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Tuesday, November 12, 2013

Confessions of a Credit Easer

A mea culpa from the manager of the Federal Reserve's mortgage-backed security purchase program:
Confessions of a Quantitative Easer

We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.

I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.

The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."

My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed's trading floor? The job: managing what was at the heart of QE's bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.

This was a dream job, but I hesitated. And it wasn't just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank's credibility, and I had come to believe that the Fed's independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp. I could also see that they desperately needed reinforcements. I took a leap of faith.

In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.

It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.
If you've read RGD, (published in 2009), then you are aware that even at the time it was obvious that the neither the Fed nor the White House was trying to help home buyers. They could have simply written off the debts owed by mortgage holders, but instead, they funneled trillions to Wall Street.

This proves, once more, that the Federal Reserve has zero interest in fixing, saving, or otherwise improving the US economy. It has other objectives, other goals, and it is a category error to even discuss the Fed's future actions in terms of whether they will be good for the economy or not.

To do so is like discussing whether the future run/pass ratio of the New England Patriots will be good for the New York Yankees. It's not even relevant to the discussion except perhaps as an unintended consequence.  And notice that they changed the name from credit easing to quantitative easing just to make the concept harder to grasp for the average American. Simple, but effective, because MPAI.

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95 Comments:

Anonymous Joshua_D November 12, 2013 1:10 PM  

Damn bankstas.

Anonymous Josh November 12, 2013 1:13 PM  

It has other objectives, other goals, and it is a category error to even discuss the Fed's future actions in terms of whether they will be good for the economy or not.

Obviously some of those include enriching the wall street banks and enabling deficit spending by the government. What do you think are some other ones?

Anonymous Huckleberry - est. 1977 November 12, 2013 1:15 PM  

In practical terms, I can envision the inflationary collapse and what it will look like.
I'm admittedly having trouble fully imagining the deflationary collapse (would it be a collapse?).
I have a sinking feeling it won't be suddenly like 1922, where I can get a hot shave and a haircut for two bits...

Blogger Giraffe November 12, 2013 1:15 PM  

I say we declare a mortgage jubilee. As soon as I'm done refinancing.

Anonymous MrGreenMan November 12, 2013 1:21 PM  

What did Dracula say? Admiral Boorda committed suicide for less.

Anonymous Josh November 12, 2013 1:25 PM  

I have a sinking feeling it won't be suddenly like 1922, where I can get a hot shave and a haircut for two bits...

Perhaps it will be a "gentleman's haircut" like the upcoming "gentleman's latte"

Blogger JartStar November 12, 2013 1:29 PM  

This also might mean most of the ammo has been spent in propping up Wall Street. If there's another large crash I don't think QE will make very much difference so there will probably be long term capital losses.

Blogger Giraffe November 12, 2013 1:39 PM  

So what does the Fed get out of this? Basically they are buying a bunch of junk to recapitalize wall street, but what is their angle? Do they leave the government on the hook? Do they end up in a bunker in nonextradition country smoking cubans and watching the world burn?

I guess I am seconding Josh. What are their goals?

Anonymous Brother Thomas November 12, 2013 1:42 PM  

Damn... it's feels good to be a banksta!
Keep that money flow-n.
My porfolio is grow'n.

Anonymous Porky November 12, 2013 1:47 PM  

Hey, you're starting to come around. Bravo.

Blogger JartStar November 12, 2013 1:49 PM  

Their goals are: bare survival, remaining in power, accumulating more power and wealth in that order. They are no different than any other power seeking group in this regard.

Anonymous Daniel November 12, 2013 1:57 PM  

I guess I am seconding Josh. What are their goals?

Believe it or not... Alchemy.

The only part of the letter where Keynes is lying is when he says the dark arts fall well outside his regular field of study.

Anonymous Salt November 12, 2013 1:57 PM  

In the world of digital credit a deflationary collapse would drive a stake through their hearts as Cash becomes King. Makes me wonder just why there is so much emphasis on redesigning the new bills if digital is the wave of the future and Nate's hyper-inflation is just around the corner?

Anonymous VD November 12, 2013 2:05 PM  

Hey, you're starting to come around. Bravo.

Who is starting to come around to what?

Blogger Giraffe November 12, 2013 2:06 PM  

I can understand buying mortgages. You can foreclose. There is real property. I don't understand buying Treasuries. Any fool can see the government will default. I understand this is over my head, as I don't understand what they are buying these treasuries with, except conjured money. So why? Unless they are buying time to collect other assets.

Blogger El Borak November 12, 2013 2:08 PM  

...they changed the name from credit easing to quantitative easing just to make the concept harder to grasp for the average American.

Even if you knew nothing about the Federal Reserve, its share structure, its history, its personnel, if the only thing you knew about the Fed was the sentence above, you could reasonably conclude that it was as crooked as a bag of snakes.

Blogger Giraffe November 12, 2013 2:08 PM  

Believe it or not... Alchemy.

So they're turning useless paper into gold?

Anonymous Porky November 12, 2013 2:21 PM  

Who is starting to come around to what?

I mean that you used to say they were clueless, stupid buffoons trying hopelessly to fix the economy. At least now you acknowledge that they have no interest in trying to fix the economy.

Anonymous Noah B. November 12, 2013 2:32 PM  

Absurd, Porky. Sticking with a position you've held for more than four years isn't "coming around." It's standing by what you believe.

Blogger RobertT November 12, 2013 2:33 PM  

You can't trust anyone in government. I find Ted Cruz and Mike Lee interesting, but i don't trust them. DC has a way of winning over everyone who goes there. Witness other former leading lights like Marco Rubio and Rand Paul, and a leading light from a long time ago ... John Boehner. Eventually they all drift away. Such is the power of peer pressure.

Anonymous Josh November 12, 2013 2:37 PM  

I mean that you used to say they were clueless, stupid buffoons trying hopelessly to fix the economy. At least now you acknowledge that they have no interest in trying to fix the economy.

Did you read RGD?

Can you cite five examples of Vox stating that the goal of the Fed was to fix the economy?

Anonymous Holmwood November 12, 2013 2:39 PM  

Any fool can see the government will default
Technically they won't default. Given that the US issues debt in its own sovereign currency, they never need to default. They are simply likely to pay off that debt with increasingly worthless pieces of green paper. I certainly concede the result to the lender is similar; a giant involuntary haircut.

As with Wargames, the only way to win is not to play unless you're a bankster.

On the note of increasingly worthless green pieces of paper, it's interesting to contrast the C$ vs the US$ over the last 5 years. Canada's had a Conservative (probably centre-left by most US standards, though far to the right of Republicans in Washington when it comes to spending) government, and the US has had President Obama.

In that time, the C$ has gone from $0.79 or so to as high as $1.10 and currently trades about $.95. (Sure, some of that is because Canada has a resource-heavy economy, but one suspects a great deal of it is due to better currency and fiscal management)

Canada, needless to say, is not printing money and her finance minister recently categorized quantitative easing as "printing money" and a bad idea.

Interestingly and somewhat sadly (I suppose central bankers stick together), the Bank of Canada (Canada's equivalent of the Fed) disagrees and thinks QE is just dandy for the US.

Anonymous Daniel November 12, 2013 2:43 PM  

So they're turning useless paper into gold?

No. Real alchemy - the Newtonian kind, the sort of thing that Keynes described as "the queer stuff." Occult studies - the Origin of Monarchies - power structures and magickal experiments on human kind.

Altering matter, not for peasant games of get rich quick, but dominion. Now, of course, one of the side effects that occur when a secret body begins to pursue such matters happens to be financial shenanigans in your favor...but that was always a symptom, not the end-game.

Keynes on Newton:

"Why do I call him a magician? Because he looked on the whole universe and all that is in it as a riddle, as a secret which could be read by applying pure thought to certain evidence, certain mystic clues which God had lain about the world to allow a sort of philosopher's treasure hunt to the esoteric brotherhood."

Blogger Nate November 12, 2013 2:48 PM  

Shut up, Porky.

Anonymous justsomeonenotimportant November 12, 2013 2:49 PM  

Well, we could just write off the debt. What does it pay, to pay something off that is odious in the first place? To do so, is to admit your culpability.Then you are no different than the bad guy. It's not we are talking about a kidnapped child here. We are talking about holding an entire nation hostage. So, do you pay the ransom? Then what do you do. To wait for the inevitable collapse, while they think and have you fooled they hold all the aces, could take a century. In the meantime, you are being bled dry. Time to call their bluff. Are you a slave, or want to be set free? We are not talking the second coming of Christ. This is practicing "civil religion," for the here and now.

A Remedy (Economic and otherwise)

The Real Reagan

Anonymous Amir Larijani November 12, 2013 2:51 PM  

Vox: sounds like the book you predicted Bernanke would write: What the Fucking Fuck Was I Thinking?

Anonymous Josh November 12, 2013 2:53 PM  

See Daniel, look what you did, summoning dread!

Blogger Nate November 12, 2013 2:58 PM  

Links to Veteren's Today should be banned until the military arrests Bernake.

Anonymous Josh November 12, 2013 2:58 PM  

Dread, is it too much to ask for you to refrain from linking items written at approximately a fourth grade level?

Anonymous Daniel November 12, 2013 3:00 PM  

See Daniel, look what you did, summoning dread!

Oh man. I think I reversed the polarity in the conjuring section.

I was going for Wheeler.

But seriously. The Fed is the Philosopher's Stone, and justly guarded for its secrecy and posterity.

And...like Soylent Green, it consists entirely of people.

Blogger Nate November 12, 2013 3:02 PM  

"I was going for Wheeler."

then you should've mentioned young boys... sparta... or joos.

Anonymous Porky November 12, 2013 3:05 PM  

Absurd, Porky. Sticking with a position you've held for more than four years isn't "coming around." It's standing by what you believe.

Well, I don't know about 4 years ago. I just know that he fairly recently called them "completely clueless" about the economic situation. I'm glad to see him changing his tune about this because I think it's important.

Anonymous Josh November 12, 2013 3:15 PM  

Wheeler would say that none discussion is actually economics because economics comes from the Greek a oikonomika, which means managing a household and obviously the Fed isn't managing a household and neither is wall street.

Anonymous VD November 12, 2013 3:18 PM  

I mean that you used to say they were clueless, stupid buffoons trying hopelessly to fix the economy. At least now you acknowledge that they have no interest in trying to fix the economy.

In your usual rush to show that you have a superior grasp of all things, the only thing you have managed to demonstrate is that you did not read RGD. Published in 2009.

Anonymous VD November 12, 2013 3:19 PM  

I just know that he fairly recently called them "completely clueless" about the economic situation. I'm glad to see him changing his tune about this because I think it's important.

I'm not changing my tune at all. They are completely clueless about the economic situation. You've set up a false dichotomy. As it happens, they are completely clueless about the economic situation AND they aren't primarily interested in trying to fix it either.

Anonymous Porky November 12, 2013 3:25 PM  

Perhaps I'm mistaken. Can you explain what you meant when you said:

"I see no chance, none, that these maleducated academic idiots even posses the conceptual tools to understand the current situation, let alone have the ability to do anything about it.

It's like watching monkeys try to repair a space shuttle."

Today's post would indicate that you now believe that they aren't trying to repair the space shuttle at all.

Anonymous Daniel November 12, 2013 3:27 PM  

Someone call an exorcist: Wheeler has possessed Josh.

A Protestant exorcist, preferably.

Anonymous Salt November 12, 2013 3:29 PM  

Porky, this is for you.

Anonymous Daniel November 12, 2013 3:32 PM  

Porky...my condolences on your recent head injury.

Anonymous Concerned Rabbit Hunter November 12, 2013 3:37 PM  

It seems that interest can be used to enslave people.

Anonymous Porky November 12, 2013 3:45 PM  

Daniel: "Porky...my condolences on your recent head injury."

Aww, Daniel! Are you white-knighting for Vox again? So cute!

Blogger JartStar November 12, 2013 3:53 PM  

Porky is what happens when you give your opponents evil genius status.

It makes you think everything which transpires can only ever get worse and it is all carefully orchestrated and planned; with good never having any chance at all until Last Judgment and probably not then either.

Anonymous Josh November 12, 2013 3:55 PM  

Porky is what happens when you give your opponents evil genius status.

Bingo

Anonymous bob k. mando November 12, 2013 4:26 PM  

Porky November 12, 2013 3:05 PM
I'm glad to see him changing his tune about this because I think it's important.



there's no particular reason that BOTH can't be true simultaneously. a - that most of those, even in banking and on wall street, don't understand that their policies CAN'T produce the results they claim. MPAI, after all.
b - that there are those at the top who are gifted at manipulating the masses into actions which WILL benefit someone ... just not the quite the people or in quite the way that the masses believe.


it's not even necessary that group B have a real, functional understanding of all the implications of what they are doing or a reasonable coherent framework for making their decisions. malfeasance does not require competence. go down to your local jail and laugh at the two bit thugs who got caught holding up the convenience store.

Blogger Nate November 12, 2013 4:32 PM  

"Aww, Daniel! Are you white-knighting for Vox again? So cute!"

Big talk by someone that's to chicken shit to use his real name because he doesn't want to offend his liberal friends.

Blogger tz November 12, 2013 4:35 PM  

This proves, once more, that the Federal Reserve has zero interest in fixing, saving, or otherwise improving the US economy.

Talk about a zero-interest policy...

Anonymous Porky November 12, 2013 4:36 PM  

It makes you think everything which transpires can only ever get worse and it is all carefully orchestrated and planned;

Even Vox has now said they have other goals in mind. Do you suppose these are evil goals, JartStar?

... with good never having any chance at all until Last Judgment and probably not then either.

You're the first one to touch on the heart of the argument. If this is truly a spiritual battle then how would you proceed?

Anonymous Noah B. November 12, 2013 4:43 PM  

Porky, do you think collectivists who start out promising to build a workers' paradise actually set out with evil plans to destroy their economies and kill people by the millions? I don't. I just think the combination of deception, hubris, and greed is a particularly bad one that almost inevitably leads to tragic results.

Anonymous Porky November 12, 2013 4:45 PM  

@bob k. mando

there's no particular reason that BOTH can't be true simultaneously. a - that most of those, even in banking and on wall street, don't understand that their policies CAN'T produce the results they claim. MPAI, after all.
b - that there are those at the top who are gifted at manipulating the masses into actions which WILL benefit someone ... just not the quite the people or in quite the way that the masses believe.


Two problems: 1st, most people are not idiots, especially in the financial sector. 2nd, Vox wasn't referring to the average Wall Street hack. He was referring to the folks at the top when he described them as "monkeys trying to fix the space shuttle".

I think it's an important thing to hammer out before we embark on spiritual warfare. Is the enemy really, really keystone cops bumbling stupid, or is the enemy knowingly leading us like sheep to the slaughterhouse?

Blogger Nate November 12, 2013 4:48 PM  

"You're the first one to touch on the heart of the argument. If this is truly a spiritual battle then how would you proceed?"

No idiot. The heart of the argument is that you don't understand that there are two different populations and you are confusing the two.

There are academics like Krugman... who are giving advice on fixing the economy... and then there is the Fed.

Anonymous Josh November 12, 2013 4:49 PM  

Porky, I asked you this question earlier in the thread:

Can you cite five examples of Vox stating that the goal of the Fed was to fix the economy?

Anonymous Noah B. November 12, 2013 4:52 PM  

"I think it's an important thing to hammer out before we embark on spiritual warfare. Is the enemy really, really keystone cops bumbling stupid, or is the enemy knowingly leading us like sheep to the slaughterhouse?"

If someone is leading you toward the slaughterhouse, why are you wasting time trying to judge their intent?

Blogger JartStar November 12, 2013 4:53 PM  

Do you suppose these are evil goals, JartStar?

Some are, some aren't as they are just misguided. "Never attribute to malice that which is adequately explained by stupidity."

If this is truly a spiritual battle then how would you proceed?

By not assuming defeat before a battle begins, or during any part of the war, and fighting to the last.

It's not binary Porky, as people can be both stupid and evil at the same time. Your mistake as Vox has pointed out is tending to attribute every stupid act as part of a unstoppable evil scheme. I believe this is intellectually lazy and arguably cowardly. Why bother try to do good if evil always wins?

Anonymous Mavwreck November 12, 2013 4:55 PM  

...it was obvious that the neither the Fed nor the White House was trying to help home buyers. They could have simply written off the debts owed by mortgage holders, but instead, they funneled trillions to Wall Street.

Writing off mortgages would have directly helped home buyers. However, wouldn't that also have caused some huge problems in the financial markets? And wouldn't those disruptions have caused a lot of pain for home buyers (along with a lot of other people)?

Note - I'm not saying that quantitative easing was meant to help ordinary people. I just think that mortgage write-offs would have caused some major pain to ordinary people, even if they weren't the direct "losers".

Anonymous Titus Didius Tacitus November 12, 2013 4:57 PM  

Porky: "I think it's an important thing to hammer out before we embark on spiritual warfare. Is the enemy really, really keystone cops bumbling stupid, or is the enemy knowingly leading us like sheep to the slaughterhouse?"

Do you think people like Peter Sullivan know what they are doing?

Anonymous Josh November 12, 2013 5:02 PM  

Writing off mortgages would have directly helped home buyers. However, wouldn't that also have caused some huge problems in the financial markets? And wouldn't those disruptions have caused a lot of pain for home buyers (along with a lot of other people)?

How would it have hurt home buyers?

And it would have been cheaper than TARP and the other mechanisms turned out to be. With less distortions in the market.

Anonymous Josh November 12, 2013 5:04 PM  

Do you think people like Peter Sullivan know what they are doing?

He's either going to say "yes" or "no, but the people telling him what to say do"

Anonymous Porky November 12, 2013 5:14 PM  

Noah B. "Porky, do you think collectivists who start out promising to build a workers' paradise actually set out with evil plans to destroy their economies and kill people by the millions? I don't."

Is the goal to steal, kill and destroy? Absolutely.

Judge them by their actions, not their stated goals. If Stalin's goal was to increase farm production why would he murder or imprison hundreds of thousands of his most successful farmers?

Anonymous Josh November 12, 2013 5:18 PM  

Is the goal to steal, kill and destroy? Absolutely.

Whose goal?

Anonymous Porky November 12, 2013 5:26 PM  

@JartStar: "It's not binary Porky, as people can be both stupid and evil at the same time. Your mistake as Vox has pointed out is tending to attribute every stupid act as part of a unstoppable evil scheme."

Never said "unstoppable". And you are generalizing.

Look, if you come home after a night out and your baby has finished off a box of Oreo's, then your babysitter is stupid.

If you come home and your baby has cigarette burns on his butt, your babysitter is evil.

If your baby dies months later because his formula was laced with a precisely measured amount of arsenic, then your babysitter is an evil genius.

Vox's problem is that he is sitting there watching the baby die and complaining about how his babysitter is an idiot. After all, nobody with half a brain would feed a baby arsenic, right?

Anyhow, you suggested we fight to the last. I agree. How do we do this?


Anonymous Mavwreck November 12, 2013 5:34 PM  

Josh asked: How would it (financial market problems caused by mortgage write-offs) have hurt home buyers?

It wouldn't have directly hurt people who'd already bought homes (those who got their mortgages written off). However, the damage it would have caused to banks and the like would probably have meant any future home buyers would have a lot more trouble getting loans. I also think it would have caused worse overall pain to the economy then we suffered in the wake of the 2008 mess.

I guess, then, that it would only have hurt previous home buyers inasmuch as they're part of my "ordinary people" group.

In fact, now that I'm thinking about it, I think this question applies more to TARP than the subsequent QE rounds.

Anonymous Porky November 12, 2013 5:35 PM  

@Josh: "Can you cite five examples of Vox stating that the goal of the Fed was to fix the economy?"

No. I am referring to the post where he said that watching the Fed was like watching monkeys trying to repair a space shuttle. August, I believe.

"Whose goal?"

TPTB.

Anonymous Josh November 12, 2013 5:40 PM  

Who are TPTB? Do you have any names?

Anonymous Josh November 12, 2013 5:43 PM  

Vox's monkey quote:

I see no chance, none, that these maleducated academic idiots even posses the conceptual tools to understand the current situation, let alone have the ability to do anything about it.

It's like watching monkeys try to repair a space shuttle. Which wouldn't be so bad if we weren't all out in space inside the shuttle.


He doesn't make any claims that the Fed is trying to fix the economy.

He's saying they, particularly Yellen, have as much knowledge about what's actually going on as monkeys do about the space shuttle.

Blogger Desiderius November 12, 2013 5:43 PM  

Porky,

An elite who takes the actions this elite has will consolidate their own power by so doing, mostly by ruthlessly destroying competing bases of power, real or imagined.

Whether or not they conspired to do so is entirely beside the point. There's a reason why human minds evolved to be so sensitive to such dynamics (often mistaken as being easily taken in by conspiracy theories). Those minds who were inclined to be oblivious to such dynamics didn't make it.

It may be a useful counter-strategy to portray them as stupid - we all have out blind-spots, and they may lack the usual distribution of intelligence levels a random group (say, the Boston phone book) would display due to an ideology that attacks excellence.

What they have in common is the Will to Power. Few started there - good intentions and all that - but all have at some point succumbed, or they would no longer be playing for that team. The Will to Power is pretty much the modern flavor of evil. Ennui the postmodern.

Anonymous Porky November 12, 2013 5:48 PM  

Titus Didius: "Do you think people like Peter Sutherland know what they are doing?"

Lol. Of course he does.

Anonymous Josh November 12, 2013 5:53 PM  

Called it.

Anonymous Porky November 12, 2013 5:55 PM  

@Josh: "He doesn't make any claims that the Fed is trying to fix the economy."

So what does the space shuttle (with us inside) represent in his little metaphor?

"Who are TPTB? Do you have any names?"

Somebody just mentioned Sutherland.

Anonymous Porky November 12, 2013 6:02 PM  

Whether or not they conspired to do so is entirely beside the point.

When PP opens an abortion clinic they never say that their purpose is to kill babies. They say they are providing pre-natal care to pregnant women. Should I just assume they are just really, really stupid morons at pre-natal care?

And when the Fed siphons off billions to Wall Street should I just assume that they are really really stupid morons when it comes to finance?

Blogger Czeslaw Milosz November 12, 2013 6:05 PM  

One can create the illusion they intend to do something while simultaneously have neither a clue of what they are doing nor the consequences. Go read Don Quijote.

Anonymous Titus Didius Tacitus November 12, 2013 6:11 PM  

In the linked Zero Hedge article, Andrew Huszar didn't say the Fed was stupid. He said they had ceased to have independence of mind in relation to Wall Street.

Anonymous Porky November 12, 2013 6:14 PM  

Czeslaw Milosz:"One can create the illusion they intend to do something while simultaneously have neither a clue of what they are doing nor the consequences. Go read Don Quijote."

And everyone is serving somebody. Go listen to Bob Dylan.

Blogger Desiderius November 12, 2013 6:37 PM  

"When PP opens an abortion clinic they never say that their purpose is to kill babies. They say they are providing pre-natal care to pregnant women. Should I just assume they are just really, really stupid morons at pre-natal care?"

They do provide pre-natal care to pregnant women. That said, the level of cognitive dissonance produced by everything else they do significantly degrades the functional intelligence of PP's advocates and practitioners.

"And when the Fed siphons off billions to Wall Street should I just assume that they are really really stupid morons when it comes to finance?"

Many seem to have been attracted to the field recently, perhaps due to the atmosphere of general chaos engendered by the siphoning. It is not an either/or proposition. The goal is power, and not temporary power either. I don't see that working out medium term, let alone long. If they're evil geniuses, so were Cain and Esau.

Anonymous Titus Didius Tacitus November 12, 2013 6:46 PM  

Desiderius: "If they're evil geniuses, so were Cain and Esau."

Esau sold his birth-right to Jacob. The Fed gave white, Main Street America's birthright to Wall Street.

If you consider the ethnicity dominant in both the Fed and Wall Street, that's as if Jacob gave the birth-right to himself, without even a mess of pottage for Esau. Yes, that counts as evil genius.

Blogger Desiderius November 12, 2013 10:20 PM  

Uh, that birthright has held up for going on 3500ish years.

The Wall Street one will be lucky to last ten.

Mess of pottage or just a mess.

Blogger Nate November 12, 2013 10:47 PM  

"Lol. Of course he does. "

Sugartits... the fact that someone doesn't understand what's wrong with the economy has nothing to do with the claim that they are therefore wrecking it deliberately.

You keep talking about the powers that be... but the Powers that Be like the status quo dumbass. They like it because they are the Powers that Be. And collapsing the system... would put that in jeopardy.

They aren't trying to collapse anything any more than they are trying to fix something.

They are just trying to get richer.

Anonymous Titus Didius Tacitus November 12, 2013 11:06 PM  

"I like how things are; I will not change anything." That is how un-aggressive people think.

But the powers that be are not un-aggressive. They are highly aggressive.

It's a scorpion-and-frog scenario, unhappily for the frog.

Blogger Desiderius November 12, 2013 11:13 PM  

Would you characterize the scorpion's strategy as intelligent?

Blogger Nate November 12, 2013 11:27 PM  

""I like how things are; I will not change anything." That is how un-aggressive people think.

But the powers that be are not un-aggressive. They are highly aggressive."

That's cute but that's not what I said.

I said didn't say they were trying to keep things the exact same. I said they were trying to get richer.

Which is what they are doing.

The last thing they want however... is a massive system collapse... because when that happens... they will no longer be The Powers That Be.

Blogger Nate November 12, 2013 11:27 PM  

The people pushing for radical change are NOT TPTB.... They are the people that want collapse because they aspire to BE TPTB.

Anonymous Titus Didius Tacitus November 12, 2013 11:32 PM  

Desiderius: "Would you characterize the scorpion's strategy as intelligent?"

Within a bounded rationality.

Anonymous Titus Didius Tacitus November 12, 2013 11:37 PM  

Nate: "I said didn't say they were trying to keep things the exact same. I said they were trying to get richer."

You said:

Nate: "You keep talking about the powers that be... but the Powers that Be like the status quo dumbass."

You were rude and wrong.

A strategy based on liking the status quo is un-aggressive. An aggressive, revolutionary strategy is not just about enriching oneself.

Anonymous Titus Didius Tacitus November 12, 2013 11:41 PM  

Nate: "The people pushing for radical change are NOT TPTB.... They are the people that want collapse because they aspire to BE TPTB."

No, the people pushing radical change are the powers that be. That's why very radical changes without historical precedent are going ahead smoothly. This is a revolution from above.

Un-aggressive people would think, "I don't want a new deal; I have all the cards!"

But the powers that be are not un-aggressive. They are highly aggressive.

Anonymous Roundtine November 12, 2013 11:58 PM  

Titus,

If I read you right you are conflating the leftist political agitators with Wall Street. Wall Street has captured the Fed and the federal government. The bankers are in charge; leftist idiots are allowed to make hay while the Sun shines.

Anonymous Titus Didius Tacitus November 13, 2013 12:11 AM  

I am identifying the powers that be with those who push profoundly radical changes such as mass immigration. That is really radical. And billionaires for open borders are a fact.

The only people associated with Occupy Wall Street that showed potential to join the real revolutionaries, that is the powers that be on Wall Street itself, are those that gathered in contributions, used "progressive stacks" to stifle discussion of where the money went, and ripped off their fellow protesters. That shows talent and the right sort of attitude.

The rest are no more significant than the excrement that had to be scraped off the streets after they departed from their unsanitary camps.

When it came time to deliver their demands and state their agenda, the Occupiers were empty.

But the real radicals, the powers that be, have endless hunger. And aggressiveness, and hatred, and historic grievances too.

Anonymous Peter Garstig November 13, 2013 8:51 AM  

A strategy based on liking the status quo is un-aggressive.

Now that's dumb. One can well be very agressive to assure the status quo.

Responding to what was actually said, and not to what you think was meant, would add value to your statements. Agressiveness has nothing to do with the argument. In case you missed it: assuring the status quo makes 'them' richer.

Anonymous Titus Didius Tacitus November 13, 2013 9:07 AM  

Peter Garstig: "Now that's dumb. One can well be very agressive to assure the status quo."

Tactically yes. Strategically "I have and I hold" is a conservative posture, not an aggressive one. Stop playing dumb about the difference.

Peter Garstig: "Responding to what was actually said, and not to what you think was meant, would add value to your statements. Agressiveness has nothing to do with the argument. In case you missed it: assuring the status quo makes 'them' richer."

Aggressiveness has everything to do with the argument. Without it, there is no plausible explanation for why the powers that be are not in fact conserving the system and more importantly the population that enriches them.

Blogger Nate November 13, 2013 9:19 AM  

Titus...

Radical immigration IS the status quo and has been off and on since before 1900. You literally don't understand the arguments being made.

Anonymous Stilicho November 13, 2013 12:00 PM  

And when the Fed siphons off billions to Wall Street should I just assume that they are really really stupid morons when it comes to finance?

1) the primary goal of the Fed is to keep the banksters at the top of the food chain so that they can continue to enrich themselves at the expense of everyone else. QE has been a success in this endeavor by allowing the banks to unload bad MBS', obtain zero interest loans which are used to generate returns via treasuries (and front-running Fed on same), proprietary trading in the stock market, derivatives bets, etc. AS pointed out on this blog numerous times, the Z1 report shows the massive transfer of debt from the banks to the federal gov't. The banks are still insolvent, but they are relatively far better off than they were in 2008.

2) Now, it is politically expedient for the Fed to make noises about helping the economy, main street, etc. It is also true that a booming economy or economic expansion would help the Fed and its constituent banks by masking some of the underlying problems with the system and because such expansion helps prompt a credit expansion that also enriches the banks.

3) In short: the Fed wishes to first keep the banks afloat and in their privileged position, and then create another boom in credit expansion to further enrich the banks. They've accomplished the first (for now at least) and failed miserably at the second. They have an evil purpose and have cleverly accomplished part of it, but failed at the second part because their keynesian-monetarist theories are based on the false assumptions and static models that require those assumptions to function.

4) The "evil genius" successfully funnels money to his friends while convincing much of the country it's for their own good, yet fails to achieve his other goal because of his ignorance of how economies function.

Anonymous Porky November 13, 2013 2:11 PM  

The "evil genius" successfully funnels money to his friends while convincing much of the country it's for their own good, yet fails to achieve his other goal because of his ignorance of how economies function.

If they wanted credit expansion they could simply alter the rules of the game. They haven't, because they don't want it.

This is a managed decline, Stilicho.

Anonymous Stilicho November 13, 2013 5:47 PM  

If they wanted credit expansion they could simply alter the rules of the game. They haven't, because they don't want it.

Now you just sound like Nate. Why don't they want a credit expansion?

Anonymous Porky November 13, 2013 9:01 PM  

Why don't they want a credit expansion?

Because they want the middle class to die an excruciating, slow, horrible, and degrading death.

Anonymous Stilicho November 13, 2013 9:21 PM  

Dude, the middle class is the victim of credit expansion. It is what allows the banksters to suck the life blood from it.

Anonymous Porky November 13, 2013 11:05 PM  

Ha! You ain't seen nuthin yet! When the crunch hits that's when the sucking stops and the feeding frenzy begins.

Anonymous Dr. Doom November 14, 2013 12:22 AM  

They keep poking the Tiger! These are NOT evil geniuses! Evil yes, but rather pathetically STUPID! Conspiracies do not require intelligence only complicit parties involved in illegal activities.
It is true that the system is collapsing, but this is the result not of planning but GREED! The bankster vampires cannot ever get enough Blood Money! They LOVE Money, and cannot ever have enough of it.
I've often wondered why they love Money so much, as they refuse to ever spend it. I do not believe these creatures understand the CONCEPT of Money as a device for trade.
The Holy Bible says that the Love of Money is the Root of All Evil, and the Ancient Greek Philosophers said that Gold was a means to an end - but not an end unto itself.
Capitalism as these cretins practice it has Money as the End All and Be All. Its all about Money! Even power is just a device through which they acquire Money.
The Destruction of the Fiat Currencies through Hyperinflation is the Inevitable Result of their desire for more and more Money! I really do not believe that any of them understand what Money is or even how it works! For them it is just a Obsessive Desire!

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