This is very useful: it shows me that there's appetite out there for an "economic news preprocessor" and that I should maybe aspire to slightly more comprehensiveness here on Economonitor – something which might come at the expense of my (ahem) "added value".

I did see the reports on the Geithner speech this morning, and I felt that I should blog it, but I decided to wait until I had something to say about it, and then it just kinda fell through the cracks. Should I be blogging things even when I really have nothing to say about them? Even if it's things like data releases? It's hard to know where to draw the line, but this blog is for you, gentle readers, so do please tell me what you want.

As for the Geithner speech, it's really good, and I recommend that if you're interested in such matters, you go and read the speech itself rather than trying to reverse-engineer what Geithner said from what the WSJ or the FT said he said. The speech is smart, subtle, and extremely sophisticated – exactly the kind of thing that a financial journalist on deadline hates to be told to summarize.

For what it's worth, I agree with DeLong that the WSJ piece is better. I'm not sure that Geithner's remarks on the subject of banks' margin requirements for their hedge fund clients were quite as front-and-center as the WSJ would make it sound: Geithner seemed to me to be advocating a much more holistic approach to risk management. But clearly he was mostly talking about the way in which bank regulators regulate banks, and was not advocating that the NY Fed or anybody else start regulating the hedge-fund industry, as the FT made it sound.

Geithner's speech is long, and I'm not going to to précis it. But I'll leave you for the weekend with a bit of very, very dry central-banker humor:

If individual dealers to a very large hedge fund each operate with adequate knowledge of the risk profile of the fund, if they each make conservative judgments about their potential direct exposure to the fund in a stress scenario, if they limit the overall exposure of the firm as a whole to the broader market distress that might accompany that failure of a major hedge fund, if they compensate for the uncertainty in making these judgments by charging appropriate risk premia or building in a greater cushion against adversity, and if the supervisory constraints on the core institutions adequately offset the moral hazard that comes with that relationship, then the financial system as a whole will be less vulnerable to distress in the hedge fund sector.

That's humor as in "Dr Strangelove", of course. Geithner knows, and Geithner knows that we know, that none of these things is plausible, let alone likely. Geithner runs the institution which had to coordinate the bailout of LTCM, and I read this speech as Geithner saying that although certain risk-management systems might have improved since LTCM collapsed, there's still as much systemic risk from the hedge-fund industry now as there ever was – if not substantially more. What's more, a tweak to margin requirements won't change that. Reading between the lines, Geithner seems to be saying that if margin requirements went up, the main effect would be that banks' Tier 1 capital would just go down to compensate. In financial-sector regulation, there are no easy answers any more.

Should Hedge Funds Be Regulated?