WILLIAM E. WALTERS
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Bill Walters is a lawyer and Washington lobbyist, representing financial institutions before the U.S. Congress and American regulatory agencies.
He is a former counsel to the U.S. House Ways & Means Committee and the U.S. House Commerce Committee.
He also represents a number of hospitals in Washington as the CEO of ALTHA, a hospital trade association.
Click here to read a more detailed bio.
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BOE MPC
Feb 6-7
Mar 5-6
Apr 9-10
ECB COUNCIL
Feb 2
Feb 21
Mar 6 |
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Jan 29-30
Mar 18
Apr 29-30
Jun 24-25
US CONGRESS
Jan 15 -- House Returns
Jan 16 -- Former NEC Advisor Lawrence Lindsey Testifies before Joint Economic Committee
Jan 17 -- Fed Chairman Bernanke Testifies at House Budget Committee ( Link )
Jan 22 -- Senate Returns
Jan 28 -- State of the Union
Feb 4 -- Bush Administration Budget Released |
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CapitolWorks is a Washington-based executive search firm, specializing in placing government affairs and public policy experts with the nation's leading law firms and consulting practices.
CapitolWorks has placed former Members of Congress and Executive branch officials into nationally-known, private-sector positions.
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Financial Statecraft by Benn Steil of the Council on Foreign Relations and Robert Litan of Brookings is the best book of 2007 for those interested in international finance.
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| CRS Searching for Government Finance Experts |
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The Congressional Research Service (CRS), the public policy office of the U.S. Congress, is recruiting new analysts, including those with expertise in governmental finance and monetary policy.
Many of the positions are being offered at the GS-15 scale (up to $143,000 per annum plus bonuses).
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"Charles Gasparino provides a blow-by-blow account of Mr. Grasso's remarkable rise and fall [at the NYSE].... At the same time, Mr. Gasparino provides a rare inside glimpse of how financial titans like Henry M. Paulson Jr., the former Goldman Sachs chairman who is now Treasury secretary, conduct their affairs. It is not a pretty picture, but it demands the attention of anyone who cares about capitalism in this country." -- The New York Times
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CENTRAL BANKING & US HISTORY: Presidential candidate Ron Paul would like to abolish the Federal Reserve. He wouldn't be the first President to do away with an American central bank. (Read more) |
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EU vs US: Is the ECB from Mars and the Fed from Venus?
 Granted, the most important story of the week was the ongoing train wreck on American capital markets. The rest of this week's edition examines that train wreck but this week's most interesting story has to be the possible divergence taking place between the Fed, the BOE and the ECB.
As Chairman Bernanke was suggesting aggressive Fed rate cuts in the near future, the ECB and BOE were holding rates steady and the ECB's president, Jean-Claude Trichet, suggested that the ECB might actually raise rates soon. (Link to Mr. Trichet's Speech.)
Here is how an FT editorial summarizes the difference of opinion between the Fed and the ECB: " On foreign policy, Americans are said to be from Mars (that is, hardheaded) and Europeans from Venus (squishy). On monetary policy, however, the opposite may hold true." (Link to FT editorial.)
While some cast Trichet's comments as something of a challenge to Fed hegemony, others point to the EU's highest inflation rate in six years as justification for higher rates.
As FT reporters note, the ECB is not yet ten years old and " is still burnishing its inflation-fighting credentials." (Link to the FT.)
The NYT's Mark Landler discusses the divergence in rate prospects and reviews the whole "decoupling" debate whether it is possible for the EU and rest of the world to divorce itself from the US economy. It's an excellent read. (Link to NYT.) |
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BOE: MPC Disappoints Futures Market and Leaves Rates Unchanged
 Last week, the Bank of England's Monetary Policy Committee (MPC) left interest rates unchanged at 5.5%. In December, the MPC reduced its key rate by 25bps cut. (Link to FT.) Futures markets were disappointed and had priced in about a 60% chance the BOE would lower rates again. (Link to FT.)
The pound sterling tumbled to a record low against the euro and lost more ground against the dollar this week as the gloom surrounding the prospects for the UK economy deepened. (Link to FT.)
FT columnist Martin Wolf writes that "the sterling is the next dollar" and is likely to continue falling in the coming year. ( Link to FT's Martin Wolf.) Wolf predicts a significant slowdown in the British economy but sees no need for alarm so long as Prime Minister Brown and Chancellor Darling preserve the UK's low inflation credibility. (The reappointment of BOE Governor Mervyn King is still up in the air, according to Wolf.) Wolf notes that the expected 2008 difficulties for the pound sterling will likely renew the debate over whether the UK should join the euro regime.
The FT reports that Chancellor of the Exchequer Alistair Darling has been on the defensive after the Northern Rock banking crisis: "His low-key approach might have worked in a relative backwater such as social security, it made him look like the victim of events at a frontline department such as the Treasury." However, the FT writes, now he is fighting back. (Link to FT.)
At the same time, of course, the Tories' shadow Chancellor, George Osborne, is criticizing Chancellor Darling's banking plan, saying that powers to take control of failing banks should be vested in the Bank of England, not the Financial Services Authority. (Link to FT.)
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MARKETS: Recession Fears Send Dow Down 5% Since Start of Year & Exacerbate Credit Issues
 With the loss of 1.9% on Friday, the DJIA is already down 5% in 2008 -- in less than ten trading days. As the WSJ's Tom Lauricella reported, this is the worst start for the DJIA since 1991. (Link to WSJ.)
As fears of an American recession grow, so do worries about a general deterioration of credit.
The FT's Michael Mackenzie put it this way: "Settling into the New Year, more evidence has emerged that the shake-out of the credit bust has a lot more room to run." On Friday, it was reported that Merrill Lynch would incur $15bn in writedowns, exceeding the $12bn call of analysts. Bank of America bowed to the inevitable and bailed out Countrywide, the shattered mortgage lender, which back in August had received a $2bn infusion from BofA. (Link to FT.)
The NYT called Countrywide "the troubled lender that became a symbol of the excesses that led to the subprime mortgage crisis." (Link to NYT.) NYT's Eric Dash and Gretchen Morgenson write:
"The deal will significantly bolster Bank of America's position in the mortgage market while rescuing Countrywide from the jaws of possible bankruptcy. Amid higher financing costs, mounting losses and lawsuits over its lending practices, the mortgage lender's survival has been in question for months."
The WSJ noted a obscure caveat in banking law which may trip up the BOA-Countrywide deal. (Link to WSJ.)
The Economist writes: "Things could be worse. Lubricated by copious amounts of central-bank money, banks did at least make it through the year-end in one piece." ( Link to the Economist.)
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THE FED: Chairman Bernanke Raises Hopes of 50bps Cut on January 30
 Federal Reserve Chairman Ben Bernanke pledged aggressive action last week to bolster the weakening economy. "The downside risks to growth have become more pronounced," Chairman Bernanke said in a speech in Washington. "We stand ready to take substantive additional action as needed to support growth." (Link to Chairman's speech.)
Since September, the Fed's FOMC has reduced key interest rates by one percentage point. The Chairman's speech led Fed watchers to assume a 50bps cut, rather than 25bps, at the FOMC's next meeting January 29-30.
In a Bloomberg commentary, Michael R. Sesit writes about the ongoing fears of stagflation and the unique challenge it poses for central bankers. (Link to Bloomberg.)
Proving that the Fed Chairman's job is fairly thankless, the NYT has an article asking "Is Bernanke Too Nice for the Job?" ( Link to the NYT.) Everyone who complains about Chairman Bernanke in the article has a vested interest in lower rates and essentially ignores other global dynamics (See our lead story re the ECB.) My opinion: Give the guy a break. The Fed's clever "Term Auction Facility" has worked pretty well.
Contrast the NYT article with interesting WSJ blog-item by Greg Ip about Bernanke's apparent willingness, according to the well-respected ISI Group, to sacrifice a second term as Fed Chairman:
"We think Bernanke would rather go down as a one-term independent central banker than as one who allowed inflation to rise." Chairman Bernanke's term is up in 2010. See this item for some gossip on who a Democrat president might appoint. ( Link to WSJ Blog.)
Speaking of political appointments, the Washington Post's Jeff Birnbuam recently noted the number of vacancies in key economic posts: The Federal Reserve's seven member Board of Governors has three vacancies and the President's Council of Economic Advisers, a three member panel, has only one serving member, Edward Lazear. ( Link to Washington Post.)
Chairman Bernanke has another eventful week with testimony on January 17 before the House Budget Committee. ( Link.) The FT gives a run-down on what Chairman is expected to say. ( Link to FT.)
If you doubt the Fed Chairman's ability to move markets, read this interesting blog-item by WSJ's Sudeep Reddy. (Link to WSJ Blog.)
Finally, check out this essay -- " How to Put Meaning in Worthless Fed Forecasts" -- by the AEI's Kevin Hassett, a former Fed economist. ( Link to AEI Hassett essay.) The essay reveals some interesting dynamics between Fed staff and BOG/FOMC members. |
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ECONOMY: Bad News -- and Return of Congress -- Triggers Stimulus Debate
 Last week was a rough one for the American economic scene.
Retailers released their December sales figures and reported the weakest holiday shopping season in five years. (Link to NYT.) That led to renewed focus on consumer spending which represents more than two-thirds of U.S. economic output. (Link to WSJ.)
As the WSJ's Peter McKay reported, "the fate of consumption will play a key role in determining whether the economy in the months ahead tips into outright recession." ( Link to WSJ.)
Goldman Sachs released a report predicting a recession in 2008 but said it would be a mild one since the Fed would likely cut the Fed funds rate to 2.5% by the end of the year from the current 4.25%. (Link to WSJ Blog.)
All of this economic news, combined with the return of the US Congress this week, kicked off a spirited debate over the need for an economic stimulus package. Republicans are likely to push for tax relief and Democrats are likely to push for extended unemployment insurance. ( Link to the NYT.)
The Brookings Institute held a great and timely event last week to dicuss the merits of a stimulus package. The panel discussion was chaired by former Treasury Secretary Rubin. As part of the event, Brookings released a new paper. ( Link to Brookings.) |
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TREASURY: Deputy Secretary Kimmitt on Sovereign Wealth Funds
 In the most recent edition of Foreign Affairs, Deputy Treasury Secretary Robert Kimmitt (Bio Link) writes "sovereign wealth funds" (SWFs) are, in many respects, a source of stability for the world financial system. But their recent, rapid growth in both number and size will require a thorough consideration of their impact on the global economy.
Kimmitt writes that altogether SWFs control roughly $2.5 trillion -- a figure now growing, according to some estimates, by $1 trillion a year. He points out SWFs are actually just one of four forms of sovereign investment and it's important to differentiate among the four. The other three include (1) international reserves, (2) public pension funds, and (3) state-owned enterprises. SWF managers typically have a higher tolerance for risk and seek higher returns than do official reserve managers. ( Link to Foreign Affairs.)
The Economist notes that SWF investment helped avoid having one or more big banks go under in 2007 and estimates that $27 billion (and counting) of capital has flowed into the banking sector from SWFs. "Recipients include Merrill Lynch, Citigroup, Morgan Stanley and Switzerland's UBS (as wags now call it, Union Bank of Singapore). These injections may have upset existing shareholders, who have seen their stakes diluted, but they have ensured that no big lender has toppled. At least, not yet." (Link to the Economist.)
On the front page of the WSJ last Friday, reporters noted that both Citigroup and Merrill Lynch are reportedly seeking additional foreign capital. ( Link to WSJ.) |
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Chairman Frank: Speech Tonight on Financial Regulation Entitled "We Told You So"
 House Financial Services Chairman Barney Frank (D-MA) will speak tonight at Harvard's Kennedy School. (Link to Details.)The Chairman's speech is entitled, "We Told You So: A Liberal Perspective on 21st Century Capitalism."
Chairman Frank will discuss the role of regulation in the modern economy, focusing on the role of government versus the widely held belief that markets perform better when they are deregulated. The subprime mortgage problems and the associated financial crisis that started last summer is a case in point, Frank will argue, where financial innovation--coupled with the lack of regulation and government oversight-now threatens the overall economy.
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EVERETT
Nearly two-thirds of French cabinet officials are also running for other elected posts, including various municipal posts, according to the NYT's Elaine Sciolino. One such cabinet official standing for election is French finance minister Christine Lagarde. (Bio Link) Constitutional law expert Dominique Rousseau is quoted as saying, "Seen from the United States, it would be as if the American secretary of the Treasury was running as mayor or deputy mayor of Boston. (Link to the NYT.)
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CENTRAL BANKER
