So the Fed saw the bubble brewing in late 02, yet they cut rates two more times to 1%, then held them below neutral for four years, inflating what is probably the biggest bubble in history. The irresponsibility is almost mind numbing. What's truly ironic about this will be the demands for increased government regulation in the wake of this housing (and soon to be) banking bust, yet it's fault lies clearly at the feet of the biggest single source government intervention in the economy - the Fed. And to think back when I was an econ grad student I wanted to be a central banker.
And to think back when I was an econ grad student I wanted to be a central banker.
Turbo - Is it too late for you to change your mind?
My sister spent a decade and a half working as a prosecutor at the Dept of Justice - she was in the inner circle at criminal tax in DC. Saw the sausage being made everyday.
And while it certainly isn't the Fed, it had many of the same issues... primarily a very complex & conflicting mission and an awful lot of discretion on how policy is executed and initiatives implemented.
She insists to this day that good implementation of mediocre policy produces FAR superior outcomes compared to poor implementation of excellent policy.
My feeling is the laws on the books are just fine regarding our central banking system - they can be made better but that's not the problem. Its the people making the decisions & the decisions they make that hose us and no change or rearrangement of deck chairs (regs) will make the captain pilot a wiser course.
And I am not one of those who think abolishing the Fed is any wiser - then Citibank & the other oligarchs sets our monetary policies. That should be good - not.
We need good leaders and sometimes we get them and sometimes we don't. We didn't this time - that's for sure.
Nah, I like the dark side (debt trading) - most days that is. I'm not in favor of abolishing central banks (let traders set rates - now that would be chaos), but I do think central bankers need to act more like sombre bureaucrats instead of wanna-be investment bankers who pump the system full of liquidity anytime an event comes along that remotely threatens the banking industry (ie. the Asian/LTCM/Russia crisis, potential deflation in 2002, etc). In doing so they've taken moral hazard to new heights, and lost control of the credit system in the process. If boom and bust are in proportion, which history has time and again they are, then the Fed provided the kindling, matches and gasoline for spectacular flame-out in housing, banking and investment finance, which liquidity and ultra-low rates won't be able to resolve. I'll step down off my soapbox now.
So this 02 bit from the FAC did not come from the lips of 03 AG who did use it as a pretext for going to Congress and insisting on some limitations on Fannie and Freddie, yes?
Has anything changed wrt the lender's exposure? Have the 'financial instruments' "disintermediated" the risks and given some of the banks some relief from this historically out-sized exposure (Kasriel)?
(It seems to me Fannie and Freddie are still busy...accounting.)
[It was/is no ordinary job Watson, these were/are professionals.]
Meanwhile, that gurgling sound is the dollar making some adjustments, yes?
NEW YORK TIMES NEWS SERVICE
Makes you want to go HUMMMM
July 26, 2002
WASHINGTON - Congressional negotiators announced yesterday that they had reached agreement on a bill that would rewrite the bankruptcy laws, making it much harder for people to escape their debts when they declare bankruptcy.
dryfly, You've lost me with this:
"My feeling is the laws on the books are just fine regarding our central banking system ... that's not the problem... And I am not one of those who think abolishing the Fed is any wiser - then Citibank & the other oligarchs sets our monetary policies. That should be good - not."
The total repeal of Glass-Steagall allowed for our present day CitiCorps & "the other oligarchs". And, I absolutely believe they're driving our absurdly low ten year yield, which in turn provides all the rationalization the FED needs to validate its weeny monetary policy. (Are current FF rates close to balancing savings-spending? We're awash in liquidity, leveraging & debt! Sure, we'd do better with a PV than a BB. BUT, remember, Wall St. wanted no part of PV until they felt the pain of Burns/Miller. Their objective is profits until they're are no more to be found.)
Our entire financial system IS monstrously out of control & is a HUGE threat to our economic viability.
What's the FED doing? In effect, it's watching, waiting, standing on the sideline saying the part it has control over is doing OK. The statement may be literally correct, but it seems a reprehensible position to me. While, the banking system may not be the direct threat, their Brokerage arms are THE threat. We VERY MUCH need a single point final arbitor over our financial sector's practices & the only body remotely capable of the task is the FED. So, why hasn't BB argued this LOUDLY to Congress? My guess is, he still doesn't have the following of his peers. But, that's another problem.
The total repeal of Glass-Steagall allowed for our present day CitiCorps & "the other oligarchs".
Ya maybe - I hadn't thought of that. Maybe I'm still livin' in the 90s. But again - would Citi be the problem it is IF they had regulators that were willing to regulate?
While, the banking system may not be the direct threat, their Brokerage arms are THE threat.
I do agree if there is a weak link in the legislative armory its in SEC & DOJ/Anti-trust. But again maybe its more enforcement of actual statutes that is the problem. You can pass all the laws you want but if the executive fails to enforce & then appoints judges that fail to rule... how does 'new laws' change anything if they are going to ignore it anyway?
Dryfly, OF COURSE, it is. I was suggesting that instead of expecting those who've shown no character to act with character, we should blow up the trees they're hiding behind. It's outrageous BB hasn't used his pulpit, his Congressional appearances, his meetings with Paulson & his telephone to harshly remind the Administration, Congress, the SEC, Wall St. & the rest of us that we're spinning out of control & putting our future at real risk! Instead, he seems to be trying to win the support of his cohorts by "going along". The FED's wimpy Bank Guidance on Nontradional Mtg. Loans was "pathetic" in light of the OCC Bank survey responses published the week before. What's so wonderful about being the FED head that one would so readily sacrifice the single reason MOST would aspire to the position?
What really upsets me is that it takes 3 years for the people to hear about the content of these talks.
Does our government represent the people or corporate bankers? Why do the bankers and brokerages get to hear the warning and the people, whom our government pretends to represent, get kept in the dark. Not only that, but encouraged to continue taking out risky loans. Bastards.
So the Fed saw the bubble brewing in late 02, yet they cut rates two more times to 1%, then held them below neutral for four years, inflating what is probably the biggest bubble in history. The irresponsibility is almost mind numbing. What's truly ironic about this will be the demands for increased government regulation in the wake of this housing (and soon to be) banking bust, yet it's fault lies clearly at the feet of the biggest single source government intervention in the economy - the Fed. And to think back when I was an econ grad student I wanted to be a central banker.
And to think back when I was an econ grad student I wanted to be a central banker.
Turbo - Is it too late for you to change your mind?
My sister spent a decade and a half working as a prosecutor at the Dept of Justice - she was in the inner circle at criminal tax in DC. Saw the sausage being made everyday.
And while it certainly isn't the Fed, it had many of the same issues... primarily a very complex & conflicting mission and an awful lot of discretion on how policy is executed and initiatives implemented.
She insists to this day that good implementation of mediocre policy produces FAR superior outcomes compared to poor implementation of excellent policy.
My feeling is the laws on the books are just fine regarding our central banking system - they can be made better but that's not the problem. Its the people making the decisions & the decisions they make that hose us and no change or rearrangement of deck chairs (regs) will make the captain pilot a wiser course.
And I am not one of those who think abolishing the Fed is any wiser - then Citibank & the other oligarchs sets our monetary policies. That should be good - not.
We need good leaders and sometimes we get them and sometimes we don't. We didn't this time - that's for sure.
Nah, I like the dark side (debt trading) - most days that is. I'm not in favor of abolishing central banks (let traders set rates - now that would be chaos), but I do think central bankers need to act more like sombre bureaucrats instead of wanna-be investment bankers who pump the system full of liquidity anytime an event comes along that remotely threatens the banking industry (ie. the Asian/LTCM/Russia crisis, potential deflation in 2002, etc). In doing so they've taken moral hazard to new heights, and lost control of the credit system in the process. If boom and bust are in proportion, which history has time and again they are, then the Fed provided the kindling, matches and gasoline for spectacular flame-out in housing, banking and investment finance, which liquidity and ultra-low rates won't be able to resolve. I'll step down off my soapbox now.
So this 02 bit from the FAC did not come from the lips of 03 AG who did use it as a pretext for going to Congress and insisting on some limitations on Fannie and Freddie, yes?
Has anything changed wrt the lender's exposure? Have the 'financial instruments' "disintermediated" the risks and given some of the banks some relief from this historically out-sized exposure (Kasriel)?
(It seems to me Fannie and Freddie are still busy...accounting.)
[It was/is no ordinary job Watson, these were/are professionals.]
Meanwhile, that gurgling sound is the dollar making some adjustments, yes?
NEW YORK TIMES NEWS SERVICE
Makes you want to go HUMMMM
July 26, 2002
WASHINGTON - Congressional negotiators announced yesterday that they had reached agreement on a bill that would rewrite the bankruptcy laws, making it much harder for people to escape their debts when they declare bankruptcy.
Makes you want to go, HUMMMM!
dryfly, You've lost me with this:
"My feeling is the laws on the books are just fine regarding our central banking system ... that's not the problem... And I am not one of those who think abolishing the Fed is any wiser - then Citibank & the other oligarchs sets our monetary policies. That should be good - not."
The total repeal of Glass-Steagall allowed for our present day CitiCorps & "the other oligarchs". And, I absolutely believe they're driving our absurdly low ten year yield, which in turn provides all the rationalization the FED needs to validate its weeny monetary policy. (Are current FF rates close to balancing savings-spending? We're awash in liquidity, leveraging & debt! Sure, we'd do better with a PV than a BB. BUT, remember, Wall St. wanted no part of PV until they felt the pain of Burns/Miller. Their objective is profits until they're are no more to be found.)
Our entire financial system IS monstrously out of control & is a HUGE threat to our economic viability.
What's the FED doing? In effect, it's watching, waiting, standing on the sideline saying the part it has control over is doing OK. The statement may be literally correct, but it seems a reprehensible position to me. While, the banking system may not be the direct threat, their Brokerage arms are THE threat. We VERY MUCH need a single point final arbitor over our financial sector's practices & the only body remotely capable of the task is the FED. So, why hasn't BB argued this LOUDLY to Congress? My guess is, he still doesn't have the following of his peers. But, that's another problem.
Kevin, HUMMMM!
I think the new bankruptcy bill is going to surprise some people next year.
Best to all.
The total repeal of Glass-Steagall allowed for our present day CitiCorps & "the other oligarchs".
Ya maybe - I hadn't thought of that. Maybe I'm still livin' in the 90s. But again - would Citi be the problem it is IF they had regulators that were willing to regulate?
While, the banking system may not be the direct threat, their Brokerage arms are THE threat.
I do agree if there is a weak link in the legislative armory its in SEC & DOJ/Anti-trust. But again maybe its more enforcement of actual statutes that is the problem. You can pass all the laws you want but if the executive fails to enforce & then appoints judges that fail to rule... how does 'new laws' change anything if they are going to ignore it anyway?
That was my point - and I still think its valid.
Dryfly, OF COURSE, it is. I was suggesting that instead of expecting those who've shown no character to act with character, we should blow up the trees they're hiding behind. It's outrageous BB hasn't used his pulpit, his Congressional appearances, his meetings with Paulson & his telephone to harshly remind the Administration, Congress, the SEC, Wall St. & the rest of us that we're spinning out of control & putting our future at real risk! Instead, he seems to be trying to win the support of his cohorts by "going along". The FED's wimpy Bank Guidance on Nontradional Mtg. Loans was "pathetic" in light of the OCC Bank survey responses published the week before. What's so wonderful about being the FED head that one would so readily sacrifice the single reason MOST would aspire to the position?
Instead, he seems to be trying to win the support of his cohorts by "going along".
But if he was a real prick, no one would invite him on hunting trips or over for barbeque.
What really upsets me is that it takes 3 years for the people to hear about the content of these talks.
Does our government represent the people or corporate bankers? Why do the bankers and brokerages get to hear the warning and the people, whom our government pretends to represent, get kept in the dark. Not only that, but encouraged to continue taking out risky loans. Bastards.