Interesting Speech by the Fed's Hoenig Today

jefftheshark · February 23rd, 2011, 12:30 PM

Link

Some strangely tough talk from a member of the Fed. Perhaps he's positioning himself to stage a coup against Bernanke if Ron Paul's elected.

The first section of the speech:

Like most Americans, I am a strong defender of free market capitalism and I’m here today to make an argument that our country should take the difficult steps required to move its financial industry back toward that system.

I acknowledge that there is more than one view on this topic. There are those who believe we have made great strides with Dodd-Frank and if we implement it well, all will be fine. Some believe that that the industry is over-regulated, which may be true, but we should not confuse over-regulated with well-regulated. And some of us are certain that in spite of all that’s been done and debated, the soundness of the largest financial institutions and the systemic risks they continue to pose is no better. In my view, it is even worse than before the crisis. As well-intentioned as the Dodd-Frank Act may be, it will not improve outcomes. Today I will describe why I believe that is the case and, more importantly, what must be done to give the United States a financial system that is healthy and competitive, and that supports rather than endangers the economy.

There are many villains in the story of the recent crisis and much written to name them, describe them and even curse them. If you want to know how it happened, read "Thirteen Bankers" and "All the Devils Are Here." If you want to know how to fix the problem, I highly recommend "Regulating Wall Street," from New York University’s Stern School of Business. If you want to understand why the American public refuses to ignore the injustices associated with executive compensation in bailed out companies versus budget cuts borne by the middle class, read Rolling Stone’s article "Why isn’t Wall Street in Jail?" If you wonder why "no one saw it coming" then I suggest you read up on Brooksley Born or, a decade later, Meredith Whitney.

Or, you might even read the remarks of an Iowa-educated bank regulator turned-policy maker in Kansas City. Fifteen years ago, I gave a speech entitled "Rethinking Financial Regulation," which summarized the major threats facing our financial system. My suggestion then was to take steps to reduce interdependencies among large institutions and to limit them to relatively safe activities if they chose to provide essential banking and payments services and be protected by the federal safety net. I also argued that safety net protection and public assistance should not be extended to large organizations extensively engaged in nontraditional and high-risk activities. A final point of those remarks was that central banks must pursue policies that preserve financial stability. I am going to repeat those suggestions today, and as often as the opportunity allows. History is on my side.

Today, I am convinced that the existence of too big to fail financial institutions poses the greatest risk to the U.S. economy. The incentives for risk-taking have not changed post-crisis and the regulatory factors that helped create the crisis remain in place. We must make the largest institutions more manageable, more competitive, and more accountable. We must break up the largest banks, and could do so by expanding the Volcker Rule and significantly narrowing the scope of institutions that are now more powerful and more of a threat to our capitalistic system than prior to the crisis.

conraddobler · February 23rd, 2011, 01:18 PM

Hark.... is that a possible good guy?

Working for the FED?

Hmmm, didn't think that was possible.

He's from the KC FED, I've heard it said that there is usually always one FED district where the new ideas come from and that lately that role is being played by the KC FED.

What's so radical about what he said isn't that it's radical it's that he said it.

He's going to need to go back to the Darth Vader academy of peasant debt peonage for a refresher course on how to rule the peasants methinks...

http://en.wikipedia.org/wiki/Thomas_M._Hoenig

He has taught at UMKC where Bill Black is at, maybe they have coffee?

http://en.wikipedia.org/wiki/William_K._Black

Hoenig as FED Chair, William Black with subpeona power, hire Spitzer as a consultant, and we can posse up on these biches.

LVG · February 23rd, 2011, 02:41 PM

Looks promising. Very promising.

D-Dogg · February 28th, 2011, 04:24 PM

jefftheshark · March 1st, 2011, 06:44 PM

Now Great Britain's equivilent to Bernanke is chiming in like Hoenig.

Here's the headline and the LINK

Anger at the banks is justified, Mervyn King says

The Governor of the Bank of England, Mervyn King, has expressed "surprise" that the public is not more angry with the bankers who caused the recession.

In some of his strongest language yet, Mervyn King today claimed the fall in households' living standards was the fault of the financial services sector and he expressed sympathy that innocent families paying the price.

"The people whose jobs were destroyed were in no way responsible for the excesses of the financial sector and the crisis that followed," he told MPs on the Treasury Select Committee.

In most aspects, he said, the economy had been on a sound footing before the crisis. Previous downturns were often caused by inefficiencies or weak management and were useful opportunities to improve systems. "None of that applied in this crisis," he said. "We had quite a successfully operating economy."

The people who are now suffering "did not get bonuses of the scale people in the financial sector got". The financial crisis may have occurred two years ago but, as austerity measures kick in, "the cost is now being felt", he said.

It remains "a big political problem", he added: "I'm surprised the real anger hasn't been greater than it has."

*************

I wonder if people are beginning to think they need to be on the other side of the guillotine when the SHTF.

I'm kidding, but I'm kinda not - I'm not predicting anarchy but at a certain point people are going to begin to look for the villains in this little drama. Bankers, of the Wall Street variety are going to be handy targets for the masses' anger. It's not here yet, and who knows if it will ever arrive (and no wally, I'm not hoping for it even if you think I am

) but $4 gas is going to make things difficult for Central Bankers to pretend that inflation is under control.

JTS

conraddobler · March 2nd, 2011, 07:47 AM

Quote:

Originally Posted by jefftheshark

Now Great Britain's equivilent to Bernanke is chiming in like Hoenig.

Here's the headline and the LINK

Anger at the banks is justified, Mervyn King says

The Governor of the Bank of England, Mervyn King, has expressed "surprise" that the public is not more angry with the bankers who caused the recession.

In some of his strongest language yet, Mervyn King today claimed the fall in households' living standards was the fault of the financial services sector and he expressed sympathy that innocent families paying the price.

"The people whose jobs were destroyed were in no way responsible for the excesses of the financial sector and the crisis that followed," he told MPs on the Treasury Select Committee.

In most aspects, he said, the economy had been on a sound footing before the crisis. Previous downturns were often caused by inefficiencies or weak management and were useful opportunities to improve systems. "None of that applied in this crisis," he said. "We had quite a successfully operating economy."

The people who are now suffering "did not get bonuses of the scale people in the financial sector got". The financial crisis may have occurred two years ago but, as austerity measures kick in, "the cost is now being felt", he said.

It remains "a big political problem", he added: "I'm surprised the real anger hasn't been greater than it has."

*************

I wonder if people are beginning to think they need to be on the other side of the guillotine when the SHTF.

I'm kidding, but I'm kinda not - I'm not predicting anarchy but at a certain point people are going to begin to look for the villains in this little drama. Bankers, of the Wall Street variety are going to be handy targets for the masses' anger. It's not here yet, and who knows if it will ever arrive (and no wally, I'm not hoping for it even if you think I am

) but $4 gas is going to make things difficult for Central Bankers to pretend that inflation is under control.

JTS

Nothing will happen until the beer runs out Nascar tracks are quiet and the NFL dosen't kick off and the Idol set goes dark.

What I got from that snippet you put up there from King was Horry Sheet, if we knew you'd be this ok with being financially raped we'd of done this a long time ago.