barrons

Good.


TheHill.com - McCain says he believes U.S. is in a recession

razorsharp

This is precisely why I don't like McCain. One guy at Bear Stearns cashes out prior to a Federal Reserve bailout, and all of a sudden everyone on Wall Street is very greedy. In case McCain forgot, America has a capitalist economy. If the guy at Bear Stearns engaged in illegal behavior, then prosecute him. The fact that people all Wall Street want to make money doesn't make them any more greedy than the average Joe on the street who would like to see his salary increased.

And someone needs to tell McCain that the Federal Reserve is not the federal government.

dstark

There is no Federal Reserve without the federal government.

So nobody has to tell McCain anything on that subject.


As someone who has worked in the financial markets for a very long time, I see Wall Street as more greedy than the average person.

It's not even close.

I'm kind of liking what McCain is saying about the economy and the markets in the last couple of weeks. I like his views better than Clinton's or Obama's right now.

It's just that war and the military, industrial complex.....

Oh, and Bear Stearns is just a small part of the financial problems.

razorsharp

That does not make the federal reserve the federal government. The owners of the Federal Reserve are the member banks.

Following McCain's logic would be like saying someone who got an FHA insured loan has a house owned by the federal government.

The fact that McCain can't tell the difference is sort of like his inability to tell the difference between Suni's Shiates and Iranians.

dstark

Razorsharp, you keep looking at the tiny meaningless details. Tell me how McCain's description of the Federal Reserve affects the economy or financial markets.

barrons

I think the average person is far more honest than the average Wall Street person. Most businesses and professions have some code of ethics. WS seems not to have any.

dstark

Barrons, I think you are right.

FRB: FAQs: Federal Reserve System

"Who owns the Federal Reserve?
The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

razorsharp

The article is about McCain, it is not about the economy or financial markets. McCain wants to be president but he can't distinguish between a bailout from the Federal Reserve and a bailout from the federal government.

Wall Street in the financial markets are far more heavily regulated than any professions or regular businesses. But the last thing needed at this time is more regulation of Wall Street.

mini

I agree. Just let our owners decide. They work for the betterment of all of us who are less worthy.

razorsharp

The Fed can call itself whatever it wishes, but the fact remains that government agencies do not issue stock. The Federal Reserve is not a part of the Federal government. It's shareholders are the member banks, not the taxpayers of America.

dstark

"The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year."

"The Federal Reserve's ultimate accountability is to Congress, which at any time can amend the Federal Reserve Act. Legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives, and twice annually on its plans for monetary policy to the banking committees of Congress. Fed officials also testify before Congress when requested."

To repeat.....

"Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year."

And who appoints the Fed Chairman?

barrons

Outside of the securities laws WS has virtually no regulation. No capital ratio requirements, no fiduciary duty to the public.

UCBChemEGrad

The Fed does not issue stock but it prints money and lends to banks...in this case it lent money to investment bank JP Morgan to buyout Bear Stearns (the Fed had to bend the rules for this to happen). What did the Fed get for lending this money? The hot potato no one wants - mortgage backed securities - for collateral. If these securities go sour, ultimately it will be the American taxpayer that suffers...if the loans are repaid at a profit, taxpayers should get the benefit.

mini

"...if the loans are repaid at a profit, taxpayers should get the benefit."

But we will, we will! Just trust them!

UCBChemEGrad

^ LOL! Yes, we made a profit...it's being diverted to the Medicare expense bucket...*drop*...well that was spent wisely!