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A theory of Fed announcements
If you've been paying attention, the Fed likes to release bad news after the markets close on Friday afternoon. The past couple weeks, they've announced the failures of small regional banks.
Well today [referring to a Friday], they announced something just a little bit bigger - the government bailout/takeover of Fannie Mae and Freddie Mac, the two large mortgage finance guarantors. The markets have been expecting this for a while, but obviously not everyone was expecting it as their stock prices were $5.50 and $4 respectively when the market closed today. If everyone was expecting this, then those prices would have been a lot closer to zero.
Here is more.
Posted by Tyler Cowen on July 3, 2009 at 06:13 PM in Political Science | Permalink
Comments
Uh, fall 2008 called, it wants its news story back? Did this post get stuck in a time warp?
Posted by: anonymous at Jul 3, 2009 6:26:24 PM
When in doubt, opt for the esoteric reading. I have a theory as to who isn't running for President in 2012.
Posted by: Tyler Cowen at Jul 3, 2009 6:32:37 PM
nice effort. old news. did you hear kennedy was shot?
Posted by: mr yesterday at Jul 3, 2009 6:37:27 PM
The meaning of this post is too subtle for me.
Posted by: Craig at Jul 3, 2009 6:45:10 PM
I'm not convinced. The resignation itself is news that she probably wants to downplay even if she is running--quitting isn't usually a qualification for the next spot. But if she does want to run, she has to quit, largely because Alaska is simply too far from New Hampshire for her to do both.
Posted by: Thomas at Jul 3, 2009 7:00:15 PM
Nothing to see here.
In DC every news-savvy individual and organization knows that you release bad news on Friday afternoons.
Posted by: anon at Jul 3, 2009 7:03:15 PM
Is Tyler saying Sarah Palin runs the Federal Reserve? Is she a Mason?
Posted by: Bob Murphy at Jul 3, 2009 7:40:30 PM
Well then why did Donald Rumsfeld announce the pentagon couldn't account for 2.3 trillion dollars on a Monday in 2001? O, yes thats right, it was 9/10/2001, another good date to release bad news.
Posted by: Monday at Jul 3, 2009 8:17:06 PM
Well then why did Donald Rumsfeld announce the pentagon couldn't account for 2.3 trillion dollars on a Monday in 2001?
Because he was trying to blame it on the Clinton Administration?
Posted by: anon at Jul 3, 2009 8:51:35 PM
"Well then why did Donald Rumsfeld announce the pentagon couldn't account for 2.3 trillion dollars on a Monday in 2001?"
This such a tired 911 Truther kind of thing. Lacking the manpower and accounting systems to break down documentation on a massive tangle of expenditures over a very long period of time into granular start-to-finish views of the data is not the same as being unable to "account" for the money. (Which is a weasel word for people who push this theory, and which they intend to read as "The Pentagon lost or stole $2.3 trillion!")
Posted by: PM at Jul 3, 2009 8:57:40 PM
I didn't say that he stole the money, I said he released bad news on a Monday. Will anyone disagree that it is in fact bad news? Why Monday instead of Friday?
You can fire Ad hominem attacks at me all day, the fact remains that 911 was an inside job, this is just one of the many pieces of evidence.
Posted by: Monday at Jul 3, 2009 9:02:38 PM
Better watch out monday! The reptoid freemason neocon jews will getcha!
Posted by: Bigfoot the UFOlogist at Jul 3, 2009 11:29:17 PM
Tyler is, I believe, trying to illustrate how (1) the Fed remains opaque under Bernanke, and (2) how extraordinary events are perceived at the time.
With regard to (1), recall that after the recent FOMC text was published, the Fed gave the real news a day letter on their website, namely a reduction of TAF, TSLF and PDCF. This was far more material than the extention of ZIRP, which was the substance of the FOMC statement.
As for (2) - I recall being at a barbecue that Sunday, and expressing with awe that Fannie and Freddie had been taken under conservatorship. Nobody else seemed too rattled. The following week when Lehman, AIG and Merrill went down, with prime brokerage clients worried about Goldman and Morgan Stanley, I think people finally understood.
Now think about the rumors, yesterday, of a bank holding company borrowing at 700 bp in the interbank market.
Posted by: Sunset Shazz at Jul 4, 2009 12:44:37 AM
"You can fire Ad hominem attacks at me all day, the fact remains that 911 was an inside job, this is just one of the many pieces of evidence."
Begging the question, perfectly. This should be in a textbook.
Posted by: Vernunft at Jul 4, 2009 1:24:16 AM
Drunk blogging again Prof. Cowen?
In all seriousness, this is either completely over everyone's head or a date error.
Posted by: passivelyrevolting at Jul 4, 2009 2:18:07 AM
woops, didn't notice the comment
maybe she's trying to take the time off to get briefed for her run like the current president effectively did by spending less time at the senate--her explanations are pretty poor if that's the case
i wonder what she'll do now though. she's got star power. if she wants she could probably get an oprah esque gig or a fox cable news show
i wouldn't be surprised if she didn't run though--for whatever reason
Posted by: passivelyrevolting at Jul 4, 2009 2:26:59 AM
@Monday
Actually most of the evidence points to the jewsmcbushhitler planting the current 9/11 truthers in order to marginalize them because of their insipid natures. That way they could deflect more effectively from the fact that they have been responsible for all conflict between man for the past 4000 years!
Posted by: passivelyrevolting at Jul 4, 2009 2:29:30 AM
Wow, I was wondering when MR would throw out the red meat. I had no clue they had. "Fannie Mae" should have tipped it off. Obviously it's about the recent Friday announcement to all patriotic US Americans.
Posted by: Andrew at Jul 4, 2009 7:07:31 AM
Bob, maybe she's going to take Bernanke's place, continuing Obama's strategy of placing powerful women where they can't do any damage.
Posted by: Andrew at Jul 4, 2009 7:09:34 AM
