And the Nobel in Economics Goes To.....

[Toddsterpatriot]

What a smug liberal ass. If true sell your house and short the stock and real estate markets!!

I do realize you're the lib fool who wants to ban international trade so we have to grow our own bananas at 50 times the cost.

Smarter even : buy my mortgage from the bank , sell it to the fed as triple A asset and then default on it.
That's QE mostly.

Smarter even : buy my mortgage from the bank , sell it to the fed as triple A asset and then default on it.

They can't default on your mortgage, only you can do that.

That's what I meant. I've got the capital now ( as I sold the "asset" ) , now I can default on it.

You sold your own mortgage?
Please, explain how you did that.

 

[Toddsterpatriot]

The Fed publishes their holdings weekly.

You probably mean this :
FRB H.4.1 Release--Factors Affecting Reserve Balances--May 7 2015
How do we know how good are those bonds and mortgage backed securities ?

The bonds are US Treasuries and guaranteed MBS.
Don't get any better than that.

 

[CultureCitizen]

The bonds are US Treasuries and guaranteed MBS.

Guaranteed by what exactly ?

 

[CultureCitizen]

Ummm... not sure how that works... if you sold the asset and now own capital, how can you default on it? Isn't that asset now on someone else's balance sheet?

Exactly, the banks owned an asset (of unknown quallity , though Toddster claims they are top of the line MBS ) the bank now has turned its asset into capital. Now what happens with those assets ( if they get defaulted or not ) it is no longer the bankers concern, it is now the Fed's concern. Regarding the capital,yea, the banks have too keep some of it as reserves, but other than that they can do what they please with it.

 

[Toddsterpatriot]

The bonds are US Treasuries and guaranteed MBS.

Guaranteed by what exactly ?

Fannie and Freddie MBS are guaranteed by the US Treasury.

 

[Toddsterpatriot]

Ummm... not sure how that works... if you sold the asset and now own capital, how can you default on it? Isn't that asset now on someone else's balance sheet?

Exactly, the banks owned an asset (of unknown quallity , though Toddster claims they are top of the line MBS ) the bank now has turned its asset into capital. Now what happens with those assets ( if they get defaulted or not ) it is no longer the bankers concern, it is now the Fed's concern. Regarding the capital,yea, the banks have too keep some of it as reserves, but other than that they can do what they please with it.

the bank now has turned its asset into capital.

You are mistaken.

DEFINITION of 'Bank Capital' The difference between the value of a bank's assets and its liabilities. The bank capital represents the net worth of the bank or its value to investors.

They have turned a bond into cash.

 

[TC_Triple3]

The bonds are US Treasuries and guaranteed MBS.

Guaranteed by what exactly ?

Fannie and Freddie MBS are guaranteed by the US Treasury.

That's exactly what they purchased, and the FED had to amend their own Guidelines (at first temporarily, then permanently) to do it.

 

[Pksimon2007]

Ummm... not sure how that works... if you sold the asset and now own capital, how can you default on it? Isn't that asset now on someone else's balance sheet?

Exactly, the banks owned an asset (of unknown quallity , though Toddster claims they are top of the line MBS ) the bank now has turned its asset into capital. Now what happens with those assets ( if they get defaulted or not ) it is no longer the bankers concern, it is now the Fed's concern. Regarding the capital,yea, the banks have too keep some of it as reserves, but other than that they can do what they please with it.

the bank now has turned its asset into capital.

You are mistaken.

DEFINITION of 'Bank Capital' The difference between the value of a bank's assets and its liabilities. The bank capital represents the net worth of the bank or its value to investors.

They have turned a bond into cash.

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

 

[Toddsterpatriot]

Ummm... not sure how that works... if you sold the asset and now own capital, how can you default on it? Isn't that asset now on someone else's balance sheet?

Exactly, the banks owned an asset (of unknown quallity , though Toddster claims they are top of the line MBS ) the bank now has turned its asset into capital. Now what happens with those assets ( if they get defaulted or not ) it is no longer the bankers concern, it is now the Fed's concern. Regarding the capital,yea, the banks have too keep some of it as reserves, but other than that they can do what they please with it.

the bank now has turned its asset into capital.

You are mistaken.

DEFINITION of 'Bank Capital' The difference between the value of a bank's assets and its liabilities. The bank capital represents the net worth of the bank or its value to investors.

They have turned a bond into cash.

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

Perfectly correct to use either term.

 

[oldernwiser]

Ummm... not sure how that works... if you sold the asset and now own capital, how can you default on it? Isn't that asset now on someone else's balance sheet?

Exactly, the banks owned an asset (of unknown quallity , though Toddster claims they are top of the line MBS ) the bank now has turned its asset into capital. Now what happens with those assets ( if they get defaulted or not ) it is no longer the bankers concern, it is now the Fed's concern. Regarding the capital,yea, the banks have too keep some of it as reserves, but other than that they can do what they please with it.

the bank now has turned its asset into capital.

You are mistaken.

DEFINITION of 'Bank Capital' The difference between the value of a bank's assets and its liabilities. The bank capital represents the net worth of the bank or its value to investors.

They have turned a bond into cash.

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

Perfectly correct to use either term.

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

 

[Toddsterpatriot]

Ummm... not sure how that works... if you sold the asset and now own capital, how can you default on it? Isn't that asset now on someone else's balance sheet?

Exactly, the banks owned an asset (of unknown quallity , though Toddster claims they are top of the line MBS ) the bank now has turned its asset into capital. Now what happens with those assets ( if they get defaulted or not ) it is no longer the bankers concern, it is now the Fed's concern. Regarding the capital,yea, the banks have too keep some of it as reserves, but other than that they can do what they please with it.

the bank now has turned its asset into capital.

You are mistaken.

DEFINITION of 'Bank Capital' The difference between the value of a bank's assets and its liabilities. The bank capital represents the net worth of the bank or its value to investors.

They have turned a bond into cash.

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

Perfectly correct to use either term.

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

reserves.......cash
Not bonds.

 

[oldernwiser]

Exactly, the banks owned an asset (of unknown quallity , though Toddster claims they are top of the line MBS ) the bank now has turned its asset into capital. Now what happens with those assets ( if they get defaulted or not ) it is no longer the bankers concern, it is now the Fed's concern. Regarding the capital,yea, the banks have too keep some of it as reserves, but other than that they can do what they please with it.

the bank now has turned its asset into capital.

You are mistaken.

DEFINITION of 'Bank Capital' The difference between the value of a bank's assets and its liabilities. The bank capital represents the net worth of the bank or its value to investors.

They have turned a bond into cash.

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

Perfectly correct to use either term.

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

reserves.......cash
Not bonds.

OK, try reserves instead then. Either way I think you'd come home empty handed.

 

[Toddsterpatriot]

the bank now has turned its asset into capital.

You are mistaken.

DEFINITION of 'Bank Capital' The difference between the value of a bank's assets and its liabilities. The bank capital represents the net worth of the bank or its value to investors.

They have turned a bond into cash.

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

Perfectly correct to use either term.

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

reserves.......cash
Not bonds.

OK, try reserves instead then. Either way I think you'd come home empty handed.

My debit card and checkbook both involve reserves.
Mmmmm....toast and milk.

 

[oldernwiser]

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

Perfectly correct to use either term.

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

reserves.......cash
Not bonds.

OK, try reserves instead then. Either way I think you'd come home empty handed.

My debit card and checkbook both involve reserves.
Mmmmm....toast and milk.

One could also use the same logic with dollar bills. Personal "reserves" isn't quite the same thing.

Hmmm... still hungry and thirsty

 

[Pksimon2007]

- Reserves. QE is a swap of bonds for reserves. There is no cash in the deal.

Perfectly correct to use either term.

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

reserves.......cash
Not bonds.

OK, try reserves instead then. Either way I think you'd come home empty handed.

My debit card and checkbook both involve reserves.
Mmmmm....toast and milk.

- "Involve" reserves? You mean, in the general sense that all are part of the banking system? I don't even know what your intent is to say here anymore, Todd.

 

[Pksimon2007]

Perfectly correct to use either term.

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

reserves.......cash
Not bonds.

OK, try reserves instead then. Either way I think you'd come home empty handed.

My debit card and checkbook both involve reserves.
Mmmmm....toast and milk.

One could also use the same logic with dollar bills. Personal "reserves" isn't quite the same thing.

Hmmm... still hungry and thirsty

- Exactly.

Reserve has an intuitive definition of being the stuff kept in case of crisis.


It has an accounting definition as the recognition of a future or contingent liability which we don't yet want to count as capital.


But central bank reserves are a different - and very badly named - animal entirely. They aren't reserves at all, but are only settlement funds for interbank payments. The limit of their lending is, as you suggested, in the fed funds market.

 

[EdwardBaiamonte]

What a smug liberal ass. If true sell your house and short the stock and real estate markets!!

I do realize you're the lib fool who wants to ban international trade so we have to grow our own bananas at 50 times the cost.

Smarter even : buy my mortgage from the bank , sell it to the fed as triple A asset and then default on it.
That's QE mostly.

Smarter even : buy my mortgage from the bank , sell it to the fed as triple A asset and then default on it.

They can't default on your mortgage, only you can do that.

That's what I meant. I've got the capital now ( as I sold the "asset" ) , now I can default on it.

More importantly,
1) QE was part of the monetary policy that prevented Depression.
2) Culturalarse has no better monetary solution better than Friedman and Bernanke.
3) QE generally will make money since real estate has real value and prices are up now from low point.

See why we are positive that liberalism is based in pure ignorance?

 

[EdwardBaiamonte]

Really, next time you go to the store to buy a loaf of bread and a gallon of milk try paying with bonds.

reserves.......cash
Not bonds.

OK, try reserves instead then. Either way I think you'd come home empty handed.

My debit card and checkbook both involve reserves.
Mmmmm....toast and milk.

One could also use the same logic with dollar bills. Personal "reserves" isn't quite the same thing.

Hmmm... still hungry and thirsty

- Exactly.

Reserve has an intuitive definition of being the stuff kept in case of crisis.


It has an accounting definition as the recognition of a future or contingent liability which we don't yet want to count as capital.


But central bank reserves are a different - and very badly named - animal entirely. They aren't reserves at all, but are only settlement funds for interbank payments. The limit of their lending is, as you suggested, in the fed funds market.

dear, most significantly the Fed controls reserves to prevent inflation and deflation so that the economy can steadily grow based on accurate price signals from the market place.

Does the liberal have the IQ to understand?

 

[Pksimon2007]

reserves.......cash
Not bonds.

OK, try reserves instead then. Either way I think you'd come home empty handed.

My debit card and checkbook both involve reserves.
Mmmmm....toast and milk.

One could also use the same logic with dollar bills. Personal "reserves" isn't quite the same thing.

Hmmm... still hungry and thirsty

- Exactly.

Reserve has an intuitive definition of being the stuff kept in case of crisis.


It has an accounting definition as the recognition of a future or contingent liability which we don't yet want to count as capital.


But central bank reserves are a different - and very badly named - animal entirely. They aren't reserves at all, but are only settlement funds for interbank payments. The limit of their lending is, as you suggested, in the fed funds market.

dear, most significantly the Fed controls reserves to prevent inflation and deflation so that the economy can steadily grow based on accurate price signals from the market place.

Does the liberal have the IQ to understand?

- I see you've been paying attention in my class.

 

[CultureCitizen]

What a smug liberal ass. If true sell your house and short the stock and real estate markets!!

I do realize you're the lib fool who wants to ban international trade so we have to grow our own bananas at 50 times the cost.

Smarter even : buy my mortgage from the bank , sell it to the fed as triple A asset and then default on it.
That's QE mostly.

Smarter even : buy my mortgage from the bank , sell it to the fed as triple A asset and then default on it.

They can't default on your mortgage, only you can do that.

That's what I meant. I've got the capital now ( as I sold the "asset" ) , now I can default on it.

More importantly,
1) QE was part of the monetary policy that prevented Depression.
2) Culturalarse has no better monetary solution better than Friedman and Bernanke.
3) QE generally will make money since real estate has real value and prices are up now from low point.

See why we are positive that liberalism is based in pure ignorance?

I do not allways agree with economist from the Austrian school, and tend to agree with the view points of keynessian economics.
But , in this case I can certainly see why they think QE was a mistake.There was another solution and we've already discussed it, so I am not going to discuss it again.