Janet Yellen vs Larry Summers

[zanek]

BWolinksy: You lost any credibility by actually suggesting Summers.

Larry Summers was a key player in the housing/financial crisis and here you are arguing to have him hired again. Seriously ? WTF are you smoking ? This guy shouldnt be allowed anywhere near any public office or private that deals with finances.

I'll just leave this here:
"Soon after that, Summers lost his job as president of Harvard after suggesting that women might be innately inferior to men at scientific work. "


" As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws."

http://chronicle.com/article/Larry-Summersthe/124790/

 

[bwolinsky]

Quote from zanek:

BWolinksy: You lost any credibility by actually suggesting Summers.

Larry Summers was a key player in the housing/financial crisis and here you are arguing to have him hired again. Seriously ? WTF are you smoking ? This guy shouldnt be allowed anywhere near any public office or private that deals with finances.

I'll just leave this here:
"Soon after that, Summers lost his job as president of Harvard after suggesting that women might be innately inferior to men at scientific work. "


" As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws."

http://chronicle.com/article/Larry-Summersthe/124790/

(With regard to women in science I've noticed this, too, statistically though).

Good to repeal Glass-Steagall, no problem letting business merge when it has to and wants to.

Yeah, and good to prevent derivative regulation and bad that the Fed sought to save inefficient companies thereafter. That regulation would not have prevented this measure from appearing to have affected his ability to do his job for Clinton. The CFTC wasn't responsible for losing trades and neither were any of the tax payers, so that measure would have been seen as a benefit rather than the problem if the Fed didn't bail out Wall Street as they should not have.

Of course those derivatives are not games but derive value from financial transactions beyond the scope of merely blaming large losing trades for decimating Wall Street.

You are presenting this article as if it is damming finality to Summers when it actually appears to have been the right calls and if the purpose of those deregs were actually followed through there would be no issue I think with where the dollar's at, or how fiscally imbalanced from those bail outs we are. He or the policies he implemented would not be the cause of blame.

When you say deregulation causes someone to lose money, that's blaming the system and not the greedy impetus that made you put those trades on in the first place but if a lawyer tells you that's what happened of course we'll blame the legislator when the logic is completely false!

Thanks for sharing that article. It only shows why the country does not understand Macroeconomics or International Finance. It presents Summers as if he's in the wrong, when it makes him look good to me, because overregulation would have prevented growth and the only subjugation to him is that he got regulations lifted that were an impediment to business, and unfortunately people can and do lose all the time in the market, so to blame a legislative action like deregulation when people get too greedy is exactly the reason I'd still support him.

Those are all good things, and no complaints here. It's funny that that author thinks that that makes Summers look bad but to the educated in such things understanding that bad trades lose money is as much a part of our economy as any success.

PS: Yellen's views are largely confined to the Fed, so when quotes like the one in the OP make it out and through organizations like the National Inflation Assocation they are not taken with a grain of salt, but largely should be analyzed for their significance to the future...ahem, <b>to <u>our</u> future.</b>

 

[5to12]

Anyway, earlier on, this --

''Bonds are not commodities. This is a discussion on bonds and how they produce intrinsic value.''

Actually in the old, more complete, relationship, bonds are commodities but - as fictitious capital - absolutely unproductive; relying upon value created in the -real economy- they are derivative and have no intrinsic value. Their value depends upon both avg. rate of profit and mass of profite which they happen to be a -claim- upon.

Of course nowadays there is also dependence upon fiscal crisis of state, debt and deficit financing, 'lets pretend profits' created by a consumption 'based' econ filled with unproductive labor.

Uh yeah, we have some definite problems way beyond the Larry and Jannet Spectacle.

A Su Servicio
Juan

 

[riddler]

They are both jewish.
One is a boy and the other is a girl
I would just flip a coin on this one guys.

 

[Tsing Tao]

Quote from zanek:

BWolinksy: You lost any credibility by actually suggesting Summers.

I don't think BWolinsky suggested anyone that wasn't already suggested by the President. It's a choice between two shitty options, and you try to pick the least shitty one.

 

[5to12]

Quote from bwolinsky:

No, <u>we pay the government to buy treasuries.</u> (Yes, way better than a toaster if you're lending to me, bank pays me to take out a loan).

Money Center Banks have been paid 25 bps for years now -- ''free'' money reflux w/guaranteed 0.25 payment every cycle -- and yeah, we pay [even while this reduces bank pressure to lend,,,,Main St loves it, No]

 

[5to12]

Quote from Martinghoul:

Negative rates have nothing to do with treasuries... It's about short rates and, more specifically, IOER. Several countries have done this in the past and Denmark has them in place even now.

Or rate of inflation greater than rate of interest -- U.S. had negative int. rates for a period during early 1980s [and likely other times as well]. Nothing tricky about it.

 

[5to12]

Quote from zanek:

BWolinksy: You lost any credibility by actually suggesting Summers.

Larry Summers was a key player in the housing/financial crisis and here you are arguing to have him hired again. Seriously ? WTF are you smoking ? This guy shouldnt be allowed anywhere near any public office or private that deals with finances.

I'll just leave this here:
"Soon after that, Summers lost his job as president of Harvard after suggesting that women might be innately inferior to men at scientific work. "


" As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws."

http://chronicle.com/article/Larry-Summersthe/124790/

Actually, I think the Gramms [plural] had more to do with the CFMA than Summers -- chk out Sen. Gramm's wife's positions/activities.

 

[bwolinsky]

Quote from 5to12:

Or rate of inflation greater than rate of interest -- U.S. had negative int. rates for a period during early 1980s [and likely other times as well]. Nothing tricky about it.

Ok, I'll re-emphasize, compadre:

Yellen is saying that treasuries should be taken into negative territory.

That is YTM%<0

In other words, not the interbank overnight rate. Buy treasuries until YTM is negative and any buyer receives negative returns from coupons and gets exactly less than their full principal amount back all for the supposed safety of an rfr with a YTM less than 0%.

No return and only with return of principal below the cost of the bond. This isn't anything to do with real interest rates. This is pumping bonds until there is a legitimately negative guaranteed rate of return that is also guaranteed to be negative and you will lose money holding to maturity.

 

[bwolinsky]

Quote from 5to12:

Anyway, earlier on, this --

''Bonds are not commodities. This is a discussion on bonds and how they produce intrinsic value.''

Actually in the old, more complete, relationship, bonds are commodities but - as fictitious capital - absolutely unproductive; relying upon value created in the -real economy- they are derivative and have no intrinsic value. Their value depends upon both avg. rate of profit and mass of profite which they happen to be a -claim- upon.

Of course nowadays there is also dependence upon fiscal crisis of state, debt and deficit financing, 'lets pretend profits' created by a consumption 'based' econ filled with unproductive labor.

Uh yeah, we have some definite problems way beyond the Larry and Jannet Spectacle.

A Su Servicio
Juan

We have a language barrier.

Bonds are "securities" as are equities. Bond futures are commodities and that is in the sense of how I'm using this word to denote treasuries sold through futures contracts for the purpose of trading them and for Yellen getting the Fed to keep buying until there is a negative return guaranteed to be realized actual YTM.