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Once again: how does the Fed have "control"? Fat white-haired men in pinstriped suits in a smoky room?
The job of public-sector influence is to enforce the rule of law, to assuage investors' fears about rampant mismanagement or dumb jolting from one novelty to another, to preclude (to the extent possible) fraud and cheating. Governments can (and should) intervene in catastrophic times, but their doing so, even in the best of circumstances, is no insurance against stock market collapse.
Why is there so much strident insistence of this Forum, that the Fed somehow "controls" the stock market?
The FED is a privet bank owned by the larger banks. The actions of the FED are limited by law. One of those laws require the FED to stop the markets from crashing. It looks like 15,000 on the DOW is what the FED is interpreting as crashing. Just saying.
Last edited by ContrarianEcon; 05-23-2016 at 12:59 PM..
One of those laws require the FED to stop the markets from crashing.
Nonsense. They have a directive to provide stability to the financial system but this encompasses things like being lender of last reserve, maintaining low inflation, etc. there is no law stating they are to stop the stock market from crashing.
Executive Order 12631 - Working Group on Financial Markets - Mar. 18, 1988; 53 FR 9421, 3 CFR, 1988 Comp., p. 559.
This is it.
Quote:
"By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee; (2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee; (3) the Chairman of the Securities and Exchange Commission, or his designee; and (4) the Chairman of the Commodity Futures Trading Commission, or her designee.
Section 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.
Section 3. Administration. (c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions."
They are required to keep the markets from crashing.
Nonsense. They have a directive to provide stability to the financial system but this encompasses things like being lender of last reserve, maintaining low inflation, etc. there is no law stating they are to stop the stock market from crashing.
That depends on how you read the presidential order, or how far you can stretch it.
A crash is far from orderly, so you can read orderliness to justify keeping the market from crashing.
I think it's a head fake when they claim 2-3 more rate hikes. At most is 1 more.
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