House Republicans Accuse Fed of Conspiracy Against the Poor

[LA RAM FAN]

"Royce is clearly on to something. When the stock market tanks, the share prices of the big Wall Street banks plummet to a greater degree than the overall market because of the trillions of dollars (yes trillions) in derivatives they hold and the lack of transparency as to whether the counterparties on the other side of these trades will be solvent in a plummeting market."
Wall Street On Parade

I just placed a $5 bet on a Cubs game.

My bet (derivative) has a notional value of $2.5 billion. Should I worry?

I hope so.

Why would $5 make me worry?

Cubs are born losers.

yeah they'll choke in the NL championship game against the Giants.

 

[LA RAM FAN]

"Yesterday, four Republicans on the House Financial Services Committee, during the semi-annual monetary policy testimony by Fed Chair Janet Yellen, presented a persuasive argument that it’s really the Federal Reserve (which was flattered by many House Democrats at the hearing) that’s sacrificing the poor and middle class in order to benefit the rich and 'the Goldman Sachs CEOs of the world.'”

"Congressman Ed Royce, Republican from California, said that he was 'concerned that the Federal Reserve has created a third pillar of monetary policy, that of a rising and stable stock market.'

"Royce said that Yellen’s predecessor, Fed Chair Ben Bernanke, had told the Committee that the goal of quantitative easing was to increase asset prices like the stock market in order to create a wealth effect.

"Royce raised the specter that the Fed is actually being held hostage by the stock market and Wall Street, stating:

“'Every time in the last three years when there has been a hint of raising rates and the stock market declined accordingly, the Fed has cited stock market volatility as one of the reasons to stay the course and hold rates at zero.'”
Wall Street On Parade
Is Royce on to something?
Allegedly, the Fed's two primary pillars of monetary policy are to promote maximum employment and stable prices.
Yellen appears to support a third pillar underpinning the stock market.
What would Trump and Hillary say?

george you been gone a while.i see you're back.good op.

Thanks, 911.
I missed the abuse, I guess.

check your PM box.

 

[jc456]

"Royce is clearly on to something. When the stock market tanks, the share prices of the big Wall Street banks plummet to a greater degree than the overall market because of the trillions of dollars (yes trillions) in derivatives they hold and the lack of transparency as to whether the counterparties on the other side of these trades will be solvent in a plummeting market."
Wall Street On Parade

I just placed a $5 bet on a Cubs game.

My bet (derivative) has a notional value of $2.5 billion. Should I worry?

I hope so.

Why would $5 make me worry?

Cubs are born losers.

Best record in baseball.

what's that got to do with anything, how long since their last championship? Are you saying because they have a better record today then the rest of baseball they deserve something?

I don't even think it's a good bet today since vegas has them as the best team. $5 to get $2.5 Mil? just doesn't mean anything today. And that five is most likely spent.

 

[Toddsterpatriot]

I just placed a $5 bet on a Cubs game.

My bet (derivative) has a notional value of $2.5 billion. Should I worry?

I hope so.

Why would $5 make me worry?

Cubs are born losers.

Best record in baseball.

what's that got to do with anything, how long since their last championship? Are you saying because they have a better record today then the rest of baseball they deserve something?

I don't even think it's a good bet today since vegas has them as the best team. $5 to get $2.5 Mil? just doesn't mean anything today. And that five is most likely spent.

what's that got to do with anything,

That's how they're doing this year.

how long since their last championship?

1908.

Are you saying because they have a better record today then the rest of baseball they deserve something?

No.

I don't even think it's a good bet today since vegas has them as the best team

Don't bet on them then.

$5 to get $2.5 Mil?

Actual money at risk for my bet versus the nominal value of the bet.

 

[georgephillip]

It's your $5.

But the notional value is $2.5 billion.
Like the notional number in your graphic is $516 trillion.

What's your point?

Loser

The point is, $516 trillion is an inaccurate number. Wildly so.

But it does scare the idiots.

Would you like to explain why "idiots" shouldn't fear rich FIRE sector parasites engaging in speculative economic practices that are likely to crash the productive economy and require large taxpayer bailouts again?

The crash and bailout wasn't because some traded derivatives.
It was because of a real estate bubble.
A bubble worsened by government policies pushing banks to make loans to riskier borrowers.
A bubble worsened by government policies pushing Fannie and Freddie to buy more of these risky loans.

Subprime mortgage crisis - Wikipedia, the free encyclopedia
"Boom and collapse of the shadow banking system[edit]

"Comparison of the growth of traditional banking and shadow banking[128]

"The Financial Crisis Inquiry Commission reported in January 2011:

"'In the early part of the 20th century, we erected a series of protections – the Federal Reserve as a lender of last resort, federal deposit insurance, ample regulations – to provide a bulwark against the panics that had regularly plagued America’s banking system in the 20th century.'

"Yet, over the past 30-plus years, we permitted the growth of a shadow banking system – opaque and laden with short term debt – that rivaled the size of the traditional banking system. Key components of the market – for example, the multitrillion-dollar repo lending market, off-balance-sheet entities, and the use of over-the-counter derivatives – were hidden from view, without the protections we had constructed to prevent financial meltdowns.

"We had a 21st-century financial system with 19th-century safeguards."
Are you $afely hedged against the next example of Wall $treet's fraud model?

 

[Toddsterpatriot]

But the notional value is $2.5 billion.
Like the notional number in your graphic is $516 trillion.

What's your point?

Loser

The point is, $516 trillion is an inaccurate number. Wildly so.

But it does scare the idiots.

Would you like to explain why "idiots" shouldn't fear rich FIRE sector parasites engaging in speculative economic practices that are likely to crash the productive economy and require large taxpayer bailouts again?

The crash and bailout wasn't because some traded derivatives.
It was because of a real estate bubble.
A bubble worsened by government policies pushing banks to make loans to riskier borrowers.
A bubble worsened by government policies pushing Fannie and Freddie to buy more of these risky loans.

Subprime mortgage crisis - Wikipedia, the free encyclopedia
"Boom and collapse of the shadow banking system[edit]

"Comparison of the growth of traditional banking and shadow banking[128]

"The Financial Crisis Inquiry Commission reported in January 2011:

"'In the early part of the 20th century, we erected a series of protections – the Federal Reserve as a lender of last resort, federal deposit insurance, ample regulations – to provide a bulwark against the panics that had regularly plagued America’s banking system in the 20th century.'

"Yet, over the past 30-plus years, we permitted the growth of a shadow banking system – opaque and laden with short term debt – that rivaled the size of the traditional banking system. Key components of the market – for example, the multitrillion-dollar repo lending market, off-balance-sheet entities, and the use of over-the-counter derivatives – were hidden from view, without the protections we had constructed to prevent financial meltdowns.

"We had a 21st-century financial system with 19th-century safeguards."
Are you $afely hedged against the next example of Wall $treet's fraud model?

There were many causes of the crisis, with commentators assigning different levels of blame to financial institutions, regulators, credit agencies, government housing policies, and consumers, among others.[5] A proximate cause was the rise in subprime lending. The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006, with much higher ratios in some parts of the U.S.[6][7] A high percentage of these subprime mortgages, over 80% in 2006 for example, were adjustable-rate mortgages.[4]