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The Fed's Been Good For Wall Street, Not So Much For Main Street

Tuesday, May 21, 2013 - 7:53 AM
Whatever course it chooses, the Federal Reserve will have to grapple with the reality that while its policies have helped levitate stocks, they've been considerably less effective at expanding the economy.  While rising equity prices help add to total growth, the stock market is not the economy.

"We've made rich people richer," Dallas Fed President Richard Fisher told CNBC in a Monday interview.

"This is great for the (Warren) Buffetts and for others who can take advantage of this multiple of great money and cheap money that's been available," he added. "The question is, what have we done for the working men and women of America?"

http://www.nbcnews.com/business/feds-been-good-wall-street-not-so-much-main-street-6C9996709
6
ShorebreakShorebreak2,683 posts since
Apr 6, 2010
Rep Points: 14,546
1. Tuesday, May 21, 2013 - 9:00 AM
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My Dear Shorebreak,

Okay ... so your on-line career objective of FOMC bashing continues ... nice!  :-)

 
Whatever course it chooses, the Federal Reserve will have to grapple with the reality that while its policies have helped levitate stocks, they've been considerably less effective at expanding the economy. Whatever course it chooses, the Federal Reserve will have to grapple with the reality that while its policies have helped levitate stocks, they've been considerably less effective at expanding the economy. 

Right ... So tell us why exactly in your opinion it is ncessary for the FOMC to pay extra careful attention to stocks?  ... Its focus, so far as I know always has been the bonds. (Not junk bonds.)  If you or President Fisher are under the impression that FOMC's focus in on DOW, rather than on the inflation/unemployment numbers published by the BLS, then ... well ... you both are mistaken.  BTW, stocks are a part of economy, so ignoring them totally is not possible, but that hardly is the focus.

 
"This is great for the (Warren) Buffetts and for others who can take advantage of this multiple of great money and cheap money that's been available," he added. "The question is, what have we done for the working men and women of America?"

The answer is that we have helped them do mortgage refinance at a lower and lower rates. We have helped them borrow for their vehicles and other needs at a lower and lower rates.  Most important, what we've done is to help them stay in the category of the "working men and women of America"  !!  :-)

Yours Truly,
- Anon
In FED I Trust  :-)
2
ytytytytytytytyt158 posts since
Jan 28, 2013
Rep Points: 623
2. Tuesday, May 21, 2013 - 12:25 PM
Well somebody has to be a balance for the fanboys out there.  :O)

What is the unemployment rate at currently? 

Source -- http://www.cnbc.com/id/100691168
Though employment has risen by 1.3 million over the past year, unemployment that counts the discouraged and underemployed, as well as the jobless (often called the "real" unemployment rate) has remained stubbornly high, at 13.8 percent of the workforce, according to the most recent count.

 

Trust but verify.  Some interesting history on that phrase.  Seems it may have actually originated with Lenin.  Although Reagan had been quite fond of it and that is at least my memory of it. -- http://en.wikipedia.org/wiki/Trust,_but_verify

And Margaret Thatcher quipped, "Just verify".  :O)
1
ChrisCDChrisCD70 posts since
Nov 18, 2010
Rep Points: 457
3. Tuesday, May 21, 2013 - 12:34 PM
"Trust but verify" is one of my great favorites.  The Wikipedia article says it was originally attributed to Lenin, and was adopted by President Reagan in discussing US relations with the Soviet Union.  If memory serves, it specifically had to do with disarmament of nuclear missiles - the Sovier Union would remove 1,100 missiles in return for a promise that the US would not deploy US missiles which had nt yet been built.  
1
pearlbrownpearlbrown1,474 posts since
Nov 2, 2010
Rep Points: 6,405
4. Tuesday, May 21, 2013 - 1:04 PM
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Dear ChrisCD and perlbrown,

Indeed ... verification is quite necessary ... And this verification is available in monthly numbers released by the BLS for the inflation/unemployment.

Now ... if both of you feel there are changes/improvemenst necessary in the way BLS (a department of our Government that is not under the control of Federal Reserve), gathers details, crunches/compiles numbers ... then sure, I'm with you.

Bottom line: The verification is performed in real-time, and FOMC's frequent meetings are designed to act upon this verfication, makiing the mechanism quite robust and responsive.

Yours Truly,
- Anon
In FED I Trust  :-)

 
PS:  Is there any mechnism to verify the trust placed by the (so called) faithful in the hypothetical entity they call the God?  :-)

In other words, if the GOD's creation (our nation?) has caused the (so called) suffering of the (so called) savers, then where is their Trust, that the very same GOD will make the things right, or maybe that this is the punishment inflicted on them by their merciful GOD for their greed to fetch the max Usary they can get?  :-)

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2
ytytytytytytytyt158 posts since
Jan 28, 2013
Rep Points: 623
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