Former Fed QE guy Confesses, Apologizes: "I Can Only Say: I'm Sorry, America."

[Safilo]

Quote from drownpruf:

You mean the warrants issued to the treasury under TARP, which was enacted under the EESA of 2008 which passed the House and Senate as HR 1424 and was signed into law by GW Bush in October of 2008.

You are w/o a doubt the dumbest mofo alive. Seriously dude, just stop f*cking typing.

Yes, Bush created TARP but be had nothing to do with its most recent implementation - that was all done under obama and his administration.

Let me re-iterate that obama took equity positions ALL of the banks using TARP funds, regardless of whether or not they needed/wanted the money. He did not buy the toxic assets; he bought into the banks themselves.

The left wing nutsacks, as you seem to be, were behind the whole "occupy wall st" movement as a way of adding some moral justification to their actions...did you read that load-of-crap anti-capitalism article on business insider (another left wing propaganda mill) about how the American dream is accessibility into the top 0.5% income bracket, and that fact that most people never make it there is proof that "our system is broken"? lol What next, we need to have at 1 in 2 chance to win the lottery for everyone who buys a ticket, else it's not fair and is broken?

Quote from jem:

QE and all the other govt and private FED bank intervention...probably short circuited what probably would have been a quick and cleansing reset.

That's what would have happened and that would have been better for the US in the long term...but it would have been political suicide for obama.

Quote from Martinghoul:

Huh? Obama? As noted in another post, this is really a very bizarre thing to say...

Well, you initially made some statements which I found strange, so I was asking you about them. As to money having value, seems like it does to me. I can buy stuff with money. If that ain't your definition of "value", you might need to narrow it down for me.

Where is the money deriving its value from?

Money itself has no value. People used to pay for things by bartering services or trading goods. Money came into play as a mutually accepted IOU and that's where it derives its value. The original intent was not for currency to replace bartering or trading outright; it was to act as a temporary placeholder that says you'll be compensated at a later time for a value equal to the money you were given. As more people put their faith in currency, along with government "backing" increasing confidence, it became acceptable for people to transact exclusively with currency rather than real goods or services (items that have intrinsic value).

Money you spend is you taking on debt. When you "buy stuff with money" you are only able to do that because of this mutual faith in the particular currency. The expectation that a person has by accepting your currency payment is that the money he accepted represents the value of goods/services he provided to you, and that he can use the currency to rectify your debt to him by spending it elsewhere.

Money you receive as payment is debt someone else owes you. You expect that the money you are paid represents a specific value, and that you can use said money to redeem goods/services equal to its representative value from any other person and not just the person who originally paid you, thus enabling you to rectify the debt owed to you without having to rely exclusively on the person who paid you.

Money you spend is you going into debt for the amount you spent.
Money you receive is you accepting debt for the amount you are paid.

Your ability to participate in commerce exclusively using currency and never relying on the transfer of goods or services is a function of a mutual belief in said currency - nothing more and nothing less.

Taking what you learned here today, apply this concept to the stock market as it is today and see if you can spot any problems with respect to where the market is.

 

[drownpruf]

Quote from Safilo:

Yes, Bush created TARP but be had nothing to do with its most recent implementation - that was all done under obama and his administration.

Let me re-iterate that obama took equity positions ALL of the banks using TARP funds, regardless of whether or not they needed/wanted the money. He did not buy the toxic assets; he bought into the banks themselves.

The left wing nutsacks, as you seem to be, were behind the whole "occupy wall st" movement as a way of adding some moral justification to their actions...did you read that load-of-crap anti-capitalism article on business insider (another left wing propaganda mill) about how the American dream is accessibility into the top 0.5% income bracket, and that fact that most people never make it there is proof that "our system is broken"? lol What next, we need to have at 1 in 2 chance to win the lottery for everyone who buys a ticket, else it's not fair and is broken?



That's what would have happened and that would have been better for the US in the long term...but it would have been political suicide for obama.



Where is the money deriving its value from?

Money itself has no value. People used to pay for things by bartering services or trading goods. Money came into play as a mutually accepted IOU and that's where it derives its value. The original intent was not for currency to replace bartering or trading outright; it was to act as a temporary placeholder that says you'll be compensated at a later time for a value equal to the money you were given. As more people put their faith in currency, along with government "backing" increasing confidence, it became acceptable for people to transact exclusively with currency rather than real goods or services (items that have intrinsic value).

Money you spend is you taking on debt. When you "buy stuff with money" you are only able to do that because of this mutual faith in the particular currency. The expectation that a person has by accepting your currency payment is that the money he accepted represents the value of goods/services he provided to you, and that he can use the currency to rectify your debt to him by spending it elsewhere.

Money you receive as payment is debt someone else owes you. You expect that the money you are paid represents a specific value, and that you can use said money to redeem goods/services equal to its representative value from any other person and not just the person who originally paid you, thus enabling you to rectify the debt owed to you without having to rely exclusively on the person who paid you.

Money you spend is you going into debt for the amount you spent.
Money you receive is you accepting debt for the amount you are paid.

Your ability to participate in commerce exclusively using currency and never relying on the transfer of goods or services is a function of a mutual belief in said currency - nothing more and nothing less.

Taking what you learned here today, apply this concept to the stock market as it is today and see if you can spot any problems with respect to where the market is.

Dude, stop trying to spin your mistakes. TARP was actually reduced to $475B under Dodd-Frank during Obama's admin. The equity stakes (warrants) were actually reduced in scale (from the initial EESA 08 levels) due to the DF impact, and during Obama's first term.

Quote from Safilo:

Secondly, the obama admin did not buy the toxic assets, instead they took an ownership stake in the banks themselves. This is a pretty basic play out of the "how to build a left-wing dictatorship playbook" - gain control of the country's wealth and banking system, thus controlling who gets money and for what without having to go to congress.

So tell us again how "they" circumvented Congress? Hmm? The Bush administration (Paulson) wrote EESA 08. It was HR 1424 which passed both houses and was signed by Bush, you turd. Only to be reduced in size and scope due to Dodd-Frank.

You are a comical f*ckup. Please continue to spin how they "didn't go to Congress" and that Obama signed off on EESA and the warrants.

 

[Safilo]

Quote from drownpruf:

Dude, stop trying to spin your mistakes. TARP was actually reduced to $475B under Dodd-Frank during Obama's admin. The equity stakes (warrants) were actually reduced in scale (from the initial EESA 08 levels) due to the DF impact, and during Obama's first term.

What am I "spinning"? Are you denying that under obama the fed took equity positions in banks regardless of whether or not they wanted "assistance" or are you simply trying to play down the fact that this is a classic bloated government play for power? You do realize that TARP funds were not allocated so that the government could participate in the stock market as an investor...or is that tidbit of fact also eluding you?

Hey, to be fair, I'm willing to concede that some or even most of that may not have been obama's idea. In fact, he probably just rubber-stamped it without actually knowing the implications...but it doesn't change the fact that the US economy and, to a degree, the global economy is suffering for it and this is all going down on his watch.

So tell us again how "they" circumvented Congress? Hmm? The Bush administration (Paulson) wrote EESA 08. It was HR 1424 which passed both houses and was signed by Bush, you turd. Only to be reduced in size and scope due to Dodd-Frank.

If your strategy is to "blame it on Bush" you may just want to give up because it's not working.

Congress' primary role is to manage government spending, which includes approving and disapproving funding for programs that obama may want to put into play. Misusing TARP funds and taking an ownership stake in the banks is one way to get around congressional approval, but that wasn't the extent. The obama admin sought to coerce funding for projects they wanted to have happen from said banks...fail projects like the "green economy" (which you are probably heavily vested in on your DerpTrade account) continue to receive funding.

Tesla, which builds cars nobody wants, gets nearly $40K in taxpayer subsidies for each car they sell ON TOP of the $7.5K in tax credits people get for buying an electric car. Just an example, but I'm sure you already knew this. Clearly a car company that's perpetually on the verge of going belly-up and is sustained almost entirely on welfare justifies share prices >$150 - I wonder how that's happening. GM isn't quite as bad as Tesla but the US taxpayers are still the proud owners of ~4% of the company.

You are a comical f*ckup. Please continue to spin how they "didn't go to Congress" and that Obama signed off on EESA and the warrants.

You might want to work on your reading comprehension there, brah. Am I using words that are too big for you or am I not including enough jargon for your tastes? That must make you mad.

 

[drownpruf]

Quote from Safilo:

Are you denying that under obama the fed took equity positions in banks?

Denying that banks took money under EESA while Obama was in office? Of course not. It was the implementation of HR 1424 passed by Congress and signed by George Bush. The Obama inauguration was three months later.

Quote from Safilo:

If your strategy is to "blame it on Bush" you may just want to give up because it's not working.

No, nothing against Bush. My strategy is to expose you as the moron that you are, but truth be told, it wasn't necessary.

 

[brokerboy]

are you suggesting basic employees with a pension plan will benefit off the raise of the stock market anything near a top executive or the richest top 2%? why does walmart keep warning about earnings than?

Quote from Martinghoul:

So, basically, you're suggesting that QE has helped corporate America, as well as various shareholders, such as employees who had been partly paid in shares, pension plans etc?

 

[jsp326]

Quote from Martinghoul:

So, basically, you're suggesting that QE has helped corporate America, as well as various shareholders, such as employees who had been partly paid in shares, pension plans etc?

Define "help." In what way? At what cost? In what time horizon -- short-term, mid- or long-term or what? It's funny how many people with advanced degrees can't make basic distinctions or spot fallacious thinking.

 

[Martinghoul]

Quote from brokerboy:
are you suggesting basic employees with a pension plan will benefit off the raise of the stock market anything near a top executive or the richest top 2%? why does walmart keep warning about earnings than?

I am not suggesting anything of the sort. I have made no claim about who benefited more or less. I only wondered whether your statement meant that a broad class of people who are, in some shape or form, invested in the stock mkt benefited. It wasn't a statement, but rather a question.

Quote from jsp326:
Define "help." In what way? At what cost? In what time horizon -- short-term, mid- or long-term or what? It's funny how many people with advanced degrees can't make basic distinctions or spot fallacious thinking.

Again, pls see above. I am asking the question, rather than making a statement.

 

[Martinghoul]

Quote from Safilo:
Yes, Bush created TARP but be had nothing to do with its most recent implementation - that was all done under obama and his administration.

Let me re-iterate that obama took equity positions ALL of the banks using TARP funds, regardless of whether or not they needed/wanted the money. He did not buy the toxic assets; he bought into the banks themselves.

You have gone "full retard" here, my friend. Again, as atti has pointed out, you're bringing politics into this discussion for no good reason whatsoever. So let me just set you straight here. What you're referring to here is the TARP CPP (Capital Purchase Program), which consisted of the US Treasury Dept injecting capital into banks in exch for equity, debt and a hybrid of the two (warrantes). 2/3rds of the TARP CPP funds were disbursed to the banks by Jan 2009.

Where is the money deriving its value from?

Money itself has no value. People used to pay for things by bartering services or trading goods. Money came into play as a mutually accepted IOU and that's where it derives its value. The original intent was not for currency to replace bartering or trading outright; it was to act as a temporary placeholder that says you'll be compensated at a later time for a value equal to the money you were given. As more people put their faith in currency, along with government "backing" increasing confidence, it became acceptable for people to transact exclusively with currency rather than real goods or services (items that have intrinsic value).

Money you spend is you taking on debt. When you "buy stuff with money" you are only able to do that because of this mutual faith in the particular currency. The expectation that a person has by accepting your currency payment is that the money he accepted represents the value of goods/services he provided to you, and that he can use the currency to rectify your debt to him by spending it elsewhere.

Money you receive as payment is debt someone else owes you. You expect that the money you are paid represents a specific value, and that you can use said money to redeem goods/services equal to its representative value from any other person and not just the person who originally paid you, thus enabling you to rectify the debt owed to you without having to rely exclusively on the person who paid you.

Money you spend is you going into debt for the amount you spent.
Money you receive is you accepting debt for the amount you are paid.

Your ability to participate in commerce exclusively using currency and never relying on the transfer of goods or services is a function of a mutual belief in said currency - nothing more and nothing less.

Taking what you learned here today, apply this concept to the stock market as it is today and see if you can spot any problems with respect to where the market is.

Erm, no. You got this wrong, but, honestly, I lack the will to talk about this with you. It's a waste of time, so I will just disagree with you and leave it at that.

 

[Martinghoul]

Quote from eurusdzn:
As to the hedge and proxy volatility suggestion i guess i mean two, yet not entirely seperate things.

It shouldnt be this way but it has been for five years now that in a rising stock market , US T- notes and bonds have also risen together. Stocks and T's , for 5 years have been been positively correlated so that long SP500 and long US treasuries as a somewhat spread trade have provided some market neutrality
and a smooth equity curve. Havent plotted these two together for a while but it was a smooth equity curve prior to taper fears and sould have resumed as of late.
I guess it has been like having your cake and eating it as well where in rare crisis times you have your hedge a correlation goes quite negative and in most other times both legs of the longs are making money as correlation is positive.

The neutrality is also somewhat supported by bonds being bid on daily run of the mill
poor economic stats where stocks will be sold and bonds bid , however, that is hard to measure for me in the "good is bad and bad is good times we are in."

Finally, and not at all seperate from above is the "flight to quality" . The strong bid in US treasuries diring crisis may be a reasonable proxy for a long volatility trade as risk sells off.
Despite any naysayers of the quality of the US issued paper and the US dollar i bet that "old ways" will prevail next time as well during crisis. I will want to be long Treasuries.

Hope that clarifies , somewhat, my previous post.I really just mean that long both stocks and bonds veiwed as one position has been a good trade for years .Any comments welcome.

I agree and this is an interesting phenomenon. Some people, most notably Ray Dalio and Bridgewater's "risk parity" method, have made a LOT of money on this. How long will it persist and is it really true that "it shouldn't be this way" (the original Fed model which the negative correlation is based on a lot of questionable assumptions)?

 

[Safilo]

Quote from Martinghoul:

You have gone "full retard" here, my friend. Again, as atti has pointed out, you're bringing politics into this discussion for no good reason whatsoever. So let me just set you straight here. What you're referring to here is the TARP CPP (Capital Purchase Program), which consisted of the US Treasury Dept injecting capital into banks in exch for equity, debt and a hybrid of the two (warrantes). 2/3rds of the TARP CPP funds were disbursed to the banks by Jan 2009.

QE and what transpired during the bailouts was almost exclusively, if not entirely, a political decision. We have a process called bankruptcy that exists for companies that have become insolvent.

TARP was not created for the purpose of taking equity positions in banks or any other companies, no did all of the banks that received TARP funds want or need them. It was created to buy toxic assets in an effort to maintain market stability - again, interference I don't agree with. The toxic assets only exist because dipsh1ts like you exist.

Erm, no. You got this wrong, but, honestly, I lack the will to talk about this with you. It's a waste of time, so I will just disagree with you and leave it at that.

No, what I said is entirely correct. You got pwned by facts, again. Thanks for playing.