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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (34275)	3/23/2009 11:32:39 AM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Re: "Then we agree." OK. Re: "The Fed was set up to handle scenarios like just occurred." (I don't know if that last is 'what we are agreeing about'. The Fed's main tasking - IMO - is to provide for monetary stability and, if Keynesian policies are followed... to occasionally act in a counter-cyclical manner to try to moderate the worst swings in the economic cycle. However, my opinion is that monetary stability is the more important of the two....) I would not say that the Fed (alone) had (or should ever have!) anywhere near all the powers and policy tools required to single-handedly "solve" any kind of globally synchronized financial collapse the likes of which we have stumbled into. OTHER ARMS of the government (IMO) have far more necessary actions to take then mere monetary policy. (Monetary policy, as it has usually been practiced, is a bit like 'pushing on a string' at this point, with real Fed Funds effectively at zero or below.) Congress and the Executive, for example, likely have far more heavy lifting to do then even the Fed... as also does the private investors and public markets of the world. Re: "The other interesting perversion was that they changed several investment banks to provide them FDIC charters almost overnight so they could be bailed out." They certainly did... Goldman and Morgan Stanley for example. Re: "If that had not been allowed if my understanding is correct hundreds of thousands of investors would have become unsecured creditors of the failed wall street firms who held their securities in street name." Not necessarily... SIPC insurance would still apply. (And investors would stand even higher in the bankruptcy chain for repayment then even bondholders....) Re: "Still, a better solution would have been to protect the investors rather than the fat cats." Eh? (Which 'investors' and which 'fat cats'? Aren't 'fat cats' generally the largest of 'investors'?)