Crisis Timelines

Both the NY Fed and the St. Louis Fed have excellent interactive timelines of the recent credit crisis and recession (worth pointing out since the NY Fed has received more love from bloggers). Printed, the SLF timeline is 28 pages, so you might just browse through it online.

For a view from inside the Fed itself, Chairman Bernanke's Jan 13, 2009 speech, The Crisis and Policy Response, provides an overview of where the Fed's been and what it plans for the future. As I write this the Fed's balance sheet is just under $2 trillion (up about $1.1 trillion from a year ago) and banks are still keeping their money safe with the Fed. To get a sense of this, look at the Fed's H.3 release, Aggregate Reserves of Depository Institutions and the Monetary Base. Banks are required to hold just over $56 billion with the Fed but instead currently have over $790 billion in reserves (down a bit, which is good). Normally they would have around $2 billion in excess reserves.

We are starting to see more details of how the Fed will unwind, but until we see how it actually goes, and how quickly they respond to growing threats of inflation, the markets will likely remain on edge and talk of "green shoots" and such seems really premature. The upcoming nomination for the Chairman of the Fed will be an important signal. Despite being "their guy," a vote for Bernanke is a vote for price stability while a vote for Summers (or whoever else) is really a vote for inflation and easy money. Lots to watch for in the coming months.