Posted on 12/04/2013 8:39:32 PM PST by Nachum
One of the few rebellious Fed heads, Richmond Fed President Jeffrey Lacker, fired another salvo when he was testifying at the House Judiciary Committees hearing. And he hit Wall Street risks that are wrapping their growing tentacles ever more tightly around the economy and taxpayers.
The hearing, according to Chairman Bob Goodlatte, would examine whether the Bankruptcy Code is best equipped to deal with the insolvency of large banks, such as the unusual level of speed needed for their efficient and orderly resolution, and the unique threats their collapse would pose to the broader stability of the economy.
Lacker was on his turf. For years, he has spoken out against QE. Earlier this year, he committed heresy by admitting that labor market conditions are affected by a wide variety of factors outside a central banks control; hed yanked away the Feds fig leaf for its QE and zero-interest-rate policies. And in June 2012, before QE3 had appeared on the horizon, hed stunned his listeners when he said, Monetary policy doesnt have a lot of capability right now for enhancing growth. He dissented at the FOMC meetings in 2012 when he last was a voting member. His concerns were confirmed by QE3s subsequent failure to budge the economy, though it inflated glorious assets bubbles all around.
Now, in his prepared remarks, he told the Committee that the Bankruptcy Code should be tweaked to make it feasible to resolve failing financial firms in bankruptcy. The financial crises showed glaring deficiencies in the way distress and insolvency of big banks are handled, he said. Meaning, they were all bailed out by the Fed and to a much smaller extent by TARP, when there should have been a system in place to wind the failing ones down in bankruptcy. The bailout of investors has
(Excerpt) Read more at zerohedge.com ...
Thank God for people that stand up for what they know to be true. The Great Depression was caused by the fed and is directly attributable to the death of a governor that prevented higher interest rates. He died. Interest rates went up. The rest is history.
Now we’re in the Great Recession and again the fed has no clue.
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