The company's innovations included a pulpwood grinding machine still known throughout the paper industry as Great Northern grinders. High-pressure steam generated by burning waste bark was routed first through generator turbines, and the low-pressure exhaust steam was then used to dry the paper. Midth-century paper production of 1, tonnes per day was sold to newspapers east of the Mississippi River. In turn Baxter donated the land to the state, for what became the present day Baxter State Park.
In the s its timber holdings increased to more than 2 million acres and its work force was supplemented during World War II by a prisoner of war camp at Seboomook Farm near Moosehead Lake. It produced corrugated linerboard. It ended the practice of floating logs down the river via log driving , and instead shipping them by truck. The Inexcon holdings in Maine went into bankruptcy in In Brookfield Asset Management bought the mills after the company filed for bankruptcy.
They revived the Great Northern Paper name. The Millinocket mill was never reopened, but for a while it seemed that the East Millinocket mill could improve its financial status. Within the year of the Cate Street purchase and the reopening of the East Millinocket mill over people had been hired. Just one year later the mill was called upon to supply the paper needed to produce the popular trilogy "Fifty Shades of Grey.
In Cate Street Capital announced plans to tear down virtually all the mill buildings at the Millinocket plant, and replace them with structures to operate a Torrefaction wood operation, under the name of its subsidiary Thermogen Industries.
In the over year-old paper mill was forced to close down its operations. Originally the company and workers were hopeful that the closure would be temporary.
From Wikipedia, the free encyclopedia. Companies portal Maine portal Wisconsin portal Georgia U. So the Fed, being economic, always finds a spot on the curve where the funds flow keeps the staff just busy keeping competitive with private banks, the Fed chooses their best spot to bet, just like any other large TBTF bank.
But their major client is Treasury and the Fed operates so as to marginally favor government debt, help them face the TBTFers. The industry view forgets that the Fed does not just suck up bonds, it issues interest-bearing reserves in exchange.
You can change the first digit and add a bunch of zeroes later. Next add the new participant. The Fed decides to intervene with QE. The right hand of the government is buying debt from the left hand of the government issuing the debt. In the regular course of business, the US Treasury has to fund the government largesse, by issuing debt.
However, instead of the Rest of the World buying all the debt, the Fed jumps in as a new participant. I wouldn't be suprised if the different views come from different perception of time. Industry tends to look on a shorter time frame of quarters to years, while academia takes the longer view, 3 to 5 years. If that were the case I could see how both are right - we just have yet to see the long term effects of qe, and will need another decade to research it's impact.
In this discussion between JC and TS, I'd like to know how swaplines interfere with the picture of international flows. Can they be a sneaky way to close the circle? Or are they mostly a method for the powerful to build and maintain monetary power over others? What is the power of the FED over Euroland?
Certainly Denmark can only survive in its stance thanks to its Euro swapline. Dear Professor Cochrane, It must seem obvious to you but I would guess to many non-economists and certainly to me it is not clear why the constraint that someone hold the reserves created when the fed buys assets means a priori there is no impact to rates? I suppose the answer is either simple and can be explained in a paragraph or so, or else complex and relies on some theory which you could name and refer us to.
No, that point does not imply no effect. It just implies that the usual thinking which leads to a huge effect is wrong. It's almost like a change operation. That might indeed do something. If people overall really care a lot about holding 10 year government bonds rather than overnight bonds, there could be small differences in interest rates. There are other theorems that say no effect at all, but that needs a few more assumptions. But an argument that ignores the fact that we are holding just as many reserves as we gave up government bonds is false.
Even there I have overstated. The treasury sold more bonds than the Fed bought. Does the Treasury's choice of what kind of bonds to sell us really have a huge impact on interest rates? Was the recession largely due to the Treasury's fault in selling us the wrong length bonds, and good thing the Fed was there to undo it?
Does this actually not so large rearrangement of the maturity structure of a given amount of government debt in private hands really spark massive bubbles and stimulus and so on? Well, per your question, it's possible. But less likely when you realize it's just a rearrangement not a change in the overall amount. Thanks for the clarification—it Is very helpful to know I was not just missing some obvious point. Anyway it certainly seems as though adjusting the available aggregate duration, buying mortgage pass throughs, or even as in Europe buying credits is more than just trading a 20 for two 5s and a This is largely excellent, and as someone who works at DB, of particular professional relevance.
Credit spreads and I believe, implicitly, the equity risk premium are time varying and correlated to the level of interest rates. To adjust your example: I work in debt capital markets, helping banks issue term bonds. For over five years I helped banks issue in Japan. As JGBs approached zero, the credo spreads banks paid fell from the 30s to a handful of basis points I asked Veronesi this question a couple of years ago when at Booth, particularly because my markets experience led me to think their was a flaw in the simple representation of the CapM.
He agreed, but pointed me in your direction as the expert on time varying risk premia My larger point is that, to the degree Fed action substantially artificially changes the level of Rates, they absolutely change risk premia, and to the degree that there is stickiness in investor return targets, this will change their purchase decisions by necessity.
I think I may have provided this link while catching up on your blog last year, but here it is again - it supports your view and seems relevant. Keep it short, polite, and on topic.
Thanks to a few abusers I am now moderating comments. I welcome thoughtful disagreement. I will block comments with insulting or abusive language. I'm also blocking totally inane comments. Try to make some sense. I am much more likely to allow critical comments if you have the honesty and courage to use your real name. Saturday, February 24, Slok on QE, and a great paper. This was also the conclusion of the discussion, where several of the FOMC members present actively participated.
Nobody in academia or at the Fed is able to show if QE, forward guidance, and negative interest rates are helpful or harmful policies. Despite this, everyone agreed yesterday that next time we have a recession, we will just do the same again. And if it did work, then removing it will have no consequences? There is a big intellectual inconsistency here. Investors, on the other hand, have a different view. Almost all clients I discuss this topic with believe that QE lowered long rates, inflated stock prices, and narrowed credit spreads.
Because when the Fed and ECB buy government bonds, then the sellers of those government bonds take the cash they get and spend it on buying higher-yielding assets such as IG credit and dividend-paying equities. In other words, central bank policies lowered risk premia in financial markets, including in credit and equities.
As QE, forward guidance, and negative interest rates come to an end, risk premia, including the term premium, should normalize and move back up again. And this process starts with the risk-free rate, i.
Treasury yields moving higher, which is what we are observing at the moment. I'm interested by the latter tension: Industry and media commenters are deeply convinced that the zero interest rate and QE period had massive effects on financial markets, in particular lowering risk premiums and inflating price bubbles. I'm deep in the academic view. Industry analysis is very insightful about individual traders and investors and the mechanics of markets but forgets about adding up constraints and equilibrium which are the bread and butter of academia.
You personally may sell a bond and put the money in to stocks. But someone else has to sell you that stock and hold the reserves. So there is no relationship at all in basic economics between the level of interest rates and the risk premium, or between the maturity structure of outstanding government debt reserves are just overnight government debt and the risk premium.
That one cannot see any movement at all in 10 year rates or inflation with QE is also noteworthy. But us academics need to listen as well as to lecture. Often industry people know something we don't. So I find this striking difference interesting. Though I haven't changed my mind yet. Most previous studies have found that quantitative easing QE lowered long term yields, with a rough consensus that LSAP purchases reduced yields on year Treasuries by about basis points. We argue that the consensus overstates the effect of LSAPs on year yields We find that Fed actions and announcements were not a dominant determinant of year yields and that whatever the initial impact of some Fed actions or announcements, the effects tended not to persist.
Most of the pro-QE evidence was how yields moved on specific QE announcements. We all know there is price pressure, but it usually lasts only a few hours or days.
Much commentary has presumed the price pressure was permanent, as if there is a static demand curve or individual bonds. And the first work will naturally pick the events with the biggest announcement effects, then incorrectly generalize. If QE has no effect, then the maturity distribution is irrelevant, as Modigliani and Miller would have predicted, no? A much-recycled graph showing 10 year rates have been trundling down for 20 years unaffected by QE or much of anything else, and that actual QE purchases - - increases in reserves -- are associated with higher 10 year rates: Posted by John H.
Matt Young February 24, at A February 24, at 1: Kevin Erdmann February 24, at 3: Cochrane February 24, at 3: Kevin Erdmann February 24, at 6: Steven Kelly February 24, at 6: Benjamin Cole February 25, at 7: Anonymous February 25, at
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