Wednesday, October 08, 2008

Dancing With Who Brung Ya

6/25/03:

The Federal Open Market Committee decided today to lower its target for the federal funds rate by 25 basis points to 1 percent. Voting for the FOMC monetary policy action were Alan Greenspan, Chairman; Ben S. Bernanke...


8/12/03:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent. Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Ben S. Bernanke...


9/16/03:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent. Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Ben S. Bernanke...


10/28/03:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent. Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Ben S. Bernanke...


12/9/03:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent. Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke...


1/28/04:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent. Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke...


3/16/04:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent. Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke...


5/4/04:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent. Voting for the FOMC monetary policy actions were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke...


Source: FOMC meeting statements

15 Comments:

Blogger Spider said...

TCR,

would you maybe add a little comment about why you kept highlighting the "1 percent" to those of us who never took a business or economics class? I usually am able to follow what you write about quite well. I'm just not grasping this one.

Then again, it could be all the stress I'm under as my wedding is this sunday.

-Spider

10/08/2008 10:24 AM  
Blogger Jimmy the Saint said...

Spider:
It is because "B-52" Ben was one of the people responsible for this mess. It wasn't only Greenspan. Ben went right along with whatever Greenspan wanted. As you know, CR thinks rates were kept too low for too long.

10/08/2008 11:07 AM  
Anonymous DanC said...

I think Greenspan wanted to end the fiat monetary system as fast as possible sincew he was a follower of Ayn Rand and knew that Gold is needed to anchor the system. Thus, he flooded the system with fiat money.

The sooner they lower rates to zero or just start paying people to borrow money (negative rates) and the system then collapses, the sooner we can start over with Constitutional money, e.g., gold/silver.

10/08/2008 1:54 PM  
Anonymous Anonymous said...

Bernanke's interest and academic study was the depression. I just hope this isn't a case of "Munchausen by Proxy Syndrome" situation. They induced the symptoms on the Nation. Nothing like a real live experiment. And would make for a great academic paper. Oh, but how do we explain Greenspan :-(

Everyone that took personal responsibility, didn't go crazy, didn't trust the pushers of these financial products, didn't spend beyond their means, and saved, is getting clobbered by these low interest rates and inflation. So on the one hand you have the people that participated that got burnt, and on the other, the people who did not participate getting hurt. So which do you save?

I don't see any slow down in CC companies. They are still sending courtesy checks and offers. The infomercial world is full of real estate classes, SMC, foreclosures, auto purchases. Heck even Donald Trump is advertising for seminars on making money.

On the news they used as an example of the problem hitting main street. A single mom, who works as a kindergarten teacher, couldn't get a loan to buy a house. They didn't mention if she had any savings. From this little info, looking at the pay for a kindergarten teacher, I wouldn't doubt in normal times that she would not get a loan. But is this a problem?

Anyone seen Dick Cheney? I'm afraid to ask, what's he been up to? Isn't it strange that he seems to have disappeared from the public and media given how involved he has been in the past.

10/08/2008 3:51 PM  
Anonymous Anonymous said...

While reading a news article, "Does Experience Really Equal Good Judgment", they referenced a letter Obama wrote to the Fed Chairman and Treasury Secretary, on March of 2007, begging them to take action to prevent a financial crisis.

The letter is at TPM.
Obama's Year Old Letter to Bernanke and Paulson Regarding Housing Crisis

And just two weeks ago, John McCain was saying, my friends, "the fundamentals of our economy are strong." I threw in the "my friends" part. He said it so many times during the town hall debate and it felt contrived, even condescending. Argh.

What in the world were Greenspan, Paulson and Bernanke doing! Even SEC's Cox? I have the same feeling in the pit of my stomach, as when Katrina hit, and we wondered what's up with FEMA.

10/08/2008 4:11 PM  
Anonymous Anonymous said...

You're Good

10/08/2008 4:17 PM  
Anonymous NeilS said...

I apologize for the length of this posting, but I am interested to find out who is to blame for the present crises and would like to suggest the following list.
I am not an economist and would like to have input from people who are more expert than I.

From least to most culpable:
1. Home buyers who got in over their heads. Sure many should have rented instead of buying, but in a market where prices are inflating over many years it is hard not to think that you are missing out on making money. Furthermore, it is much nicer to own a home than to rent one. Besides they are not experts on housing.
2. Real estate investors. They should have had more expertise than people who were just looking for a place to live, but making money in any market is knowing when to get in and when to get out. That is tough.
3. Reputable real estate brokers pushing people into houses that they could only afford if the prices continued to inflate.
4. Disreputable real estate brokers. They may be culpable, even criminal, but I don’t blame a shark for being a shark. Though I might put him/her in a cage.
5. Investment bankers creating securities whose value was opaque at best. Again see the shark analogy (re: #4).
6. Congress, both Republican and Democrats. Republicans for relaxing laws so that brokers could sell more houses and housing debt. Democrats for relaxing laws so that less wealthy people could by houses they couldn’t really afford.
7. Credit rating agencies. How could they give AAA ratings to securities that they clearly did not know how to value?!?!?!? If you don’t know what it is worth, just say so. I’m surprised that we aren’t hearing more about these folks. These practices must have been in collusion with brokerage houses trying to market the funds. I suspect that criminal activity was probably involved. They aren’t this stupid. They are this greedy.
8. The Bush administration for a lack of oversight (Cox et alia at the SEC) and incompetents at Treasury (Snow and the numerous unfilled positions, though I would not put Paulsen nor O’neill into this category), and for weakening our economy with poorly targeted tax cuts, and giving us little wiggle room with unrestrained spending.
9. The Fed, and, in particular, Greenspan. To a lesser extent Bernanke. For keeping interest rates so low even in the face of a clearly ‘irrational exuberance’ in the real estate markets. Deflation of house prices is the main problem in the current financial crisis, and wouldn’t be happening if there had not been so much inflation to begin with.

10/08/2008 4:54 PM  
Anonymous Anonymous said...

Ben Bernanke is the ML Carr of the American financial system.

Henry Paulson is the Rick Pitino.

Both have taken us into the toilet so we can get a higher draft pick.

Sarah Palin may have more intimate foreign experience with Russia after the US sells them back the territory next week.

10/08/2008 9:29 PM  
Anonymous judyo said...

Cheney, bunkered planning McCain's "leg up" for 11/4/08.

10/08/2008 10:22 PM  
Blogger nl said...

cheney was in texas over the weekend for a "fund raiser".... I am sure he is somewhere...

conspiring is hilarious to read.

Who to blame?

the blame is a list of to many to list.
To many had their hand in the cookie jar, the cookie taste good and may i have another.

Essentially we can blame a bunch of stuff but ultimately it isn't ONE event that caused this mess... It was a confluence of events that finally got on the same page of the story. Thus we are not here.

As far as CRA - the racist comments about this policy is flat out ignorance.

To provide income to lower income families (essentially the credo) has been spun that it was only for MINORITIES. That is to funny.

I guess the only people in the country who didn't qualify for a DU or LP loan (fannie and freddie algorithm for loan approvals) where those of a non-white skin color. Skin color was not a criteria for a loan application as the very end of an mortgage application did ask your race/sex and creed but you can say NA. it had nothing to do with it. Unless skin color was related to FICO score or education or any way to bring prejudice into the equation.
LOOK the CRA lowered credit/underwriting standards, I know many DOCTORS, LAWYERS and others who have bad credit and make bucks. They can have green skin or purple. I have friends who have little make little but have great credit.

The point is we made it easier to get a home. That is it. Easier money ='s more demand, more money to chase fewer assets. While this was going one... our home builders decided to build a quarter century of homes in 5 years....

Housing gloom will be around for a while.

It will get better, stay positive.

10/09/2008 12:00 AM  
Anonymous Cheryl said...

"Sarah Palin may have more intimate foreign experience with Russia after the US sells them back the territory next week."

I like this idea.

10/09/2008 11:23 AM  
Anonymous goldhorder said...

Neils,
The road to serfdom by Hayek explains it quite well.

Really though...it is just the cycle of history. Read over the federalist papers again and see what we argued about back then and why. We lived off the myths of those times for years but it was all a slow decline to empire. We took over from Britain after WW2 as the most powerful empire on Earth and outlasted our only challenger the Soviet Union. All of this went to our ivy league educated elites' heads. They see themselves as being smart enough and capable enough to rule the world. That is what "Globalisation" is. That is why we have over 700 military bases around the world. Anybody who disagrees is announced an enemy and starved, bribed, or killed until they are incorporated in our system. All leaders of large empires have gone down this road. It is why Lord Acton gave his famous quote...

I cannot accept your canon that we are to judge Pope and King unlike other men, with a favorable presumption that they did not wrong. If there is any presumption it is the other way against holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. All power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority.


I think he says it even better here...

The danger is not that a particular class is unfit to govern. Every class is unfit to govern. The law of liberty tends to abolish the reign of race over race, of faith over faith, of class over class.


So in short it is our top level leaders who have thoroughly corrupted every facet of American society. Corporate CEOs, Our financial leaders at Goldman Sachs, Morgan Stanley, etc., The Federal Reserve board memebers, the congress, the executive branch, the judicial branch, The DNC, the GOP...all of our "best and brightest". They have been born into a place of priviledge and think that people are pawns to control and serve their interests. And they are largely correct about that because people are not smart enough to turn away from their leadership. Most of the posters on these boards still believe that the answer to all their problems is that we just have to find better masters. HAHAHA...the only way out of it is to save ourselves one individual at a time. The only way out of this is to quit being a slave and become your own master. Buy Gold and silver, guns and bullets, and rural property.

10/09/2008 4:15 PM  
Anonymous NeilS said...

Goldhorder

Interesting comments. I always enjoy and excuse to reread the Federalist Papers, though I don't recall discussion of the present topics.

I expected the drop in America's global inluence in the coming century, but I did not think that it would come so precipitously.


I am still not convinced that this financial crisis cannot be dealt with through reasonable regulation and oversight. It has worked in the past.

Kevin Phillips also seems to be arguing that these problems are much more systemic.

10/09/2008 6:09 PM  
Anonymous goldhorder said...

I only bring up the Federalist papers to point out the corruption that has occured in our leaders and our society. What I wanted you to take away from that is that our earlier society argued about the role of government in peoples lives and just how much faith and power do you want to put in a central government. In this crisis the only solutions we are talking about all involve more government power...even though it has been the consolidation of power in Wall street and DC(working together) that has brought us to this point.

Kevin Phillips is a very smart man. You can do no wrong reading Kevin Phillips. His books are long and dry but he is dead on about everything he has to say in them. I'm just an angry bitter man fed up with my fellow countrymen so feel no shame in ignoring me...haha...Phillips is a serious intellectual so don't ignore him.

And buy gold and silver

10/09/2008 8:31 PM  
Anonymous Anonymous said...

Why do people persist in believing the Fed controls short term interest rates? A simple chart of the 13-week T-bill yield plotted against the Fed Funds rate proves to anyone who is NOT BLIND that the T-bill rate leads, it does not follow, the Fed Funds rate. The FOMC only caves to what the market (open auction for T-bills sets their yield) demands.

The Fed does a lot of evil things (look up the Austrian School of Economics in Wikipedia for more on this) but lowering interest rates isn't one of them.

Not that these facts will be persuasive; few people let facts get in the way of a widely held fantasy.

10/23/2008 12:01 PM  

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