“Don’t pay attention to those people leaving; some people come for the briefing,” Larry W. Smith told his macro class as we left fifty minutes into the seven o’clock night class.

Hiro, Dave, and I went to the briefing at the beginning of his class.

He was talking about the recent turbulence in securities markets around the globe. It is only week three and earlier in the term than Larry would normally deal with monetary policy, but as he said he is only a “humble servant” of the “matrix master” (the central bankers).

The Federal Reserve Board met on Monday, the evening of a U.S. holiday, Martin Luther King Jr. Day, after global markets had fallen and they wanted to prevent a similar drop in American markets which would reopen on Tuesday. They chose to change the overnight rate by 75 basis points.

“If you want to be the elite of the planet you need to know what a basis point means. . . . Using hundredths of per centage points means you are working with hundreds of millions of dollars,” he said.

The Bank of Canada reduced their rate by 25 basis points.

“The Canadian reductionwas a lot more Canadian,” Larry quipped.