Current Fed Governors Richard Clarida and Lael Brainard have both said the Fed ought to consider adopting YCC, as have former Fed chairs Ben Bernanke and Janet Yellen.

Yield curve control is different in one major respect from QE, the trillions of dollars in bond-buying that the Fed pursued during the Great Recession. QE deals in quantities of bonds; YCC focuses on prices of bonds. Under QE, a central bank might announce that it plans to purchase, for instance, $1 trillion in Treasury securities. Because bond prices are inversely related to their yields, buying bonds and pushing up their price leads to lower longer-term rates.

Under YCC, the central bank commits to buy whatever amount of bonds the market wants to supply at its target price. Once bond markets internalize the central bank’s commitment, the target price becomes the market price—who would be willing to sell the bond to a private investor for less than they could get by selling to the Fed?

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a tip of the hat to Sukie

08:34 in Current Affairs, General Commentary | Permalink | Comments (0)

August 22, 2019

has childhood been ruined?

One person's take. I've certainly seen counter examples and can't judge how common this is, but worry that kids don't have enough free unsupervised time.

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No longer able to rely on communal structures for child care or allow children time alone, parents who need to work are forced to warehouse their youngsters for long stretches of time. School days are longer and more regimented. Kindergarten, which used to be focused on play, is now an academic training ground for the first grade. Young children are assigned homework even though numerous studies have found it harmful. STEM, standardized testing and active-shooter drills have largely replaced recess, leisurely lunches, art and music.

The role of school stress in mental distress is backed up by data on the timing of child suicide. “The suicide rate for children is twice what it is for children during months when school is in session than when it’s not in session,” according to Dr. Gray. “That’s true for suicide completion, suicide attempts and suicidal ideation, whereas for adults, it’s higher in the summer.” But the problems with kids’ mental and emotional health are not only caused by what goes on in the classroom. They also reflect what’s happening in our communities. The scarcity of resources of every kind, including but not limited to access to mental health services, health care, affordable housing and higher education, means that many parents are working longer and harder than ever. At the same time that more is demanded of parents, childhood free time and self-directed activities have become taboo.

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05:55 in education, General Commentary | Permalink | Comments (0)

August 21, 2019

ethan zuckerman's reaction to the epstein taint on mit's media lab

His comments are worth reading. I doubt those who made deals with Epstein realizing what was going on as they took money and favors as he tried to rebuild his reputation will do much if anything. Some will probably try to play the victim card and the real victims - the women - will be ignored.

04:59 in Current Affairs, General Commentary | Permalink | Comments (0)