US monetary policy is about to lead to disaster

[piezoe]

It always astounds we not how gullible the public is, that we expect, but how gullible many traders are. Dealing with Wall Street on a daily basis I would think would make it extremely difficult to pull the wool over a person's eyes. When you read something that seems absurd, chances are it IS absurd. Is there no good journalism anymore? Do most Journalists today put into print whatever they hear from whatever source, never bothering to check out the veracity of even the most astounding statements!

(I have to say that Forbes has become a nearly worthless source of accurate information. It has reduced itself to the rank of Barons!) That Article says that this recent audit of the Fed by the GAO "... is the first audit of the Fed in United States history since its beginnings in 1913. " This is a ludicrous statement!

The Fed is always audited every year, it is the law! They have both internal and external auditors and the GAO periodically audits them. This may be the first audit by the GAO since Dodd-Frank (or what we humorously refer to around these parts as the Dodd-Dude act) went into effect, but it is certainly not the first audit in the Fed's history. What Bullshit!

 

[piezoe]

fhl, don't lose sight of the real interest rate. The Fed targets that indirectly via the inflation rate. Their measure of inflation has a lot of imprecision and inaccuracy, but is the best measure available. (At least they think it is, or they would use something else) . It is difficult enough to get a handle on current inflation rate, let alone the projected rate! If you think you can do better, send your resume to the Fed. I'm sure they would like to hear from you.

 

[fhl]

It always astounds we not how gullible the public is, that we expect, but how gullible many traders are. Dealing with Wall Street on a daily basis I would think would make it extremely difficult to pull the wool over a person's eyes. When you read something that seems absurd, chances are it IS absurd. Is there no good journalism anymore? Do most Journalists today put into print whatever they hear from whatever source, never bothering to check out the veracity of even the most astounding statements!

(I have to say that Forbes has become a nearly worthless source of accurate information. It has reduced itself to the rank of Barons!) That Article says that this recent audit of the Fed by the GAO "... is the first audit of the Fed in United States history since its beginnings in 1913. " This is a ludicrous statement!

The Fed is always audited every year, it is the law! They have both internal and external auditors and the GAO periodically audits them. This may be the first audit by the GAO since Dodd-Frank (or what we humorously refer to around these parts as the Dodd-Dude act) went into effect, but it is certainly not the first audit in the Fed's history. What Bullshit!

Here's what Sen Bernie Sanders office said in a press release. He said it was the first:

The Fed Audit
Thursday, July 21, 2011

"The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders."

http://www.sanders.senate.gov/newsroom/press-releases/the-fed-audit

 

[fhl]

fhl, don't lose sight of the real interest rate. The Fed targets that indirectly via the inflation rate. Their measure of inflation has a lot of imprecision and inaccuracy, but is the best measure available. (At least they think it is, or they would use something else) . It is difficult enough to get a handle on current inflation rate, let alone the projected rate! If you think you can do better, send your resume to the Fed. I'm sure they would like to hear from you.

How could I possibly forget that the fed is constantly blowing bubbles with neg real rates?
Traders know what's going on with real rates.

The chart of forward inflation expectations that I posted is constructed by the fed and they didn't put a lick of work into it. It is a simple computation derived from the mkt prices of five and ten year bonds and five and ten year tips. It simply reveals what the market expects inflation to be. You don't seem to grasp that. The fed didn't project anything. The mkt did.

 

[piezoe]

I don't want to give more time to that ridiculous article in Forbes than it deserves. But let me just take apart another sentence that is bound to raise eyebrows among the gullible. The article states: " The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis."

Here is what was left out:

1) The Fed deals with foreign Central Banks, not foreign banks in general . (Unfortunately the adjective 'Central' was omitted!)
...
2) The '...corporations...internationally' refers to U.S. Corporations that are international in scope and have foreign subsidiaries, not to foreign corporations in general..

And here is what was put into the sentence that suggests lying by the Fed when there was none.

The word '..., purportedly' means 'alleged' or 'rumored' . There is nothing alleged or rumored here. It is a simple fact as established by the audit.

If we as a people do not do our own filtering of this constant media barrage of politically inspired disinformation, we will elect the wrong people into public office, we will bury ourselves in a mound of useless, irrational, wrong headed regulations and laws, and rather than spending our waking hours in productive pursuits, we will spend them producing mounds of documents that no one will read or care about. We will become the Western World's counterpart to India -- the World's most democratic country -- where nothing moves faster than the time it takes to comply with ten government regulations.

Can you just imagine a situation where Congress would have had to monitor and approve each and every individual emergency action taken by the Federal Reserve System and the Treasury in 2008!!!

There is a rational way to avoid this horrible nightmare: it starts with a well educated public; it ends with the recognition that there is such a thing as too much democracy.

 

[piezoe]

How could I possibly forget that the fed is constantly blowing bubbles with neg real rates?
Traders know what's going on with real rates.

The chart of forward inflation expectations that I posted is constructed by the fed and they didn't put a lick of work into it. It is a simple computation derived from the mkt prices of five and ten year bonds and five and ten year tips. It simply reveals what the market expects inflation to be. You don't seem to grasp that. The fed didn't project anything. The mkt did.

I may not seem to, to you at least.

I have no problem with anyone who wants to second guess Fed policy decisions. The Fed would be the first to admit there is nothing exact or certain about the monetary policy decisions they make.

My criticism is reserved for those who present nonsense as though it were fact, when the slightest amount of effort on their part would have revealed the facts to them. There is only one conclusion possible, they are either doing what they do intentionally or out of ignorance or utter slothfulness..

The Forbes Article is a quintessential example of what I am referring to.

 

[fhl]

I don't want to give more time to that ridiculous article in Forbes than it deserves. But let me just take apart another sentence that is bound to raise eyebrows among the gullible. The article states: " The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis."

Here is what was left out:

1) The Fed deals with foreign Central Banks, not foreign banks in general . (Unfortunately the adjective 'Central' was omitted!)
...
2) The '...corporations...internationally' refers to U.S. Corporations that are international in scope and have foreign subsidiaries, not to foreign corporations in general..

And here is what was put into the sentence that suggests lying by the Fed when there was none.

The word '..., purportedly' means 'alleged' or 'rumored' . There is nothing alleged or rumored here. It is a simple fact as established by the audit.

If we as a people do not do our own filtering of this constant media barrage of politically inspired disinformation, we will elect the wrong people into public office, we will bury ourselves in a mound of useless, irrational, wrong headed regulations and laws, and rather than spending our waking hours in productive pursuits, we will spend them producing mounds of documents that no one will read or care about. We will become the Western World's counterpart to India -- the World's most democratic country -- where nothing moves faster than the time it takes to comply with ten government regulations.

Can you just imagine a situation where Congress would have had to monitor and approve each and every individual emergency action taken by the Federal Reserve System and the Treasury in 2008!!!

There is a rational way to avoid this horrible nightmare: it starts with a well educated public; it ends with the recognition that there is such a thing as too much democracy.

The fed (Ben B) told Sen Sanders in a hearing that the fed only makes loans to sound firms. He told Sen Sanders that at the same time that the fed was extending over 2 trillion in credit to a bank that was in jeopardy of going down the tubes. Sen Sanders was also apparently led to believe that the fed had made a total of 2 trillion dollars of credit available during the crisis. I don't know where Sen Sanders would have gotten that notion except from the fed itself. The audit revealed a total of 16 trillion of credit was made available.
This is extreme deceit. With our money. And you're worried about whether Forbes is destroying the fabric of our country. You seem to have no concern about the fed.

 

[piezoe]

Here's what Sen Bernie Sanders office said in a press release. He said it was the first:

The Fed Audit
Thursday, July 21, 2011

"The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders."

http://www.sanders.senate.gov/newsroom/press-releases/the-fed-audit

I should clarify. I'm not accusing you of claiming this is the first audit of the Fed. The author of that article when questioned about that absurd statement made clear that Sanders was the source. Now you and I know that Sanders is a bright and experienced U.S. Senator, and he certainly knows that the Fed is audited annually by the Inspector General's office. He may have been misquoted, that happens all the time in politics, or his words may have been taken out of context. That happens even more often it seems. Or he just said it in the heat of a political campaign and screwed up. Either way, you know, and I know, that Bernie knows that the Fed is audited both internally and externally every year, by law. Their balance sheet is published (I think perhaps it is bi-weekly now, but not sure about that.) All their transactions are published in detail, but not necessarily in real time. (The reporting of some is considerably delayed for good and obvious reasons.) In more recent years, in response to criticism, they have become one of the most transparent central bank operations in the World.

 

[S2007S]

HAHAHAHA



just saw this today, that is just too fuc$king funny.....
and so true...

 

[Tsing Tao]

These are your heros, Piezoe. Complete clowns, the lot of them:

• KOCHERLAKOTA SAYS FED SHOULD CONSIDER NEGATIVE RATES
• KOCHERLAKOTA: TAPERING ASSET PURCHASES LED TO SLOWER JOB GAINS
• KOCHERLAKOTA SAYS JOBS SLOWDOWN 'NOT SURPRISING' GIVEN POLICY
• KOCHERLAKOTA: TAPERING ASSET PURCHASES LED TO SLOWER JOB GAINS