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Monday, December 23, 2013
❄ Festive Recipes for your Holidays ❄
Tuesday, November 26, 2013
This November at IFTTT we’re thankful for…
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Sunday, November 10, 2013
AFI Fest: David O. Russell Sneaks 'American Hustle' First Scene: 'Everybody ...
At the Nov. 8 AFI Fest tribute to David O. Russell, the director screened the first six minutes of the hotly anticipated American Hustle, which stars Christian Bale and Amy Adams as con artists working for federal agent Bradley Cooper.
The audience chuckled at the first words in the clip: 'Some of this actually happened,' and again when Bale, somewhat resembling Tom Cruise's fat Les Grossman character in Tropic Thunder, laboriously and hilariously prepares a bald man's elaborate comb-over, as America's tune 'Horse With No Name' plays on the soundtrack.
VIDEO: David O. Russell's 'American Hustle' Debuts First Full Trailer
Then he joins brassy British-sounding con woman Adams, her braless breasts barely contained by an open shirt, and Cooper's irritably high-strung Brooklyn Federal agent to sweet-talk a mayor ( Jeremy Renner) into accepting an attache case stuffed with cash, to the tune of Steely Dan's 'Dirty Work.' Jennifer Lawrence, who plays Bale's wife, did not appear in the clip, but at the pre-screening party at the Hollywood Roosevelt Hotel, she said, evidently referring to the film, 'I come in with a big pow!'
Despite hours of horrifying sound problems that provoked Russell to walk out of the event briefly, muttering, 'No way!' the clip played well the second time it was screened, when the sound worked. Russell graciously returned to acknowledge the applause. Though it's hard to tell how the whole film will go over, the first scene clearly resonated with the AFI crowd.
Russell noted that American Hustle, a potential Oscar magnet that opens Dec. 13 (and Dec. 18 in wide release), is in the style he discovered with 2010's The Fighter and developed in 2012's Silver Linings Playbook -- a character-based piece rooted in a real story. ' The Fighter was a great revelation to me, about these people, the way they talk, their behavior, their emotion, their romance, their heartbreak,' Russell said. 'In Silver Linings, I took the true story and put my own life into it. In American Hustle, I took some of the true story and made it personal and fictional, so it became a movie.'
Asked what that means, Russell replied, 'It means that I want to focus on the characters more than an event. In American Hustle, there was an event in the '70s where a Bronx-born con artist and his partner in crime -- that's Christian Bale and Amy Adams, a woman from England, or supposed to be from England -- were forced to work for the Federal government, and they taught the government how to con, and how to create a theater to draw other people in, based on what their hopes were. And this was during a recession. So I wanted to make it about those people and their love affair, these two characters, and Christian's wife, really -- that's Jennifer -- a very, as she describes her, 'a Picasso of a passive-aggressive[ness]. Jennifer was very excited about playing someone wildly different from who she's ever played, a real housewife of Long Island.'
'Everybody [is] playing against type,' said Russell. 'Jeremy Renner, who's very guarded typically, play[s] a big, open-hearted Italian mayor of a New Jersey community, who wants to do anything for his community. There's a real romance between him and Christian Bale as well. And Louis CK -- I'm probably answering too many questions.' In fact, Russell didn't answer very many questions about American Hustle, but he well explicated his previous career under Jenelle Riley's gentle interrogation.
When Riley asked what more we can expect from the film, Russell grinned and said, 'Well, there will be sound!'
from newsandtalking.blogspot.com News And Talking
George Clooney Honored by "Great Friend" Julia Roberts at BAFTA Britannia ...
Kevork Djansezian/Getty Images for AFI
George Clooney may have been the big honoree at tonight's BAFTA Los Angeles Jaguar Britannia Awards in Beverly Hills, but that didn't stop his A-list celeb friend Julia Roberts from cracking some jokes about the Oscar winner.
'I'm normally in my second REM cycle by now so let's get this done,' Roberts joked on stage while presenting Clooney with the Stanley Kubrick Britannia Award for Excellence in Film. 'George Clooney, or as my daughter calls his, 'George Looney.' So, so honored to be here tonight. And there are two obvious reasons why I was chosen to do this.'
'One, was out of town,' she went on. 'Two, , he's in town but he was unavailable. I consider George a friend. We have worked together in many capacities. We have acted together a few times. He's been my producer and my director, all of which he is immeasurably gifted at. He's handsome, he's talented, he is an exemplary humanitarian and a gifted prankster.'
PHOTOS: Clooney & more hot stars in uniform
Clooney was quick to return the compliments. 'It has been such a pleasure to watch the woman you have become,' he gushed. 'Its' very hard for me to be just straight nice because she'll get me later. But just an amazing mother, an amazing wife and a great, great friend. It's really an honor to have her here.'
Before the show, Clooney (sans rumored gals Monika Jakisic or Amal Alamuddin) and Roberts chatted it up during dinner. The former Ocean's Twelve costars were smiling and laughing while catching up.
Other stars who were honored during the bash included Kathryn Bigelow (John Schlesinger Britannia Award for Excellence in Directing), Sacha Baron Cohen (Charlie Chaplin Britannia Award for Excellence in Comedy), Benedict Cumberbatch (Britannia Award for British Artist of the Year), (Britannia Humanitarian Award) and Sir Ben Kingsley (Albert R. Broccoli Britannia Award for Worldwide Contribution to Entertainment).
The BAFTA Britannia Awards will be broadcast on BBC America on Nov. 10 at 9 p.m.
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from newsandtalking.blogspot.com News And Talking
Saturday, November 9, 2013
AFI Fest 2013: David O. Russell shows first six minutes of 'Hustle'
David O. Russell unveiled the first six minutes of his latest movie, 'American Hustle,' during a career tribute at Hollywood's Egyptian Theatre on Friday night. And though technical issues with the sound forced the footage to be stopped and restarted, it was clear from watching the opening scenes that the filmmaker is working with the same energetic brio and stylistic command that propelled his last two movies, 'The Fighter' and 'Silver Linings Playbook,' to best picture Oscar nominations.
'Hustle' opens with a long shot of Christian Bale's pot-bellied con artist character preparing for a sting operation by fussing and combing and spraying an elaborate hairpiece in a way that recalls Richard Dreyfus sculpting that mound of mashed potatoes into the Devil Towers Monument in 'Close Encounters of the Third Kind.'
'When you see him with his hair, that's one of the themes of the picture,' Russell tells me in a conversation after the tribute. 'What that is for yourself and your life, when you're constructing something. It's real and it's not real. It's both things. It's the best version of yourself. How long does it serve you and how long does it not serve you?'
From the comb-over, we're then taken into a hotel room where Bale, his partner ( Amy Adams, wearing an insanely plunging neckline) and Bradley Cooper's unhinged FBI agent try to coerce a New Jersey politician ( Jeremy Renner) into taking a cash-filled briefcase while surveillance cameras record them.
Noting Adams' dress and a similarly revealing leather jacket seen in a publicity still, Russell smiled and said, 'I wanted her to wear classic fashion of the '70s, and [costume designer] Michael [Wilkinson] took it where he took it. She was game and she's never been so glamorous or beautiful. She's not like that of course the whole time, but she wears a lot of glamorous clothes. She has 50 wardrobe changes. Five. O.'
Russell also revealed that Robert De Niro's role in the 130-minute 'Hustle' will be vital, featuring the 'Silver Linings' alum in a handful of 'important' scenes. ( Jennifer Lawrence, another member of the 'Silver Linings' ensemble, is in the movie too, playing a volatile housewife.)
'There's a whole bunch of surprises in the movie actually,' Russell told me, coyly. Adding that since Thanksgiving falls late this year, it appears that 'Hustle' will start screening for the media before the November holiday. (The movie opens in theaters on Dec. 13.)
Russell was still writing the film last year while promoting 'Silver Linings Playbook' through the awards-season gauntlet. It's the first time in his career he has made movies in back-to-back years.
'I wouldn't want to do it every year,' Russell says. 'But to have done it this once. ... You know, there are guys like the Coen brothers, I've always been impressed by how prolific they are. Or even Woody Allen. Woody loves being in the river too, the river of storytelling and the narrative. That's what I love. I love being with these characters and their narratives as they're trying to change them or remake them. Narrative is everything. Without narrative, I don't know what anything would be, frankly.
'So you strike while the iron's hot,' Russell continues. ' I don't want to take a break when things are going too well. I'm happiest when I'm telling a story. it's very exciting to me. It keeps me young.'
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'Saving Mr. Banks' kicks off AFI Fest with somewhat surreal start 'Blue Jasmine' and Woody Allen were irresistible to Cate Blanchett
from newsandtalking.blogspot.com News And Talking
Clippers bury Rockets behind Blake Griffin, JJ Reddick
HOUSTON -- Blake Griffin and J.J. Redick scored 22 points, and the Los Angeles Clippers used an 18-0 run in the second half to rally for a 107-94 win over the Houston Rockets on Saturday night.
Jamal Crawford had 16 points, Chris Paul added 14 points and 13 assists and DeAndre Jordan had 12 points and 18 rebounds for the Clippers. Griffin also had seven rebounds and Redick shot 8 for 15 from the field.
Los Angeles shot 14 for 23 on free throws, but just 9 for 24 on 3-pointers.
Dwight Howard had 21 points and eight rebounds for the Rockets, but was just 5 for 11 on free throws. Chandler Parsons added 23 points and eight rebounds, while Patrick Beverley scored 19 points.
James Harden, who was a game-time decision with a bruised left foot, had 12 points on 4-for-15 shooting.
Houston finished 17 of 27 from the free throw line.
Trailing 71-60 with 5 minutes remaining in the third, the Clippers scored the final 13 points of the quarter to take a two-point lead on a tip-in by Crawford at the buzzer.
Los Angeles kept the run going to start the fourth, with Crawford capping it with a three-point play with 10:21 remaining in the game to increase the lead to 78-71. Crawford had seven points and Jared Dudley added five points in the spurt that lasted nearly seven minutes.
Houston pulled to 84-80 on Harden's three-point play with 7:21 remaining, but that would be as close as they would get.
Los Angeles had a 9-3 run over the next three minutes to increase the advantage to 92-83 on Griffin's free throw with 4:15 to go.
Houston tried a `Hack a Jordan' tactic with 3 minutes remaining, and despite Jordan missing both free throws, Los Angeles countered by fouling Howard and taking Jordan out of the game. Howard made a free throw to get the Rockets to 97-90, but Redick hit two free throws and Darren Collison made a 3-pointer with 1:39 remaining to make stretch the lead to 102-90.
The Clippers opened up an 18-8 lead midway through the first quarter as Redick scored eight of Los Angeles' first 10 points. Houston finished the quarter on an 11-0 run over the final 3:40 of the period. Howard had 10 points in the first, including the first four of the run.
Houston kept it up in the second quarter, extending the lead to 10 at 39-29 on back-to-back 3-pointers by Beverley with 7:26 left in the period.
The Rockets led 55-46 at halftime.
Game notes
Los Angeles F Matt Barnes missed his third straight game with a right thigh contusion. ... Beverley had a career-high four steals. ... The Sandau Trio Russian Bar, who were on 'America's Got Talent' performed at halftime.
Copyright by STATS LLC and newsandtalking.blogspot.com
from newsandtalking.blogspot.com News And Talking
Trey Edmunds, Virginia Tech cruise past No. 11 Miami
MIAMI GARDENS, Fla. -- Trey Edmunds ran for four touchdowns, the first three of them set up by Miami special-teams miscues, and Virginia Tech knocked off the 11th-ranked Hurricanes 42-24 on Saturday night.
Edmunds had scoring runs of 10, 2, 4 and 1 yards for the Hokies (7-3, 4-2 Atlantic Coast Conference). Logan Thomas completed 25 of 31 passes for 366 yards, giving him consecutive games of 300 yards or more for the first time in his Virginia Tech career.
Stephen Morris completed 16 of 29 passes for 324 yards for Miami (7-2, 3-2), which lost its second straight. Morris had an 81-yard touchdown pass to Stacy Coley and an 84-yarder to Allen Hurns, but the Hurricanes were still outgained 549-352.
Virginia Tech held Miami to 28 rushing yards. The Hokies had 26 first downs to Miami's 12.
The win turns the ACC's Coastal Division into a muddled mess.
from newsandtalking.blogspot.com News And Talking
James White's 3 TDs lift No. 22 Wisconsin past BYU
MADISON, Wis. (AP) - James White ran for two touchdowns and caught a pass for another score, and No. 22 Wisconsin stalled BYU's fast-paced offense in a 27-17 victory Saturday.
BOX SCORE: Badgers 27, Cougars 17
White finished with 147 yards rushing, while Chris Borland looked just fine coming back from a hamstring injury in flying around the field for 13 tackles and two sacks for the Badgers (7-2).
Kyle Van Noy went step-for-step with Borland in a matchup of star linebackers with eight tackles and an interception for BYU (6-3). Taysom Hill threw two touchdown passes to Cody Hoffman, but the dual-treat quarterback was held in check by Wisconsin pressure.
COLLEGE FOOTBALL'S WEEK 11 HIGHLIGHTS
White locked up the win with his third score on a 14-yard run with 13:51 left in the fourth for a three-possession lead.
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from newsandtalking.blogspot.com News And Talking
James White's 3 TDs lift No. 22 Wisconsin past BYU
MADISON, Wis. (AP) - James White ran for two touchdowns and caught a pass for another score, and No. 22 Wisconsin stalled BYU's fast-paced offense in a 27-17 victory Saturday.
BOX SCORE: Badgers 27, Cougars 17
White finished with 147 yards rushing, while Chris Borland looked just fine coming back from a hamstring injury in flying around the field for 13 tackles and two sacks for the Badgers (7-2).
Kyle Van Noy went step-for-step with Borland in a matchup of star linebackers with eight tackles and an interception for BYU (6-3). Taysom Hill threw two touchdown passes to Cody Hoffman, but the dual-treat quarterback was held in check by Wisconsin pressure.
COLLEGE FOOTBALL'S WEEK 11 HIGHLIGHTS
White locked up the win with his third score on a 14-yard run with 13:51 left in the fourth for a three-possession lead.
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from newsandtalking.blogspot.com News And Talking
Belfort vs. Henderson predictions
Saturday will mark the second time in four days that the UFC is live on Fox Sports 1, which means it is time to break out the crystal ball once again and offer up some picks for UFC Fight Night: Belfort vs. Henderson.
Vitor Belfort (23-10) vs. Dan Henderson (29-10)
As good as Henderson has been over his lengthy, decorated career, he has become too one dimensional to pick at this point, at least against strong competition like Belfort.
While there is always the potential of the 43-year-old landing that nasty overhand right of his, it's easy to see it coming these days, and given that Belfort has a significant speed advantage and much younger legs, there is little chance of it happening here.
Look for Belfort to pace himself, staying out of harm's way and doing damage in short bursts from the outside. Though the chances of him knocking out the durable veteran Henderson (he's never been KO'ed in his career), 'The Phenom' should win a fairly clean decision here.
Prediction: Vitor Belfort by Unanimous Decision
Cezar 'Mutante' Ferreira (6-2) vs. Daniel Sarafian (8-3)
These two were supposed to meet in the Ultimate Fighter: Brazil middleweight finals last summer, but an injury to Sarafian kept it from happening. Both have since made a pair of appearances in the Octagon, and will finally lock horns here.
'Mutante' is Vitor Belfort's protégé and I think we see the student earn a victory on the same card as the teacher in this one.
Ferreira is the most explosive and athletic of the two, and looks to have the superior conditioning as well. Sarafian looked very good last time out, but took a while to get going in his UFC debut against C.B. Dollaway. He'll start sluggish here, and Ferreira will make him pay for it.
Prediction: Cezar Ferreira by TKO, Round 1
Rafael 'Feijao' Cavalcante (11-4) vs. Igor Pokrajac (25-10)
'Feijao' can't possibly look as poorly as he did against Thiago Silva last time out... can he?
Both men need a victory in a bad way, and while the abysmal showing Cavalcante turned in last time should make Pokrajac the choice, the Croatian has a tendency to play to his opponent's strengths, and it will cost him here.
Much like he did in his fight with Vinny Magalhaes, Pokrajac will make a mistake along the fence, leaving his neck out, at which point, 'Feijao' will snag a guillotine, and secure the finish.
Prediction: Rafael 'Feijao' by Submission, Round 1
Paulo Thiago (15-5) vs. Brandon Thatch (10-1)
Thatch is more than just a regional talent that has been beating up tomato cans on smaller shows, and the finisher known as 'Rukus' should continue to prove that here.
As much as Thiago is a significant step up in competition, there is nothing in Thatch's background that suggests he's not capable of making the leap. He's an aggressive, offensive fighter that won't be overwhelmed fighting in Brazil, and his power is legit.
Thiago will need to close the distance to have a chance, and Thatch will catch him on the way in.
Prediction: Brandon Thatch by TKO, Round 1
Ryan LaFlare (8-0) vs. Santiago Ponzinibbio (18-1)
LaFlare maintained his perfect record through his UFC debut, using his superior wrestling skills to earn a decision win over Ben Alloway back in April. Now he faces off with Ponzinibbio, who would have been a finalist on Season 2 of TUF: Brazil had a broken forearm not sidelined him.
While LaFlare could certainly turn this into another wrestling exhibition, there is just something about the Argentine Ponzinibbio that is hard to overlook. Going 18-1 is one thing, but mixing in 16 finishes through those 18 victories speaks to an ability to capitalize on openings and win fights by various methods.
Ponzinibbio will be active off his back if he's put there, and do just enough to earn the nod on the scorecards.
Prediction: Santiago Ponzinibbio by Unanimous Decision
Rony Jason (13-3) vs. Jeremy Stephens (21-9)
After three straight wins against lower tier opposition, Jason gets a significant step up in competition here, taking on Stephens in his second appearance at featherweight and 17th trip into the Octagon.
As much as this is the toughest fight the TUF: Brazil featherweight winner has faced to date, he's shown improvement each time out, and has the kind of all-around skills to get the better of 'Lil' Heathen' here.
Stephens can be too aggressive for his own good at times, and while he worked the ground-and-pound well against Payan, Jason is much more of a threat of his back, and has far more power standing.
Look for the Brazilian to land with his hands, stun Stephens, and finish him with the submission.
Prediction: Rony Jason by Submission, Round 2
Godofredo Pepey (9-2) vs. Sam Sicilia (11-3)
This one comes down to whether Pepey wants to use his ground game or not. For the record: he should, as he's the superior of the two on the canvas, and Sicilia throws everything with power.
The problem is that sometimes he gets too caught up in the energy of the fight and too aggressive, and it costs him, as it did last time out against Felipe Arantes. When he should be working hard to close the distance and fight on the ground, Pepey will leave his chin exposed, and Sicilia will tag him.
Prediction: Sam Sicilia by TKO, Round 1
Thiago Perpetuo (9-1-1) vs. Omari Ahkmedov (11-0)
This one is easy: with the run of success being enjoyed by the recent slew of Russians entering the UFC, it's impossible to pick against the unbeaten Ahkmedov.
Prediction: Omari Ahkmedov by TKO, Round 1
Thiago Tavares (17-5-1) vs. Justin Salas (11-4)
Salas looked really good earning a win over veteran Aaron Riley last time out, and Tavares hasn't been seen since Khabib Nurmagomedov dropped him with a single punch back in January.
Tavares' rust and Salas' more fluid striking game give 'J-Bomb' the edge.
Prediction: Justin Salas by Unanimous Decision
Daron Cruickshank (13-3) vs. Adriano Martins (24-6)
Cruickshank does a very good job of maintaining space and using his kicks to score without putting himself in too much danger.
As dicey as it is to keep tapping 'Out of Towners' in Brazil, this is Martins' first fight since last January, and 'The Detroit Superstar' is a much better than the opposition the Brazilian has faced as of late.
Prediction: Daron Cruickshank by Unanimous Decision
Jose Maria Tome (33-4) vs. Dustin Ortiz (11-2)
Ortiz is a nice addition to the flyweight division and should eventually have some success, but this feels like a tall order in his debut.
Tome looked good in the early going of his fight with John Lineker, and likely would have beaten just about anyone else, except than Lineker has a granite jaw and ate some gnarly shots before firing back with fire of his own and putting 'No Chance' away.
After losing for the first time in five years, look for Tome to start another winning streak here.
Prediction: Jose Maria Tome by TKO, Round 2
from newsandtalking.blogspot.com News And Talking
Fed Anxiety Rises as QE Increases Risk of Loss With Costs
The longer the Federal Reserve continues its bond-buying stimulus, the higher the odds it will face a year without any money to give the U.S. Treasury after taxpayers received a record $88.4 billion profit in 2012.
The Fed's financial-crisis actions -- from acquiring debt in the 2008 rescues of Bear Stearns Cos. and American International Group Inc. to three rounds of quantitative easing -- have led so far to the record payments. Now, the prospect of a stronger economy and rising interest rates means the value of the Fed's bond holdings will fall at the same time its funding costs climb because the central bank pays interest on the excess reserves it holds for banks.
This could cause operating losses and invite increased scrutiny from lawmakers already critical of the central bank's policies.
That's a risk central bankers are grappling with as they consider when to slow the $85 billion monthly pace of their government and mortgage-backed securities purchases. Federal Reserve Bank of New York President William C. Dudley said in a speech last month that the central bank's balance-sheet expansion does 'create some budget risk' that threatens the institution's independence.
'They've done a few things to try to insulate themselves from this concern, but I suspect in the back of their minds it still haunts them,' said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. 'It's not going to go away.'
Key Question
Dudley said Oct. 15 in Mexico City that the Fed's 'traditional monetary-policy framework' has helped assure the central bank's budget independence and thus support its overall independence. A 'key question' is how unconventional measures that have ballooned the central bank's balance sheet to a record $3.85 trillion may have threatened that status, he said.
'The Fed is a lightning rod: It attracts withering criticism from the Republican base,' said Greg Valliere, chief political strategist at the Potomac Research Group in Washington. 'So even after several years of turning huge profits over to Treasury, losses would embolden the Fed-haters.'
The Fed receives interest payments on its holdings of government securities and mortgage debt. It uses this and other income for the operations of its board of governors and 12 regional reserve banks, returning the remainder to the Treasury, where the funds are added to the department's total receipts.
Legitimate Concern
The prospect of no remittances prompted questions earlier this year from Republican lawmakers. Central bank losses are 'a legitimate concern and something we will be watching,' Representative John Campbell of California said in an interview in February. He leads a monetary-policy subcommittee of the House Financial Services Committee.
Federal Reserve Bank of Atlanta President Dennis Lockhart said today that the central bank will consider reducing the pace of its bond buying at next month's policy meeting.
'I would not take off the table at least consideration at that time,' Lockhart told reporters in Oxford, Mississippi, in response to a question. 'The question of changing the mix of accommodative tools ought to be on the table at every meeting for the foreseeable future.'
Funding Assets
Historically, the Fed didn't have to use any of its interest income to fund its assets because it didn't pay interest on the cash banks put on deposit. In 2008, the Fed gained the ability to pay interest on these reserves -- a tool it plans to rely on to tighten policy and keep its bloated balance sheet from spurring inflation. The rate is currently 0.25 percentage point.
As the Fed's balance sheet grows, so do total excess reserves because under QE, policy makers direct the markets desk at the New York Fed to buy securities from primary dealers, or brokers who are authorized to trade directly with the central bank. That adds funds to the dealers' accounts and creates reserves at their clearing banks, increasing the amount of money the Fed will have to pay interest on.
'If the balance sheet expands further from here, the possibility of a loss becomes more and more real,' said Roberto Perli, a partner at Cornerstone Macro LP in Washington and a former Fed economist.
Interest Rates
At the current balance-sheet level, an interest rate of 4.9 percent would be sufficient to wipe out the Fed's income, according to Perli's calculations. If the balance sheet grows for another year, the rate that causes interest on reserves to produce a loss falls to 4.3 percent.
'It's not dangerous yet, but it's getting there,' said Perli. That's because, in the longer-run, most Fed officials see their target rate rising to 4 percent.
Fed policy makers have tried to address the prospect for losses from the bond holdings themselves by abandoning a plan to sell mortgage-backed securities as part of their eventual exit strategy.
Chairman Ben S. Bernanke said in June the central bank would hold on to the debt after Fed economists led by Seth Carpenter, a senior associate director in the Board's Division of Monetary Affairs, said in a January paper that the institution was on course to lose an unprecedented amount of money and might be unable to remit a profit to the Treasury for as long as six years.
Mortgage Bonds
Carpenter updated his paper and estimates in September to reflect the decision not to sell mortgage bonds. He found the central bank can continue to have earnings by never selling these securities -- as long as the benchmark federal funds rate gradually climbs from near zero to 4 percent by 2018, with the yield on the 10-year Treasury note slowly rising to about 5 percent from 2.6 percent at 4:59 p.m. yesterday in New York, according to Bloomberg Bond Trader data.
Under a higher-interest-rate scenario -- where 10-year Treasury yields climb 3 percentage points by the end of 2016 -- the Fed doesn't remit any money to the Treasury from 2017 to 2019 if it refrains from selling any bonds, and has no money to pass on for six-and-a-half years if it does sell securities, the Carpenter paper shows. The Fed accounts for a loss as a 'deferred asset.'
'It feels like they've tried to convince themselves this isn't a problem, in part because they came up with this deferred-asset way of looking at operating losses and because they switched to a no-asset-sale approach,' said Feroli, a former Fed Board economist. 'As you add up really big numbers, it does start to creep back into their thinking.'
'Real' Risk
Dudley said Oct. 15 that while 'this risk is real,' it is 'not a big threat' because rates would have to 'rise appreciably' for losses to occur.
Also, 'we should take a long-term perspective,' reflecting the Fed's elevated remittances of about $80 billion annually 'in recent years,' compared with $20 billion to $30 billion before the financial crisis, Dudley said.
Four economists including Frederic Mishkin, a former Fed governor and co-author with Bernanke, said in a paper presented in New York on Feb. 22 that the central bank's grip on policy may weaken if losses coincide with high U.S. budget deficits and an inability of Congress and the White House to put fiscal policy on a sustainable path.
'This mix could induce a bias toward slower exit or easier policy and be seen as the first step toward fiscal dominance,' the economists said in the paper, written for the U.S Monetary Policy Forum, referring to fiscal influence on monetary policy. 'It could thereby be the cause of longer-term inflation expectations and raise the risk of inflation overall.'
Stable Profits
While deciding against selling mortgage debt leads to more stable profits, the strategy change would mean the central bank's balance sheet wouldn't return to normal for the foreseeable future, according to the Fed economists. Even by 2025 -- almost two decades after the housing bubble that precipitated the financial crisis began to burst -- the Fed still would own $407 billion in mortgage bonds.
The Carpenter projections assume the Fed pares the pace of its bond purchases in December and finishes the program in June.
Economists expect quantitative easing to go on for longer. The Fed won't begin tapering its bond buying until March and will continue purchasing securities until October, according to the median estimate of 40 analysts in a Bloomberg News survey last month.
Economic Benefits
'The right way to think about it is -- what were the economic gains or benefits associated with the way the Fed manages the portfolio?' said Robert Shapiro, chief executive officer of Sonecon LLC, an economic advisory firm in Washington.
'Congress will ask about all these losses, if taxpayers will be on the hook? Well, taxpayers are on the hook for interest payments that rise with other interest rates, but that's always the case,' said Shapiro, a former Commerce Department official under President Bill Clinton.
'Will they demand an accounting from Janet Yellen?' he said, referring to the Fed vice chairman, who was nominated by President Barack Obama to succeed Bernanke when his term ends Jan. 31. 'They certainly could.'
To contact the reporters on this story: Caroline Salas Gage in New York at csalas1@bloomberg.net; Joshua Zumbrun in Washington at jzumbrun@bloomberg.net
To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net
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