of responding reflexively to a boom /bust financial crisis.....with medicine that causes more boom/ bust financial crisies
Richmond's Federal Reserve President Jeffery Lacker (there are 12 regional fed's in the usa)
WSJ's selected quote form lacker from one of their blogs highlights
“I believe that a strong case can be made that the financial safety net, especially those parts that were more implicit and perceived than
explicit and written into laws, played a significant role in the accumulation of risks that ultimately led to the turmoil we are still
now WSJ like to be -pro well street / pro "marketing" the financial oligarch's and the above paragraph was the only one linked to the blog....so
one may assume it summerizes the Lacker's speech in the CLEAREST way....especially when he was Criticizing FED policy
what else is on net.....here from a nasdaq link
Lacker argued that the presence of a government safety net limits the incentive for too-big-to-fail institutions to prepare for liquidity
disruptions, "thus increasing the likelihood of crises."
i.e the more the big banks know they can create "booms" that they know will INEVITABLY bust....but they also know they will be bailed out (by
taxpayers) on those eventual losses...the the MORE IT will happen. basically mocking that ( it will continue to be reported as "such a suprise"
when it happens AGain)
ok .....now that makes sense....but seems he's concerned the current Fox's guarding the henhouse may just TRY to do the same thing over again....
here's a link to the official copy of Lacker's speech
so now let's see what else lacker says
While deployment of the financial safety net is often viewed as an essential response to the financial crisis, I believe we need to give serious
thought to the extent to which the safety net was actually a significant cause of the crisis.
now that sounds a bit clearer..........
while searching for links regarding his speech... i have been amused by the way the various Media reports have tried to TWIST and especially
MIS-REPRESENT the context of his quotes.... in a attempt to not "show the fed" in any type of Critical light
sometimes by prefacing the quote with a vague statement about finance (that is disengenious in it's self) and doesn't even deal with what he is
talking about..............or just linking the story's but not taking the most damning (critical paragraphs).................
Lacker i guess has some morals or conscience...
but hey everything the fed is doing seems to be working right........even though you sometimes gotta read between the meda lines for the real
perspective.....or wait for someone leaving wall street to give an unbaised opinion.........here's retiring Merrill analyst David rosenberg (who
has been a good source of non ass -kissing wall steet news)
"In fact, the weekly Fed data are now flagging the most intense declines in bank lending to households and businesses ever recorded."
[edit on 11-5-2009 by cpdaman]