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That is not the case with Volcker.
The economy that Paul V. had to deal with is much different now. That time frame was the birth of globalization and the start of the export/import side of the U.S. where we began to import deflationary factors, hence our trade surplus now.
Technology , Globalization, Demographics killed inflation ... while creating pocket inflation
Technology , Globalization, Demographics killed inflation ... while creating pocket inflation
Seems like a stretch, as Volcker's actions correlated with the lower inflation.
These banks knowingly committed suicide?
Greed is a sickness that all men can't see when $$$$$$$$$ are around...
I call it Gold's disease
We export inflation $
We import Deflationary $
For a consumption based economy, it's not a bad deal
Greed is a sickness that all men can't see when $$$$$$$$$ are around...
Behind all bubbles are policies that create them.
Let me ask you guys this
Is the Fed 100% responsible for the oil production of all oil nations?
;-)
The same as always.... too many $ cashing too few goods...
And who controls M2?
Behind all bubbles are policies that create them.
Yep--repealing Glass Steagall is a big part of the last one.
Yep--repealing Glass Steagall is a big part of the last one.
Cept Glass Steagall had nothing to do with derivatives.
So what?
The banks you think were involved in derivatives would not have been affected by Glass Steagall.
With Glass-Steagall, there would not, could not, have been a Citi/Travelers merger, and competitors would not, could not have bulked up the way they did. Major money center banks most likely would have been smaller, more manageable, more easily wound down
The S.E.C. 2004 Leverage Act .... allowing 40-1 from 10-1
EWOMD
Economic
Weapon
Of
Mass
Destruction
So what is the deal on commercial lending? I read where the lending is tight to small business.
So what is the deal on commercial lending? I read where the lending is tight to small business.
The one big commercial lending conference I went to back in 2014... a lot projects that are in play from 2011-2017 time frame
The buildings are amazing ... state of the art ...
IIRC Dodd Frank has lowered the level of lending to small business. The big companies are unaffected, which has contributed to the slow recovery
Yea that is the story i.e. collecting interest on excess reserve fund and all, not sure how true that is or was?
Which is another question, what is the reserve ratio. I have read where it was infinity to one.
"These banks knowingly committed suicide?"
the banks were being run by people who got really really rich making bets with "other peoples' money" on housing loans.
annual growth of household indebtedness in mortgage, 2009 dollars
Banks are legal fictions and do not have human capabilities.
The people running "the banks" -- aka Wall Street knew what they were doing, mostly. "Heads I win, tails you lose" essentially
"
New comment by Bellingham Bill in Fed Rate Hikes Need More Inflation:
"These banks knowingly committed suicide?"
the banks were being run by people who got really really rich making bets with "other peoples' money" on housing.
Banks are legal fictions and do not have human capabilities.
The people running "the banks" -- aka Wall Street knew what they were doing, mostly. "Heads I win, tails you lose" essentially
"
And the people running "the government"-- aka the federal government knew what they were doing, mostly. "Heads I win, tails you lose" essentially
Inflation is supposed to be good for debt holders. Unless you take on additional debt, the principal stays the same... but the ability to pay it off goes up as incomes rise. How is debt designed to grow with inflation?
It's inflation indexed, COLA, TIPS, etc...
besides if inflation happens, I'd be worried about us having anarchy revolt.
Lost another MMT friend today! :-) Had to finally leave the group, these people have gone insane with Bernie running... a reality that no politician believes them even though their leader is the head economist of the senate...
EKKKKKKSSSSS!! :-)
what does MMT have to do with Sanders?
Their main person or top 3 in America is Bernie economic adviser on economics
Once Bernie said he was going to pay for his stuff with tax increases, it drove the MMT people mad... They went ballistic,
I admit brought a smile to my face..... Their other head person Warren Mosler and I don't agree on this economic cycle, shocking right...
Side winder MMT people who are just old and cranky on facebook and then you have the Marxist lovers who hate America, well guess how that conversation went.
I really like the MMT jobs program for the poor and uneducated ... but man they can't get over themselves and try to make everything bigger than what it is
that is a paradox, a communist and free market guys.
Friedman has caused a lot of damage to the US with the floating exchange rate and a few other things. Stockman has some choice things to say about him.
OTOH I enjoy reading one of his students Thomas Sowell who is the 1st economics book I read, it was very enlightening. No matter what Lips says he makes a lot of sense.
"My goal is to shine a bright light on how policymaking within the Fed directly affects not just those on Wall Street, but every citizen of this country, and for that matter, the world."
I like it
If the lending standards of today were allowed to take hold back in 1996 ... the housing market would have looked a lot different from 1996-2007
IOW CRA type regulations that were morphed back in the 90s caused the meltdown? Is that what you are saying?
Is that what you are saying?
All loans are different now. A lot A paper loans that had poor underwriting due to the debt structure of the loans. Sub Prime in itself isn't a big enough market to create that much damage velocity. A lot A paper label loans that can't be written up today
High Fico option arm loans with stated income, can't happen anymore, this is a good thing. Housing shelter is now back to capacity owning with hardly any exotic debt structure.
America Banker wrote any article with me on a new 80/10 loan that came out in California in 2014, even that loan is only set up for a high net income buyer..
This cycle is as clean as you can possible get in America
The story goes that the subprime loans lowered the standards or implied that lower standards were acceptable across the board.
You said "Greed is a sickness that all men can't see when $$$$$$$$$ are around..." that same thing applies to public servants, they are not immune to this. e.g. Barney Franks
"Greed is a sickness that all men can't see when $$$$$$$$$ are around..."
I believe that statement speaks for itself.
In any case, those days are long over and all the exotic loans are gone, that is a good thing for this country. Always have to be mindful of speculation.
Stock Market margin debt falls 1 to 1 when the market falls down, other types of debt don't have that type of efficient clearly system. we still have delinquent loans in the system today that were marked up during the bubble years that are in judicial states.
I believe that statement speaks for itself.
Yup and it was the pathology of the "poor pathology".
There you have it boys a RE Lender by trade implies that yes it was lower standards, i.e. increased banking regulation that caused the melt down. Not the repeal of Glass Steagall.
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