Wednesday, June 19

Fed can Wall Street searches do not stop.

Fed can Wall Street searches do not stop.
| By David Weidner, MarketWatch

Bettors against any form of central authority but lust after federal generosity. It's time for bankers and brokers Guide to confirm that they are beneficiaries of the system, not its victims.

The men and women of Wall Street lust is the Evangelist of the free market.

Whether it J.p.. Morgan Chase (JPM) Jamie Dimon regulations to criticize or Peter Schiff exhibition a another sky-is-falling warning or trade group- as the American Bankers Association-picking apart central banking, Wall Street message almost uniform is: back off. We have this.

But as the drugs Adviser, has a secret habit, they give away the industry's actions. And investors need to consider only the daily fluctuations in the market when a possible change in the policy of Federal Reserve is indicated.

Only Monday, the fed using a single word, "Cone" on its bond-buying program created a wave in coverage in the media, and also in the markets.

Wall Street is addicted to cheap money.

Since the Fed under Ben Bernanke his $85-billion-a-month-bond buying program in September 2012, the stock market on an absolute tear was announced. The Dow Jones industrial average ($INDU), the standard & poor's 500 index ($INX) and the Nasdaq composite index ($COMPX) are between 9% and 13%. Yields make it a great year. But that is in less than eight months.

Since it essentially overnight interest rates decreased in 2008 to zero, the Fed has tripled its balance sheet to $3.3 billion. Critics see the influx of cash into the economy as "Printing money" (it is), and they fear the shift will be congressional elections and in turn, the wealth of the nation and its citizens (it's not).

Meanwhile, Wall Street and the investment community-they realize any type of intervention-to renounce had the opposite reaction. The feeling is the Fed stimulus package through the back door was driven or is fueling an economic recovery (it's not).

This is not rocket science, nor is it anything new. Even in good economic times, the Fed's interest rate policy is precisely observed. It puts the trade agenda. And we all know that low-interest policy under former Fed Chairman Alan Greenspan set the table for a bubble in real estate and other credit assets, of which we ditch still out.

But it is reserve as an economic source, another to appreciate one thing and the Federal, to embrace it as arrogant and constricting force scourges. But that is exactly, what makes Wall Street. It rails against any form of central authority, but lust after his Freigiebigkeit--stimulus or bailouts.

And the last part is what really deserves attention. In the year 2011 on behalf of the Government of the first examination of the Federal Reserve. The idea was, measuring how much had extended the Central Bank on the so-called private financial sector to keep, solvents and ongoing.

The finding: $16 trillion in guarantees and money into the system, more than gross domestic product injected into the US. How money Center banking-driven by the toxic assets of investment banks-approached to reduce, uses the Central Bank, to extraordinary measures it support. Taxpayers put movement significant risk. Because if eroded confidence in the Fed or has his action does not work, eventually the economy into chaos would collapsed.

It is because of this intervention, the term "too big to fail" has become part of the national lexicon.

So-called private banks are really extensions of the Government, not the kind of free rolls capitalism, providing his leadership.

None of this is to say, that the Fed is never in question. Quite the contrary. As mentioned earlier, the Fed created interest-rate policy, tax along with Washington's promotion of home ownership, the economic bubble.

But ultimately, the Wall Street well into same height has seen. Their rallies have been moved to fed. An active Federal Reserve has been considered good for stock market investors. Also the bond markets beyond its interest-rate moves fuel pump or they, as many fear is happening now.

That is, why Wall Street must recognize that for all their criticism of the fed and regulation, the industry gets far more than there are. A good first step would be for banks and brokers Guide to confirm that they are beneficiaries of the system, not victims.

As in any recovery program is that to admit that you have a problem with the first step.

0 коммент.:

Post a Comment

Site Search