Why does her quote disqualify her? I see nothing particularly interesting or special in that quote...
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Janet Yellen vs Larry Summers
- Thread starter bwolinsky
- Start date
Quote from Martinghoul:
Why does her quote disqualify her? I see nothing particularly interesting or special in that quote...
What? Seriously?!
This is about as naive as it gets for someone who's in the Federal Reserve already?
It's not as stupid as Summers being quoted out of context by femlibs in the media because he noticed statistically only men wanted to really excel or only men excel at sciences and made a comment about it that makes him look overbearing towards women when he's probably not.
You still haven't actually answered the question... What is specifically wrong with her statement?Quote from bwolinsky:
What? Seriously?!
This is about as naive as it gets for someone who's in the Federal Reserve already?
It's not as stupid as Summers being quoted out of context by femlibs in the media because he noticed statistically only men wanted to really excel or only men excel at sciences and made a comment about it.
Quote from Martinghoul:
You still haven't actually answered the question... What is specifically wrong with her statement?
What's wrong with negative interest rates?
OK, besides the fact that this'll never happen through FOMC operations purposely or purposefully, this shows that she's suggesting that it should. It's such a dovish comment as to be hyperinflationary and while modest inflation is a dual mandate part to the Federal Reserve system the comment exemplifies an understanding of macroeconomics and international finance that is not suitable for any Federal Reserve Chairperson to espouse.
You want to know why? Too much of a dove will ignore the hardship faced by too much inflation; this'll ground the economy to a halt over the course of her tenure whereas Summers has a more aggressive stance on these issues and doesn't forget himself that it isn't possible to make investors pay the treasury just to hold treasuries which is what a negative interest rate environment would be.
Yellen appears to imply this is optimal in her comment here, when that is never the case, so I don't believe her knowledge about our economy is even as close to as great as Ben Bernanke's or Lawrence Summer's. It's easy to criticize somebody who has never been in a position to make a decision versus Yellen who might have influenced some of the decision makers to get the rates to the rock bottom they are now... she just wants a Jack Hammer Treasury Bond... treasuries become overvalued to the point of being worthless because they have no intrinsic value despite their bubbled price, so goes the dollar through the chasm, and practically every asset in it, especially real estate. Stocks and commodities rise which Wall Street will like, but the facts of life will continue to decimate the middle class and the majority of folks such as boomers who weren't faced with fiscal malfeasance <u>and</u> the combination of monetary instability and negligent approaches to arbitrating money supplies with FOMC ops.
Why won't it ever happen "through FOMC operations"? Do you have any evidence that negative rates are necessarily hyperinflationary? Finally, how does her comment exemplify a poor understanding of macroeconomics and international finance? Given that Milton Friedman said similar things in the past, would you argue that he also had a poor understanding of macroeconomics?Quote from bwolinsky:
What's wrong with negative interest rates?
OK, besides the fact that this'll never happen through FOMC operations, this shows that she's suggesting that it should. It's such a dovish comment as to be hyperinflationary and while modest inflation is a dual mandate part to the Federal Reserve system the comment exemplifies an understanding of macroeconomics and international finance that is not suitable for any Federal Reserve Chairperson to espouse.
Why do you assume that she is too much of a dove? What's "too much"? Why do you assume she will ignore too much inflation, given it's part of the mandate? And no, negative interest rates she was referring to don't necessarily imply that an investor will pay the treasury to hold treasury bonds. I would say that it's your understanding of macroeconomics and international finance that's rather lacking here...You want to know why? Too much of a dove will ignore the hardship faced by too much inflation; this'll ground the economy to a halt over the course of her tenure whereas Summers has a more aggressive stance on these issues and doesn't forget himself that it isn't possible to make investors pay the treasury just to hold treasuries which is what a negative interest rate environment would be.
Never optimal? Are you 100% sure about that?Yellen appears to imply this is optimal, when that is never the case, so I don't believe her knowledge about our economy is even as close to as great as Ben Bernanke's or Lawrence Summers. It's easy to criticize somebody who has never been in a position to make a decision versus Yellen who might have influenced some of the decision makers to get the rates to the rock bottom they are now.
Lawrence Summers is a the biggest defender of the status quo for the banking system out there. That means he fights even now to defeat TBTF reform, Glass-Steagall etc. No wonder one of the people who circulated the letter against him in Congress was Senator Sherrod Brown, who is actively trying to deal w/ the TBTF issue. The fact that you support Summers means that you're in favor of business as usual for the banks.
Quote from Martinghoul:
Why won't it ever happen "through FOMC operations"? Do you have any evidence that negative rates are necessarily hyperinflationary? Finally, how does her comment exemplify a poor understanding of macroeconomics and international finance? Given that Milton Friedman said similar things in the past, would you argue that he also had a poor understanding of macroeconomics?
Why do you assume that she is too much of a dove? What's "too much"? Why do you assume she will ignore too much inflation, given it's part of the mandate? And no, negative interest rates she was referring to don't necessarily imply that an investor will pay the treasury to hold treasury bonds. I would say that it's your understanding of macroeconomics and international finance that's rather lacking here...
Too much is a negative amortizing treasury bond. If she wants a negative amortizing bond then she won't be able to control inflation anyway. Negative yield to maturity has exactly zero return that will cost you money when it matures. No I'm not misunderstanding what she meant by this comment.
Never optimal? Are you 100% sure about that?
Lawrence Summers is a the biggest defender of the status quo for the banking system out there. That means he fights even now to defeat TBTF reform, Glass-Steagall etc. No wonder one of the people who circulated the letter against him in Congress was Senator Sherrod Brown, who is actively trying to deal w/ the TBTF issue. The fact that you support Summers means that you're in favor of business as usual for the banks.
Would you buy a security with 0 return? Why would you buy a security that cost money to own and won't return anything? I don't get it? This brought lawsuits to the MBS and CDO market where too much capital chasing yield caused debt auctions to fail so of course that's deflationary but what makes it hyperinflationary is that the FOMC should be rational enough not to let that happen, or else start selling bonds. The poor understanding and international finance is almost too dovish. Friedman hasn't ever suggested the need to have a negative amortizing treasury bond, so I'm not sure what similar things to Yellen's comment he has ever said! Friedman's views towards inflation and most economists have more to do with working within the system than about bringing optimality to it.
The reason he is (in support of the banking status quo) is because it is the wirehouses, that is, the brokerages and other financial institutions that have to work through banks that he defends them as do I because as part of their process of reform a lot of the fraud mostly had to do with a mix and matching that lead to a blood splatter of CDO and MBS that while protected in their financial engineering did not protect the security from going to zero because not every firm was honest about what they had underwritten and sold to the banks. When I say banks, I'm talking more about investment banks but all banks do have the potential for this, it's just that most of the banks had to deal with unethical scrupulous types of business transactions as with a CDO BBB+ rolled to a CDO AAA simply because there was one credit in there with put protection of a type that doesn't pay (when it underperforms) rather "reprices itself." If you were paid well to rate and purchase and trade these, then every aspect about the banks relationships regarding the purchases and trading of those instruments were assumed to be as fluid as any other liquid market but when they were found to reprice below bank's book value...this bankrupts everyone involved simply because the security is worthless, and if it happened to AAA CDO or MBS the process a AAA or AA+ US government T-bond has another problem with it that it doesn't just effect that security but the value of the entire economy. Yellen should not be allowed to make those decisions if this is her attitude about Obama's already unprecedented money printing and even if we could point to Obama as the cause of inflation the Federal Reserve does have the authority to raise rates and rather than them going on with whether to taper the bond purchase programs the real issue I have is that there might have to be more fluctuation in rates to something more in synch with the cycle rather than trying to build a cycle from a period of continually rising rates to a period of continually falling rates which causes the economic cycles we should be more worried about adjustment than continuing with the boom or bust so that if the Federal Reserve were to be "more nimble" as I think they'd be under Summers then the fluctuations in the economy that get blamed on by the President, Federal Reserve, and Federal Reserve chairman won't have to worry about whether to keep Wall Street informed about where interest rates are headed. Basically, right now, interest rates are either rising for years on end or falling for years on end. If they were "adjusted" rather than cycled, continual prosperity is possible but I don't think Yellen knows this.
I like doves, but this is too much. Wall Street loves her too because of the gender and dems get to appoint another "new appointee" who'd be the first female Federal Reserve Chairperson. It is political theatre in a way, but I believe Summers has better analytical skills than Yellen, who appears more as an Ivy League Trained Life Long Government Bureaucrat, than an Ivy League President and key Presidential Economic Advisor.
This poll is for 90 days.
Yellen's comment is just airhead to me, and reminds me of when I'm in my Senior Seminar class debating Comparative Economic Systems and having to ask a girl if she's communist for something she suggested (ie:living wages).
Summers has my vote but I realize Yellen has a large amount of support from democrats who want to look like they "changed" yet another thing by putting a female in that position even though there does appear to be about equal resume stats it's just this comment gets me to the point I'd thought I'd mention this quote taken from the National Inflation Association's youtube channel.
Negative yield to maturities produce negative returns, and she's suggesting selling bonds at those "rates."
I don't know why this isn't completely stupid to some people but I know she's been groomed in a way to take that over so as far as my commentary into either one of these two individuals' political views, my whole decision were I Obama would probably focus on the truthfulness of her attitudes towards her commitment of "modest inflation" versus "hyperinflation."
Yellen's comment is just airhead to me, and reminds me of when I'm in my Senior Seminar class debating Comparative Economic Systems and having to ask a girl if she's communist for something she suggested (ie:living wages).
Summers has my vote but I realize Yellen has a large amount of support from democrats who want to look like they "changed" yet another thing by putting a female in that position even though there does appear to be about equal resume stats it's just this comment gets me to the point I'd thought I'd mention this quote taken from the National Inflation Association's youtube channel.
Negative yield to maturities produce negative returns, and she's suggesting selling bonds at those "rates."
I don't know why this isn't completely stupid to some people but I know she's been groomed in a way to take that over so as far as my commentary into either one of these two individuals' political views, my whole decision were I Obama would probably focus on the truthfulness of her attitudes towards her commitment of "modest inflation" versus "hyperinflation."
Sure, i would buy such a security, assuming it provided me safety and protection against risks I felt were meaningful. Gold doesn't return anything and it costs money to own. And still people buy it, don't they? And no, Yellen is not talking about negative yields on bonds and neither did Milton Friedman. What Milton Friedman said had to do with optimal monetary policy at the zero nominal rate bound, which is exactly what Yellen is referring to in her comment. And, again, you still haven't told me why negative rates are "hyperinflationary".Quote from bwolinsky:
Would you buy a security with 0 return? Why would you buy a security that cost money to own and won't return anything? I don't get it? This brought lawsuits to the MBS and CDO market where too much capital chasing yield caused debt auctions to fail so of course that's deflationary but what makes it hyperinflationary is that the FOMC should be rational enough not to let that happen, or else start selling bonds. The poor understanding and international finance is almost too dovish. Friedman hasn't ever suggested the need to have a negative amortizing treasury bond, so I'm not sure what similar things to Yellen's comment he has ever said! Friedman's views towards inflation and most economists have more to do with working within the system than about bringing optimality to it.
Say what? You're not making any sense. Your statements above, whether it's due to the lack of paragraphs and punctuation, just don't parse. And please try to avoid talking about MBS and CDO markets. You know nothing about them.The reason he is (in support of the banking status quo) is because it is the wirehouses, that is, the brokerages and other financial institutions that have to work through banks that he defends them as do I because as part of their process of reform a lot of the fraud mostly had to do with a mix and matching that lead to a blood splatter of CDO and MBS that while protected in their financial engineering did not protect the security from going to zero because not every firm was honest about what they had underwritten and sold to the banks. When I say banks, I'm talking more about investment banks but all banks do have the potential for this, it's just that most of the banks had to deal with unethical scrupulous types of business transactions as with a CDO BBB+ rolled to a CDO AAA simply because there was one credit in there with put protection of a type that doesn't pay (when it underperforms) rather "reprices itself." If you were paid well to rate and purchase and trade these, then every aspect about the banks relationships regarding the purchases and trading of those instruments were assumed to be as fluid as any other liquid market but when they were found to reprice below bank's book value...this bankrupts everyone involved simply because the security is worthless, and if it happened to AAA CDO or MBS the process a AAA or AA+ US government T-bond has another problem with it that it doesn't just effect that security but the value of the entire economy. Yellen should not be allowed to make those decisions if this is her attitude about Obama's already unprecedented money printing and even if we could point to Obama as the cause of inflation the Federal Reserve does have the authority to raise rates and rather than them going on with whether to taper the bond purchase programs the real issue I have is that there might have to be more fluctuation in rates to something more in synch with the cycle rather than trying to build a cycle from a period of continually rising rates to a period of continually falling rates which causes the economic cycles we should be more worried about adjustment than continuing with the boom or bust so that if the Federal Reserve were to be "more nimble" as I think they'd be under Summers then the fluctuations in the economy that get blamed on by the President, Federal Reserve, and Federal Reserve chairman won't have to worry about whether to keep Wall Street informed about where interest rates are headed. Basically, right now, interest rates are either rising for years on end or falling for years on end. If they were "adjusted" rather than cycled, continual prosperity is possible but I don't think Yellen knows this.
No, Wall St doesn't love her. Wall St loves Summers, who has been consulting to several banks for years now. And yes, Yellen might be a life long bureaucrat, but that's a lot better than Rubinite Summers, who will make 100% certain that the banking system is not reformed. And, btw, your Ivy League president Summers did real wonders for Harvard when he was there. You might wanna look at how he insisted on "investing" 100% of the Harvard's liquid cash reserve in a nice carry trade and ended up losing $1.8bn of the endowment's money. Clearly, a man with a great understanding of macroeconomics and international finance!I like doves, but this is too much. Wall Street loves her too because of the gender and dems get to appoint another "new appointee" who'd be the first female Federal Reserve Chairperson. It is political theatre in a way, but I believe Summers has better analytical skills than Yellen, who appears more as an Ivy League Trained Life Long Government Bureaucrat, than an Ivy League President and key Presidential Economic Advisor.
Quote from Martinghoul:
Sure, i would buy such a security, assuming it provided me safety and protection against risks I felt were meaningful. Gold doesn't return anything and it costs money to own. And still people buy it, don't they? And no, Yellen is not talking about negative yields on bonds and neither did Milton Friedman. What Milton Friedman said had to do with optimal monetary policy at the zero nominal rate bound, which is exactly what Yellen is referring to in her comment. And, again, you still haven't told me why negative rates are "hyperinflationary".
Yellen is in no uncertain terms suggesting to take yields into negative territory and she "would be voting for that." Voting would imply preparation to sell bonds in FOMC ops and live dutch auction.
Your comprehension is what's at stake here and with what little I know about your alias, I removed you from ignore to engage this debate, so quit fucking insulting me.
Negative rates are hyperinflationary because they're so deflationary that they cause hyperinflation. I won't cost push IS LM to the top where inflation's so high that the price index is unaffordable to the majority of the country.
Deflation manifests after war when the hyperinflation happens.
Bonds are not commodities. This is a discussion on bonds and how they produce intrinsic value. There can be no value to a bond if it only pays its principal or you overpaid to the point that you have a negative yield and that means you are not receiving any return and even negative returns.
I get the need for the sake of safety for banks to lock them up into treasuries but there still must be value and the extent to which the Fed can keep doing this should be prolonged for as long as possible. If you put your banks assets safely into whatever negative yield spun you need this does cause deflation to the bank which in turn requires banks to raise more capital or charge more for their business, in which case you have hyperinflation so should we chat some more about why hyperinflation happens in a negative interest rate environment?
Quote from Martinghoul:
Say what? You're not making any sense. Your statements above, whether it's due to the lack of paragraphs and punctuation, just don't parse. And please try to avoid talking about MBS and CDO markets. You know nothing about them.
I do not claim to know a lot about them, but I have taken enough CFA curriculum material and live examinations to completely understand them, sir, and that was the gist of the explanation against reform, that brokerage iBanks were at fault, and banks that became iBanks or brokerages that became iBanks, not regional, for the lack of transparency in the origin of cash flows. Bureaucracy will never understand that market and you don't either. Summers does, and this is partially the amount of wind it would take to face a committee on the topic. Believe me, it'd be boring, and that's a very good explanation of the issues involved with reform in modern banking and quantitative finance.
Yes I had to type run-ons to keep all those thoughts together but it should make sense to you with the example of how one bank might trick another bank into thinking they might have upped their ratings somehow but the point you should take from it is that they would do that in-house, then go sell them once they were rated. This is not the bank's fault, sorry if I was unclear.
Quote from Martinghoul:
No, Wall St doesn't love her. Wall St loves Summers, who has been consulting to several banks for years now. And yes, Yellen might be a life long bureaucrat, but that's a lot better than Rubinite Summers, who will make 100% certain that the banking system is not reformed. And, btw, your Ivy League president Summers did real wonders for Harvard when he was there. You might wanna look at how he insisted on "investing" 100% of the Harvard's liquid cash reserve in a nice carry trade and ended up losing $1.8bn of the endowment's money. Clearly, a man with a great understanding of macroeconomics and international finance!
(I can't tell which Wall Street likes but Yellen's the frontrunner, I do know that).
I want no bureaucrats leading my nation. This is why I voted Romney, though bureaucrats do help during times of reform, the real status changes to the role they have in mind for Yellen is exactly the quote I gave in the first post. Hyperinflate the currency and keep bonds high, and, if you have to, put them into negative territory. Hyperinflation manifests as deflation, dollar drops, and the typical catastrophes financially will lead to other problems.
Whatever his carry trade was, he was probably one of several involved in the decision to do so.
Yellen never took a risk in her life like that, so this makes me more adamant that Summers at least has enough tactical response to things like flash crashes which are caused by threats to our national security and not to stupid electronic malfunctions.
You're making no sense whatsoever...
FOMC selling bonds in Dutch auctions, because of negative rates? Negative rates being hyperinflationary because they're deflationary?
BTW, you've been talking about your CFA studies for a while now? By now, you should be done with Level III. Have you passed any of the exams? Shall we test some of your "complete understanding" of MBS?
At any rate, you really have no clue what you're talking about and are just spouting off random terms in no particular order. This isn't the first time you do it, either. So you'd better put me back on ignore, 'cause I just can't respond to you in ways that won't appear offensive and derogatory to you. Sorry, but I have no other way to convey to you just how ignorant you sound.
FOMC selling bonds in Dutch auctions, because of negative rates? Negative rates being hyperinflationary because they're deflationary?
BTW, you've been talking about your CFA studies for a while now? By now, you should be done with Level III. Have you passed any of the exams? Shall we test some of your "complete understanding" of MBS?
At any rate, you really have no clue what you're talking about and are just spouting off random terms in no particular order. This isn't the first time you do it, either. So you'd better put me back on ignore, 'cause I just can't respond to you in ways that won't appear offensive and derogatory to you. Sorry, but I have no other way to convey to you just how ignorant you sound.