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More trouble today with Credit Suisse. Much like 15 years ago, we're dealing with the impact of an inverted curve that takes awhile, but ultimately pressures banks due to the run up in short term rates. Fed policy has to stop being so reactive. You can stress test all you want, but if backwards looking economists are running the Fed, they're bound to do something stupid.
With the wild swings in the money supply the last few years, it's become clear we need more stability in monetary policy. ZIRP+QE to 4.50+QT is not that. Banking does best with greater stability, especially in money supply growth, in rate setting, and with acknowledging the risks of inverted yield curves. Chasing their tails by responding to backwards looking CPI, PCE, and Unemployment reports needs to end with this fool Powell, who is now the Herbert Hoover of Fed history.
Give the dude a break, he has an impossible job: staving off an inevitable collapse of a radically over-leveraged economy.
Hey, he kept the balls in the air for 15 years. That's pretty impressive.
I love how everyone is like "didn't see that coming" when the banks start to collapse. Really? You didn't think that every mortgage-backed security getting a 30-year 2.5% loan by swarms of fly-by-night brokers was ever going to come back to bite us?
What's really fun is that we're looking at a government default at about the same time as a banking crisis. Forget bailing out the billionaires, I'm not so sure the FDIC insurance for mom and pop can stay solvent.
More trouble today with Credit Suisse. Much like 15 years ago, we're dealing with the impact of an inverted curve that takes awhile, but ultimately pressures banks due to the run up in short term rates. Fed policy has to stop being so reactive. You can stress test all you want, but if backwards looking economists are running the Fed, they're bound to do something stupid.
With the wild swings in the money supply the last few years, it's become clear we need more stability in monetary policy. ZIRP+QE to 4.50+QT is not that. Banking does best with greater stability, especially in money supply growth, in rate setting, and with acknowledging the risks of inverted yield curves. Chasing their tails by responding to backwards looking CPI, PCE, and Unemployment reports needs to end with this fool Powell, who is now the Herbert Hoover of Fed history.
I agree. I've heard people argue for years that banks were nothing but regulated utility like companies. If this is true, than how do we pin all the blame on the bankers? It's Fed policy that has led us to this so called bank crisis, but hasn't is been the Fed as regulators who have been telling the largest banks how to run their business?? The largest banks (who I believe are still very, very safe) have been running their operations in exactly the manner the Fed has told them to.
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