Goldman Sachs Re-composing 'The Greek Tragedy'

Stupid piece. Nic and I have explained why Fed independence is essential to a reasonably well-run economy. Spitzer sees that the Fed didn't work once and is proposing a solution that never works ever. This isn't an opinion. It's an empirical fact.

(Sanders's audit amendment seems to have been watered down to the point that it likely won't affect Fed independence.)

Incidentally, didn't most or all of Spitzer's high-profile cases against Wall Street end with acquittals?

 

Transparency never works?

 

They ended with settlements, but a lot of people still believe that he was mostly fighting those cases in the media. And that op-ed piece is also fundamentally wrong about the Fed "choosing winners or losers" - it didn't. It didn't even oversee Bear (to whom it didn't open the discount window) or Lehman (same). It was willing to take on a limited exposure to Bear, but only because Bear found a buyer. It had nothing to do with letting Lehman fail, and opened the discount window to stop economic contagion, not to "pick winners and losers".
The Fed screwed up some things, yes, but it didn't decide on Goldman vs. Lehman.

 

Its not about transparency, its about meddling. See what has happened in Argentina, where Fernandez managed to oust Redrado.

 

******** meddling. These guys decided who got a ton of our money and who didn't (and died as a result). I have a right to know how those decisions were made.

 

No they didn't, actually, and why do you? Is there some sort of constitutional right to know who the Fed lent money to? I haven't seen it. Do you have the right to inspect the CIA's books?

 

Would someone else mind arguing with captain flamethrower? like many others before, i'm done with his "i can therefore i'm a dick" style of interaction.

 

Thing is that Nic is correct.

 

Your argument is that a) the Fed chose who survived and who didn't and b) you have the right to audit its books. You are factually wrong on the first and have not shown any sound logic for the second. Complaining that my avatar has a flamethrower doesn't get you there.

Of course, your own caption being "arrogant bastard" is pretty ironic in this regard.

 

I heard you the first time. Thanks.

Sorry, I don't buy the argument that former Sachs employees at the Fed should be able to decide the faith of the economy behind closed doors.

 

That's true. That role should be left to ideological House members who have to campaign for their seats every two years. It will be awesome when "I vow never to increase interest rates" becomes the next "I vow to cut taxes."

 

1. What Bo said.
2. None of Geithner, Bernanke and Greenspan are "former Sachs employees". GS isn't setting central bank policy.

 

Seriously? Is either situation really desireable?

More than almost anyone on here I know what having congress critters "helping" can do in a highly technical area. And it's definitely true that too much help from those who have opinions in place of knowledge is, to put it politely, counterproductive. I agree with you on that.

But by ignoring TWs comment you seem to be endorsing the Fed's unwillingness to publicly report on what is an essential element of public policy.

If I have misunderstood your point, I apologize, but that's what it seems like to me.

And, by the way, "nic", his representatives DO have the right to inspect the CIA's books.

 

That's true, they have that right at the moment due to a law. Do they have the full right to request all confidential information in the CIA's possession? Can any Congressman show up and start reading highly classified documents? Perhaps they can - that I don't know. But that'd be bad policy.

I'm not a big fan of the Fed waiting 5 years to release information (2 years is better), but I am opposed to basically anything that impinges on the Fed's autonomy. There's no reason to do so, and the more governments interfere with central banks, the worse it is for that country.

P.S. Bo was obviously being ironic.

 

We don't fundamentally disagree here-although one of the proposals, which is for GAO to have oversight, seems pretty reasonable to me. They have a great track record.

Thanks for the condescension.

But you must recognize that Bo's ironic statements still have a point. One that I agreed with. I was pointing out that the ideas of the two posters were not mutually exclusive.

 

Wasn't the desire for more mortgage backed AAA bonds due, in some ways, to the treasury note's low yield in addition to the fees?

Which perverse standards and mandates?

Isn't "fraudulent lending" just part of a free market? If someone's willing to extend credit to someone else, in the market's eyes how is that fraudulent?

I just read about some ACA emails where they were trying to figure out why Goldman didn't want any Wells Fargo loans in the deal, ACA couldn't figure out why they didn't want loans from a company who they thought had strong lending standards. That should have set off some alarm bells.

Could you explain your reasoning behind C).

http://www.nytimes.com/2008/10/05/business/05fannie.html?pagewanted=all

Is the Fed's inflation hawkishness, at the expensive of the other half of its dual mandate, a Wall Street/investor friendly policy?

There was also something recently about how banks are required to keep $70 billion in assets at the fed/it's branches but instead they have $1.5 trillion. The article speculated that it was mostly "toxic assets" and they're being held to avoid them being priced.

http://www.salon.com/news/opinion/feature/2010/05/01/trillion_dollar_fraud

 

its also quite funny that he brings up AIG. if it weren't for Spitzer's campaign against AIG, it is debatable whether they would have ever needed bailouts.

 

what former GS employees were high level people at the Fed, making decisions during the crisis?

 

I'm having trouble seeing this one. Could you clarify?

 

Senate votes to allow GAO to audit Fed and $ they doled out after 2008 crisis. We'll finally see who got our taxpayer bucks and how much. AKA -a little transparency in our so-called Democracy:

http://www.nytimes.com/2010/05/12/business/12regulate.html?hp

 

Yes - that will finally answer the irrelevant question no one's really asking. Hooray!

 

Exactly, either don't pass anything or pass something that has some weight. This is a watered down, waste of time, and tax payer money. Why even bother!

 

Why do you hate our freedoms?

 

My new investment program – gold bars canned food and ammunition.

See you in the Adirondacks boys!