Former Fed bank chief on paying GS counter-parties in full

"What was done was appropriate because the potential costs of not doing that were probably exceedingly high,” says Gary Stern, who stepped down in August as president of the Federal Reserve Bank of Minneapolis. “It certainly looked very threatening."

~Gary Stern, former president of the Federal Reserve Bank of Minneapolis,  Taxpayers Help Goldman Reach Height of Profit in New Skyscraper, Bloomberg.com, December 27, 2009

Nouriel Roubini: Jim Rogers's $2,000 gold is "utter nonsense"

[Today's forecast by investor Jim Rogers that gold will double to at least $2,000 an ounce is] utter nonsense. [There is no inflation or] “near-depression” [to drive gold prices that high. If a severe depression came to pass, with investors buying canned goods and hiding out in log cabins,] maybe you want some gold in that scenario. Maybe it will reach $1,100 or so but $1,500 or $2,000 is nonsense.

~ Nouriel Roubini, speech at the Inside Commodities Conference in New York, reported by Bloomberg TV, "Rogers's $2,000 gold 'utter nonsense'," November 5, 2009

(Gold rose to a record $1,098.50 today.)

Jim Cramer on investing in banks he admittedly knows little about

"The Citigroup (C) deal was a good deal. It just wasn't good for the bank

I was adamant the other day -- some would say rabid -- that you be in on the deal. I specifically did not want you to buy it ahead of the deal, although I am now being ridiculed -- thanks Huffington Post! -- for suggesting that I wanted you in at $3.70.

Look, I have no idea really how Citigroup is doing. That's because they don't know how it is doing. That's the biggest flaw of the joint, of course. But what does matter is that I think that worldwide GDP growth is going to be stronger than people think, and that will cure a lot of the errors of all banks, including Citigroup.

Sometimes, as I say in Getting Back to Even, bad merchandise turns into good merchandise at a price. The idea that so much supply could knock down Citigroup to where the stock traded is of ZERO interest to me. The dilution? It is manageable.

The main thing is the stupidity of the critics who keep calling it a bad deal. A bad deal is one that breaks print, not one that goes up after.

Make judgments only about whether you make or lose money. That's what you can try to control.
The rest is dross ginned up by people who need something to write or talk about."

~Jim Cramer, "Did You Make Money? Then It Was A Good Deal", TheStreet.com, December 18, 2009, (link)

Alan Greenspan on stock market rally as economic stimulus

“When stock prices go up, the market value of common stock or of equity in banks and other financial institutions rises,” he said. “And the market value of liabilities is importantly affected by the size of the equity market value cushion on banks’ balance sheets.”

~Alan Greenspan, "Greenspan Says Stock Rally Means Lower Stimulus Need", December 17, 2009, Bloomberg.com (link)

Mortimer Zuckerman on creating jobs

Only massive programmes are equal to the challenge of restoring stable growth to our economy. One such programme would be to establish a National Infrastructure Bank, advocated by prominent Democrat Felix Rohatyn, to which the government would assign the $65bn (£40bn, €45bn) annually allocated to support infrastructure construction nationally. The bank would have the capacity to borrow, with federal guarantees, an additional $200bn. This programme would ensure a rational rather than a political investment in infrastructure, and provide long-term infrastructure development on a major scale with a maximum multiplier effect on the economy.

~ Mortimer Zuckerman, "The free market is not up to the job of creating work," FT.com, October 18, 2009

Time on their 2009 Person of the Year

Professor Bernanke of Princeton was a leading scholar of the Great Depression. He knew how the passive Fed of the 1930s helped create the calamity — through its stubborn refusal to expand the money supply and its tragic lack of imagination and experimentation. Chairman Bernanke of Washington was determined not to be the Fed chairman who presided over Depression 2.0. So when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks, investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed's balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation. He didn't just reshape U.S. monetary policy; he led an effort to save the world economy.

~ Time, "Person of the Year 2009," December 16, 2009, by Michael Grunwald

Bill Gates Sr on estate taxes

Society has a just claim on these fortunes. The facts are clear: The estate tax raises substantial revenue from those with the capacity to pay it.

"Senate’s Baucus Seeks Temporary Extension of Estate Tax in 2010", Bloomberg, December 15, 2009,