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Most of the responsibility falls on the shoulders of our "i'm-too-afraid-and-too-gullible, please-think-for-me" citizenry. Harsh? Perhaps. Reality? For damn sure.
An aroused citizenry has stood up and has been speaking out loudly and clearly for the past year......only to be ridiculed, insulted and told by liberals from the top spot all the way to the bottom of the barrel to shut up and sit down. Thankfully, they have not listened.
An aroused citizenry has stood up and has been speaking out loudly and clearly for the past year......only to be ridiculed, insulted and told by liberals from the top spot all the way to the bottom of the barrel to shut up and sit down. Thankfully, they have not listened.
Just liberals? Do you remember who drew up the TARP plan in the first place? Do you really believe that only liberals are defending the Fed?
The citizenry is also the ones screaming about government debt while they are drowning in their own credit card debt and other debt to pay for oversized houses and SUVs.
If there is anything more tragic than our current banking crisis, it is that the crisis is being blamed on the wrong group, on the bankers, instead of on the primary culprit, government intervention. The tragedy lies in falling to identify the fundamental cause of the problem, thereby ensuring its continuance. Bankers are not entirely innocent of wrongdoing in the present debacle, but to the extent that bankers have been irresponsible, it has been primarily government intervention that has encouraged them to be so.
Leaving the US Treasury in control of with Exchange Stabilization Fund in the presence of an unregulated OTC derivative market with no congressional oversight is like leaving a pile of crack in the room of a drug addict. How can any secretary of the treasury, in seeking to give his president what he wants (low inflation, no recessions, etc), resist the temptation OTC derivatives offer when there is historical precedence to justify their use? After all, dealing with consequences of those OTC derivatives will be the problem of the next secretary of treasury.
On that note I want to look at what happened in the 1990s. The decade began with the apparent collapse of the financial system, as captured by the FDIC chart below showing new bank failures.
My reaction: I stumbled on this Fed transcript last night. I can’t believe the Federal Reserve published something so damning to itself!
1) The Federal Reserve sold options on repos in 1999 that totaled nearly $0.5 trillion of notional value.
2) According to the Federal Reserve’s website: The Fed historically has not engaged in forward or other derivative transactions. The Fed is lying!
3) Auctioning derivatives is something the Federal Reserve’s Trading Desk in 2003 already had experience doing.
4) In June 2003, The Federal Reserve was contemplating selling massive quantity of options sold to reduce risk premiums embedded in longer-term interest rates.
5) If the Federal Reserve did sell those options (and they probably did), the unwinding of the Fed’s derivative positions will likely be very disruptive and send yields sharply higher.
Conclusion: This is proof positive that the Federal Reserve has been abusing derivatives on a dangerous scale since at least 1999.
Just liberals? Do you remember who drew up the TARP plan in the first place? Do you really believe that only liberals are defending the Fed?
The citizenry is also the ones screaming about government debt while they are drowning in their own credit card debt and other debt to pay for oversized houses and SUVs.
I'm referring to an aroused citizenry that has been making a lot of noise over the past year and been subjected to intense ridicule for their efforts, all of it coming from the left.
I'm referring to an aroused citizenry that has been making a lot of noise over the past year and been subjected to intense ridicule for their efforts, all of it coming from the left.
Spoiler
Tea Party
Oh, the Tea Party? You mean those rallies that include old people railing against government health care while imploring the government to keep its hands off Medicare? Look, I'm not saying the Tea Party is completely without merit. But it is hard to take seriously supposedly educated people who drive on public highways and probably completed their education with the help of Pell Grants and subsidized Stafford Loans, all while griping about government spending. The problem is many people believe that government spending that benefits them is good. They just don't think it should benefit anyone else.
The banking industry is one of the most regulated industries we have. Congress has oversight responsibility. If Congress and the regulators did their job, we wouldn't be in the mess we find ouselves.
ROFTLMAO!!!!!!!! Now that is funny. My friend, the banking industry is one of the LEAST regulated industries IN THE WORLD, much less the United States. You can not regulate that which you can not see or affect that which you can not touch!
If Congress and the regulators would have not be pushed into the position they were in '98 & '99 by the banks and tycoons the mess that occurred would have been markedly smaller. Not saying it wouldn't have happened b/c you still had CDS's, but the effect on the economy would have been much less dramatic.
Oh, the Tea Party? You mean those rallies that include old people railing against government health care while imploring the government to keep its hands off Medicare? Look, I'm not saying the Tea Party is completely without merit. But it is hard to take seriously supposedly educated people who drive on public highways and probably completed their education with the help of Pell Grants and subsidized Stafford Loans, all while griping about government spending. The problem is many people believe that government spending that benefits them is good. They just don't think it should benefit anyone else.
And I am giving an example of a citizenry that Hanglo Phucwell described as "i'm-too-afraid-and-too-gullible, please-think-for-me"--a citizenry that isn't afraid to stand up and speak out, in spite of the ridicule from the scum at the top to the scum at the bottom for doing so. If you have ever attended one of the rallies, you would know that it is not doddering old fools that participate them. As for them not being taken seriously--if that be the case, then those who ridicule them are sure wasting a lot of time and energy on such an insignificant and pitiful group.
If there is anything more tragic than our current banking crisis, it is that the crisis is being blamed on the wrong group, on the bankers, instead of on the primary culprit, government intervention. The tragedy lies in falling to identify the fundamental cause of the problem, thereby ensuring its continuance. Bankers are not entirely innocent of wrongdoing in the present debacle, but to the extent that bankers have been irresponsible, it has been primarily government intervention that has encouraged them to be so.
Leaving the US Treasury in control of with Exchange Stabilization Fund in the presence of an unregulated OTC derivative market with no congressional oversight is like leaving a pile of crack in the room of a drug addict. How can any secretary of the treasury, in seeking to give his president what he wants (low inflation, no recessions, etc), resist the temptation OTC derivatives offer when there is historical precedence to justify their use? After all, dealing with consequences of those OTC derivatives will be the problem of the next secretary of treasury.
On that note I want to look at what happened in the 1990s. The decade began with the apparent collapse of the financial system, as captured by the FDIC chart below showing new bank failures.
My reaction: I stumbled on this Fed transcript last night. I can’t believe the Federal Reserve published something so damning to itself!
1) The Federal Reserve sold options on repos in 1999 that totaled nearly $0.5 trillion of notional value.
2) According to the Federal Reserve’s website: The Fed historically has not engaged in forward or other derivative transactions. The Fed is lying!
3) Auctioning derivatives is something the Federal Reserve’s Trading Desk in 2003 already had experience doing.
4) In June 2003, The Federal Reserve was contemplating selling massive quantity of options sold to reduce risk premiums embedded in longer-term interest rates.
5) If the Federal Reserve did sell those options (and they probably did), the unwinding of the Fed’s derivative positions will likely be very disruptive and send yields sharply higher.
Conclusion: This is proof positive that the Federal Reserve has been abusing derivatives on a dangerous scale since at least 1999.
Wow. Where to start really...I'll just say this. The FRBNY has been trading 'options' or repos WAAAAYYYY before 1999. But I've got one big bit of news for you.
*** The don't do it on the Open Market. ***
You can deduce from there why the OP's entire rant above is moot.
If anyone is looking for someone to blame than blame the debt pushers themselves mostly the central bankers and there debt based monetary system and of course the central bank controled lawmakers too. When we get deep in the next stage of this crisis than maybe people will start to demand monetary system reform or this will likely turn into a breakdown crisis. Look at how much value our money has lost over the decades, we should not be penalized to use our own money system like this. Zero percent inflation should be the target rather than encouraging speculation fron the savers to avoid getting wiped out.
Yes... that's the first thing to came to mind here. Look at the overlap between the US Treasury Department and the major investment banks.
Look at lobbying efforts by these banks to influence laws and lawmakers. Look at financial industry contributions to legislators.
Taking the blame off of "bankers" and placing it on "the government" is simply disingenuous. That's like getting punched in the face then having the guy blame his fist for what happened. It's not a meaningful distinction.
As for the Tea Party... it would be great if they did hold a week of rallies and protests outside the offices of some of these major banks, in addition to certain federal agencies. That would send the right kind of message.
Unfortunately, bailout supporters such as Sarah Palin appear to be popular figures within that movement, and there is a distinct lack of focus on issues like tightening up regulation of banks, re-introducing elements of Glass-Steagall, and so on.
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