We have to Nationalize the Private Federal Reserve Bank, no private bank should be in charge of printing country’s money and lend it to the Gov., for Interest that taxpayers has to pay for. In 2011, the FED generated a profit of $75.9 billion – 18.6 percent of all the profits generated by the financial sector of the United States economy, and it is expected to be $229 billion in 2013. This is the biggest robbery on a continuous basis since 1913. There is nothing more important to National Debt than the Private FED. Imagine we the people gave our rights to a private Bank, and told them whenever we needed money print it and lend it to us, and we will give it back to you with Interest. Rothschild family; enough is enough; you’ve been riding us since 1913.
Spitting in the wind.
5
I disagree with Ms. Yellen - memories are not fading. Those on Wall Street made a lot of money before regulations, were bailed out when they got in trouble, and weren't punished when they were ripping the rest of us off. They remember and are looking for a return to those days.
24
I worked in the legal department of a bank during the wild days of unregulated mischief. Things did no go well. All banking operations are a public trust, holding the fate of our personal and business lives in their hands. I'd vote for increased scrutiny, not less!
21
Congratulations for your courage to speak out on what so many of us laymen even know. But there goes your job. Trump will likely not renominate you since the "gilded age" cannot be restarted with sensible regulations in place.
19
Ms Yellen has my vote for reining in the rapacious, reckless and predatory financial industry and its republican fellow travelers. My very favorite agency is the Consumer Financial Protection Bureau which republicans hate because they cannot control its protection of citizens. Republicans would love to strangle its funding.
12
Thanks go to Ms. Yellen for standing firm on safety-and-soundness to reduce systemic risks.
9
Who do you want watching the economy, your investments in your home, and your retirement money? Someone who has been very cautious to avoid further risk to the public (and remember the regular person still has not gotten ahead after the crisis) or someone who was at the center of the crisis and profited nicely from it? Compare your tax return from 2008 to 2016. Then look at Gary Cohn's during that same period. I think you'll find he has done very well, thank you while you have not. He has nothing to lose if the economy tanks again. You, on the other hand......
24
This country has the memory of a ----? What I forgot what I was saying. The lessons of the 2008 meltdown have been erased to the revisionist lobbying of the far right wing of the GOP. Funny because if they don't believe in bailouts why would they not believe in regulations to prevent them. Its like saying I don't believe in fires and to prove it I will ban fire departments so fires cannot happen. It just doesn't work that way.
The rallying cry of the GOP should be "Deny and Deregulate"
The rallying cry of the GOP should be "Deny and Deregulate"
22
Republicans can't wait for Yellen to be replaced by a chair that will move to strip way the regulations that are keeping corporations from getting back to business. The argument that regulations are essential to avoid a repeat of the economic meltdown that occured in the waning years of the George W Bush administration does not play in the WH. The president needs to stimulate growth, and the abundance of regulations are seen as a drag on economic initiative. Given the lack of subtlety in handling problems, the fear is that the WH will go to deep in deregulation.
6
So the argument is regulation impedes economic growth? How much was economic growth impeded by the LACK of regulation which led to the crisis in the first place? If people are willing to gamble with their own money, they play the lottery or go to a casino or race track. But when financial institutions gamble with someone else's money and make money on those gambles while the customer loses, we call that criminal. I could see loosening the regulation if the financial institutions had to pay a price and be held accountable for their actions. But that did not happen. Big financial institutions are too big to fail and their employees have absolutely nothing to lose by engaging in reckless risk taking with other people's money. My advice if these institutions are allowed to run wild? Get your money out of those places and use less volatile companies. Look for local companies who have an investment in your community. Far less likely to stab you in the back. You may not make as much, but you won't lose your shirt while they walk away cashing the bonus checks.
13
Long ago, Sir Thomas More composed a little epigram. In Latin (which I spare you). It was translated from the Greek. The gist was:
"What is a GOOD prince? The watch dog of the flock. He barks--he bares his teeth--he chases away the wolves.
"Then what's a BAD prince?
"The wolf."
No lie! This little poem has been running through my mind these many years now. Ever since 2008. Ms. Yellen! You are spot on.
Do most Americans comprehend the ins and outs--the loops--the intricacies of our financial system nowadays? I wonder. I sure don't. One thing though sticks in my mind.
In 2008, the wolves were in charge. They came within an ace of bringing down the economy of the world. Not just our country. The world. We were all of us teetering on the brink. We were facing ruin.
Strong hands reached out (while our own precious Republicans yapped and snarled). Strong capable hands pulled us back from the abyss.
And the wolves are at it again. Prowling round the sheep folds. Cowering should the guard dog fix them with an angry eye. Snarling, slinking off. Deterred for a moment, I guess. Permanently deterred? Not a chance!
Pretty crude imagery, no? So be it. I can be pretty crude sometimes. Should the occasion warrant.
And guess what? THE OCCASION WARRANTS. So bare your teeth, Ms. Yellen.
Send those wolves flying. We don't need 2008 all over again.
None of us do.
Thanks.
"What is a GOOD prince? The watch dog of the flock. He barks--he bares his teeth--he chases away the wolves.
"Then what's a BAD prince?
"The wolf."
No lie! This little poem has been running through my mind these many years now. Ever since 2008. Ms. Yellen! You are spot on.
Do most Americans comprehend the ins and outs--the loops--the intricacies of our financial system nowadays? I wonder. I sure don't. One thing though sticks in my mind.
In 2008, the wolves were in charge. They came within an ace of bringing down the economy of the world. Not just our country. The world. We were all of us teetering on the brink. We were facing ruin.
Strong hands reached out (while our own precious Republicans yapped and snarled). Strong capable hands pulled us back from the abyss.
And the wolves are at it again. Prowling round the sheep folds. Cowering should the guard dog fix them with an angry eye. Snarling, slinking off. Deterred for a moment, I guess. Permanently deterred? Not a chance!
Pretty crude imagery, no? So be it. I can be pretty crude sometimes. Should the occasion warrant.
And guess what? THE OCCASION WARRANTS. So bare your teeth, Ms. Yellen.
Send those wolves flying. We don't need 2008 all over again.
None of us do.
Thanks.
25
Trump is completely clueless when it comes to policy. He didn't understand health care, so he surely won't comprehend financial regulation. All he knows is what the hat-wearing people at his rallies like. When he says or does outrageous things, they cheer like mad.
So who is he likely to nominate as Fed chair? It's completely unpredictable as he has no view of what the qualifications are. It will be a purely political act, like everything else he does. And that's when we should be worried because the Fed chair is much more powerful than the president, within the domain of economics.
So who is he likely to nominate as Fed chair? It's completely unpredictable as he has no view of what the qualifications are. It will be a purely political act, like everything else he does. And that's when we should be worried because the Fed chair is much more powerful than the president, within the domain of economics.
7
Janet Yellen included, after too many recessions and major depressions still not convinced that the economic system the world over is fundamentally flawed and does not work or there would be no regular crises , that are getting worst every three or so years.With more wars and Climate change that is a reality all hell will break loss. Crooked timber of humanity as an added factor will lead to much bigger disaster. This nation's worst woes are our some over $24 trillion plus federal deficit The con man, fraud like Trump after fleecing some tens of thousands average Americans and others , then filing six bankruptcies , to avoid paying taxes got away manipulating the riff raff white supremacist and other low intelligence yahoo with impunity. Our rotten to the core political system is bad enough along with the likes of Trump getting elected. Stock market is pure simple casino gambling , What counts for a healthy economy is equality , equal justice for all, assurances of domestic tranquility, promotion of general welfare of all and and the security of blessing of liberty and and posterity for all, We just cannot build walls of separation , leading to apartheid , racism, bigotry, segregation, discrimination with which our past history is marred.
5
The one thing Trump is definitely not, is a man of the people. Nor is he a President for the people. To him, big business always comes first. He is doing it with most of our Federal agencies. All he is trying to do is make himself and his cronies more money, to the deficit of his peons - all of us.
Of course the Wall Street trolls want to get rid of all regulations so they can swoop in and make another killing by robbing the public blind once again.
They don't care whether their actions are illegal or unethical. They are 100% certain that they will never be punished. Oh, maybe they will be slapped on the wrist with a "cost of doing business" fine.
The operative principal on wall street is IBG/YBG--I be gone/you be gone. By the time anyone gets around to figuring out how to prosecute them for their heinous financial crimes, they are outta there, and usually so are the regulators. No prosecutors,no criminals, no crime, no punishment.
They don't care whether their actions are illegal or unethical. They are 100% certain that they will never be punished. Oh, maybe they will be slapped on the wrist with a "cost of doing business" fine.
The operative principal on wall street is IBG/YBG--I be gone/you be gone. By the time anyone gets around to figuring out how to prosecute them for their heinous financial crimes, they are outta there, and usually so are the regulators. No prosecutors,no criminals, no crime, no punishment.
6
Regulations! We don't need no religion's regulations! We are the finance tough guys, so what if we have another financial meltdown,the economy gets destroyed and your sack vs are wiped out! We have a government that will bail us out and leave you the taxpayer in the dust. How sad for you, how bigly huge for us.
2
Capitalism is a boom and bust system. No doubt removing these regulations will lead to a boom. And yet, as it always seems to be the case, the bigger the boom the bigger the bust that inevitably follows.
Fortunes will be made predicting the next bust, it's all just a matter of getting the timing down, and if the regulations are done away with there almost certainly will be another one. It's the closest thing to an iron law of capitalism that there is. The calls to end the Fed's post Dodd-Frank regulatory powers, are, in effect, calls to reopen the casino.
We are in the midst of a relatively long period of economic growth and yet we are still experiencing some fairly significant domestic troubles. If you think things are bad now just wait until there's another economic depression - the chaos that that will produce could lead to a dictator of either the far-left or far-right coming to power. A person that could make Trump look insignificant by comparison. It's for that reason alone that I would not support such a hasty end to Fed oversight. Let's see if we can get the real unemployment rate down to a respectable level first.
Fortunes will be made predicting the next bust, it's all just a matter of getting the timing down, and if the regulations are done away with there almost certainly will be another one. It's the closest thing to an iron law of capitalism that there is. The calls to end the Fed's post Dodd-Frank regulatory powers, are, in effect, calls to reopen the casino.
We are in the midst of a relatively long period of economic growth and yet we are still experiencing some fairly significant domestic troubles. If you think things are bad now just wait until there's another economic depression - the chaos that that will produce could lead to a dictator of either the far-left or far-right coming to power. A person that could make Trump look insignificant by comparison. It's for that reason alone that I would not support such a hasty end to Fed oversight. Let's see if we can get the real unemployment rate down to a respectable level first.
18
The Federal Reserve System was devised with the encouragement of Wall Street bankers to remove interest rates and money supplies from the control of office holders whose judgment might be swayed by more than keeping the economy from wild fluctuations. Thus far it's worked well enough that Presidents and Congresses have let it operate independently. It's not always easy. Republicans have been pressured to focus upon inflation by their constituents and Democrats upon unemployment rates by theirs.
Yellen is reflecting on the negligible rates of inflation persisting despite having reached full employment rates. The economy is not firing up yet as it has in the past, and that means that people are not buying a lot more than they have for some reason. It could create a situation where if financial regulations are removed to incentivize investing, it just might end up in the churning behavior of investors who speculate on paper instead in wealth and job creating real economy endeavors, and set of new wild behaviors in financial markets.
Yellen is reflecting on the negligible rates of inflation persisting despite having reached full employment rates. The economy is not firing up yet as it has in the past, and that means that people are not buying a lot more than they have for some reason. It could create a situation where if financial regulations are removed to incentivize investing, it just might end up in the churning behavior of investors who speculate on paper instead in wealth and job creating real economy endeavors, and set of new wild behaviors in financial markets.
8
The financial system is loaded with invitations to moral hazard. Deposit insurance for example but no one is suggesting eliminating deposit insurance. Thus the system needs oversight. Regulation is the management of risk in a massively leveraged economy. Less regulation means more risk
9
Now here's the funny thing...Yellen has allowed big banks to get by for years without filing their plans to deconstruct in case of failure
4
@DG New York
Untrue.
Untrue.
1
Not true. The FED has applied the stress tests for capital against all major banks exactly as it was meant to be applied since enacted.
4
Let's just make sure that this time every CEO, senior executive and Board Member of any Financial institution that fails this time around loses ALL of their assets to support homeowners and/or spend 10 years in jail before ONE homeowner loses a house due to the next greed driven financial crisis
17
The mega-wealthy are already mega-wealthy enough. Please don't deregulate them into being even wealthier--and as by-product, the rest of the nation into another 2008.
9
Good on Janet Yellen for a cogent, reasoned defense of regulations that kept us from going over the financial cliff. Sadly I fear logic and reason have no place in the chaos filled 45 administration where 45 and Munchin only care about the top 1% and could care less about normal everyday hardworking citizens.
20
If Trump holds true to his hiring practices, the next chairman will be a corporate shill and put the regular guy in harms way.
9
Thanks to Ms Yellen for saying this. She knows that a re-nomination is not in the cards with Trump. As for Gary Cohn, shame on you. Not speaking up publicly against Trump's comments for what - a better job.
5
Sorry, Ms. Yellen. You are addressing thieves and fools. They won't care or they won't understand.
8
Much of the misery that plagues Americans today started with the financial crisis of 2008. Think about that each time there is call for deregulation. Tears and pain will surely follow.
16
Good for Ms. Ellen. Stand your ground ant tell our dysfunction president to think (if that's possible) before he shoots off his mouth via Twitter.
2
I betting against Trump, moving out of American market. Cut tax, remove regulation and spend on the military. Same old song. Greed in the market, will be followed by fear. Trump should replace his barber, not Yellen.
5
Regulations are generally only developed when someone does not behave. If no one polluted, we would have no pollution regulations. If Wall Street behaved, we would not have banking regulations.
We did not have strong ethics regulations for the president because until now, they basically behaved ethically. Guess this is an area for more regulaion....
We did not have strong ethics regulations for the president because until now, they basically behaved ethically. Guess this is an area for more regulaion....
8
Hear! Hear!
3
I greatly respect Yellen and trust that she will continue to speak her own mind and that of her fellow governors rather than the political claptrap of those Republicans in the midst of creating another bubble.
3
Although Ms Yellen is a "dove" on matters of benchmark rates in comparison, I respect her professionalism and experience in these matters and if I were to advise Trump, I would say to defer to her judgement.
May I ask what Trump's professional experience might be in finance and banking? Answer this simple question: what one act by the Fed would have mitigated the Great Depression?
May I ask what Trump's professional experience might be in finance and banking? Answer this simple question: what one act by the Fed would have mitigated the Great Depression?
1
Maybe Trump cronies will deregulate banks and there will be a crash. Wouldn't it then be cosmic karma if the fake president lost most of his wealth?
2
Stand firm, Janet.
1
Yellen will be replaced and I hope some if not many of the regulations will be replaced. Banks should take deposits and make loans (or invest in treasuries if more money is there), nothing else.
4
Huh? Just to be clear, you've said current regulations should be pulled back. But then you indicate by your remarks that you'd like to go further than all current regulation.
That's the opposite direction of the Trump Administration. They will let the banks run wild.
Never forget that you lost at least half your life savings, and maybe your home, to guys like Steve Mnuchin, who ought to be in jail, not in the government.
136
Ms. Yellen's dismissal / resignation appears to be imminent, given her "disloyalty" to trump's dystopian grip on reality. She shows too much common sense as she insists that our government learn from it's mistakes (as to not repeat them), anathema to this group of greasy swamp dwellers in $4,000. suits.
After the next plunge over the financial cliff, trump will simply blame Obama, Hillary, (Charlottesville...?). His base will agree as they wave their tired "MAGA" placards and chant "Lock Her Up!" as our so-called president will mug and strut for the cameras at yet another trump pep rally for poverty, repression, and racism.
I have no sympathy for these trump fans and the suffering they're bringing upon themselves. I am very sorry however that millions of regular folks will suffer again as well.
After the next plunge over the financial cliff, trump will simply blame Obama, Hillary, (Charlottesville...?). His base will agree as they wave their tired "MAGA" placards and chant "Lock Her Up!" as our so-called president will mug and strut for the cameras at yet another trump pep rally for poverty, repression, and racism.
I have no sympathy for these trump fans and the suffering they're bringing upon themselves. I am very sorry however that millions of regular folks will suffer again as well.
74
Her term is up soon, not what you describe. The president surely would not re-appoint anybody that Obama chose.
1
Yellen manipulated the federal rates for the 8 years that Obama was President. And as soon as Trump was elected, she increased the fed rate. And our market has seen no inflation due to regulations being eliminated.
2
Of course not because he's a venal, stupid man who doesn't anything
The financial watchdogs of the country have been neutered, but kudos to Ms. Yellen for her steady stewardship of the shaky, sometimes suspect ship that the Fed is. I can't wait to see which new fox or swamp dweller we're gonna put in America's next financial regulatory henhouse.
25
Neither Ms. Yellen, nor Mr. Cohn kowtow to Trump.
Therefore they might both be endangered.
Therefore they might both be endangered.
7
Allowing politicians to tamper with Fed policy will prove to be (as it has in the past) a disaster for the hoi-polloi. The financial press is biased and supports banks. The mainstream press is not far behind.
Facts support that banks have buoyed the rich, and decimated the savings and credit of millions of households in America. Truly, lives were destroyed and many (too many) were members of the baby boom generation. That price has not been calculated in all the fallout.
Bernie Sanders had the answers for the young and old - those starting out and those hoping to retire in dignity.
Guess who will win prevail? Politicians or bureaucrats?
Hint: follow the money. A majority percentage of Americans are up against a bunch of ultra millionaires and billionaires that own/control the legislative, executive, judicial branches of government. Plutocracy over Democracy each and every time prevails. Which political party wants to address this?
Facts support that banks have buoyed the rich, and decimated the savings and credit of millions of households in America. Truly, lives were destroyed and many (too many) were members of the baby boom generation. That price has not been calculated in all the fallout.
Bernie Sanders had the answers for the young and old - those starting out and those hoping to retire in dignity.
Guess who will win prevail? Politicians or bureaucrats?
Hint: follow the money. A majority percentage of Americans are up against a bunch of ultra millionaires and billionaires that own/control the legislative, executive, judicial branches of government. Plutocracy over Democracy each and every time prevails. Which political party wants to address this?
71
Speculation has driven the stock market to record levels that have even the most bullish investors feeling insecure. So, yes, regulation is necessary.
11
What does these regulations have to do with the stock market? Very little!!!
2
When the financial structure of the country implodes, as it almost did in 2008, the stock market is affected. Or weren't you around at that time?
Rejoice not in a rising stock market. Yeah and verily if you can't afford to play the market it isn't benefiting you.
6
Absent a reinstatement of Glass-Steagall, we now have far too little regulation of our banks and financial markets. Trump's argument for even less regulation is a recipe for another financial meltdown.
45
Working with low-income individuals and families who want to use Down Payment Assistance in hopes of becoming a first time home owner have to meet the same minimum credit requirements as those who earn above 80 percent of the AMI. The strict regulatory requirements hurt the local community banks and credit unions the most as they tend to have a larger presence in the underserved areas of town.
If these smaller financial institutions are affordable housing lenders and one of their lenders makes a housing transaction, shortly after the commission check arrives the process of selling the paper to one of the big banks begins in case of default. It’s that plain and simple yet, the Community Banks still profit and can offer REAL Customer Service.
If these smaller financial institutions are affordable housing lenders and one of their lenders makes a housing transaction, shortly after the commission check arrives the process of selling the paper to one of the big banks begins in case of default. It’s that plain and simple yet, the Community Banks still profit and can offer REAL Customer Service.
2
"process of selling the paper to one of the big banks " - so you want to restart the housing crisis the same way it started last time?
Uh, oh. The USA is once again doomed to undergo another financial disaster. Time to sell my stocks!
14
Be interesting to see if Trump keeps Janet Yellen. Trumps wants to eliminate Regulations. Yellen knows that present regs are important to prevent a repeat of the past global crisis. Ms Yellen is not afraid to say outright what is best for the country
64
Why would he keep any Obama appointee?? I sure would not.
2
Yellen will be forced out. She has the "taint" of Obama and therefore she has to go. Along with any good legislation that Obama put in, or legislation that was put in during Obama's administration.
Vendetta. That is what is behind the Trump effort to get rid of the regulations, to erase all of the accomplishments of Obama who publically humiliated Trump at the Press Dinner. If anyone knows how to nurse a grudge it is Trump.
Yellen is right, the banks are in better shape and there is less potential for another spate of corporate welfare to financial companies that take undo risk with client money.
Being right doesn't count though. Getting even is all that matters to Trump. He doesn't care who gets injured, he's going to get even.
Yellen is right, the banks are in better shape and there is less potential for another spate of corporate welfare to financial companies that take undo risk with client money.
Being right doesn't count though. Getting even is all that matters to Trump. He doesn't care who gets injured, he's going to get even.
51
Yellen is correct if don't learn from our past we are bound to repeat it. This is why I refused to invest in today's stock market, due to fact that Republicans are in control. When the Great Depression, and Great Recessions devastated our economy, it was the republicans who were in control . History shall repeat itself again with Republicans in office. So buyer beware. You have been warned.
16
Good for you, keep your money under your mattress.
3
Mr. Ruben is correct, and you should pay attention. If these regulations are lifted there WILL be another financial crisis. The problem is that the banks will get their bailout but we won't, just as it happened in 2008.
Why is it so hard to learn from the past? The crisis of 2008 happened BECAUSE OF the deregulation of the financial system. This administration only cares about the short term and how to make more money. Believe me when I tell you Mr. Vulcanalex, they don't care about you. They don't care about anybody but themselves.
Why is it so hard to learn from the past? The crisis of 2008 happened BECAUSE OF the deregulation of the financial system. This administration only cares about the short term and how to make more money. Believe me when I tell you Mr. Vulcanalex, they don't care about you. They don't care about anybody but themselves.
1
When the financial markets crashed in 2008, even the giant banks which were not at risk of insolvency were afraid of it and their executives expressed a wish that regulations had been in place to prevent the wild run away markets which caused all of them to lose a lot of money. The markets were going up and up, month after month, for years. Eventually it became obvious that the securities were over priced and a downturn was inevitable. The problem was when because anyone who pulled out while prices continued to rise would be blamed for the lost returns. So they all just road it out. The normal disincentives of big potential losses were obscured by insurance against losses (which were underfunded and took down AIG) and the promise of too big to fail taxpayer bailouts (which is what happened). The fact that financial institutions around the world were all underfunded to cover losses meant that U.S. firms were also underfunded. The adjustments to regulations since that crash require that the banks do more to cover their losses with greater reserves constrain their ability to invest money which they cannot afford to touch nor borrow against, and that is driving them nuts. Even these regulations do not provide the cover that kept commercial banks from being compromised by big financial banks as they had been before the late 1990's.
6
I'm glad to see so many comments reflecting an understanding of the basic fact that Republican economic policy invites disaster. The most recent incarnation of this policy is particularly alarming because we have not seen anything this extreme since the 1920s. The empirical evidence is merciless. The economy performs poorly under Republican presidents who also created the two worst recessions in the last century. The only exception is Reagan but then again, in the 1980s there was nowhere to go but up. What worries me is that right now there is nowhere to go but down and if that happens, the administration is so incompetent that they will not be able to take the kind of decisive action that Obama took to rescue the economy. If trouble comes, the ship sinks all the way and the next president may have to deal with some real American carnage. These are the stakes for the mid-terms in 2018, the only real way to change course. Forget about the Russia investigation, forget impeachment or a revolution on the streets. Instead, go to battle where it counts and vote in 2018.
27
"Memories of this experience may be fading — memories of just how costly the financial crisis was..." says Janet Yellen.
"Just how costly", true, but what is conveniently forgotten is just how close we came to something much worse -- a global seizure of the credit system, a crisis of confidence in the money economy, and a run on the banks -- frightened depositors lining up to withdraw savings that their banks had loaned out to others and didn't have.
Only extraordinary measures by the Fed and other central banks averted a global disaster. That response was invented, piece by piece, as the crisis deepened and loosely orchestrated internationally.
The crisis began in the US subprime mortgage market, a small segment of the economy. How did it quickly mushroom into a paralysis of the credit system? Because of the widespread adoption of a bunch of 'financial innovations' -- opaque derivatives that were supposed to spread risk, but instead spread insolvency, pushing financial institutions to the brink of bankruptcy that had appeared to be sound just a few months earlier.
Why would we weaken the modest reforms put in place to fortify the banking system and regulate derivatives? To make laissez-faire true believers feel better?
"Just how costly", true, but what is conveniently forgotten is just how close we came to something much worse -- a global seizure of the credit system, a crisis of confidence in the money economy, and a run on the banks -- frightened depositors lining up to withdraw savings that their banks had loaned out to others and didn't have.
Only extraordinary measures by the Fed and other central banks averted a global disaster. That response was invented, piece by piece, as the crisis deepened and loosely orchestrated internationally.
The crisis began in the US subprime mortgage market, a small segment of the economy. How did it quickly mushroom into a paralysis of the credit system? Because of the widespread adoption of a bunch of 'financial innovations' -- opaque derivatives that were supposed to spread risk, but instead spread insolvency, pushing financial institutions to the brink of bankruptcy that had appeared to be sound just a few months earlier.
Why would we weaken the modest reforms put in place to fortify the banking system and regulate derivatives? To make laissez-faire true believers feel better?
29
Our Republican Party and Mr. Trump hate market regulation because it may control massive price fluctuations. Those fluctuations are what create the winners and losers; the gains and the losses. They create billionaires and paupers.
If you were among the people who made billions from the 2008 collapse then you do not want regulation, and you are will to buy a Congress and President (and maybe even a Supreme Court) to ensure that "foolish" regulation doesn't interfere with you winnings. If you are one of the people who lost or were hurt by the recession in 2008, then you might want to listen to Ms. Yellen. She has some very good points.
If you were among the people who made billions from the 2008 collapse then you do not want regulation, and you are will to buy a Congress and President (and maybe even a Supreme Court) to ensure that "foolish" regulation doesn't interfere with you winnings. If you are one of the people who lost or were hurt by the recession in 2008, then you might want to listen to Ms. Yellen. She has some very good points.
14
Easy for public officials to look good opposing Trump's deregulation craziness. But Dems need Wall St money for 2018/20.
Did Yellin support restoring Glass Steagall that separated commercial consumer banking from wild west gambling by Wall St? Which if Bill Clinton and Yellin hadn’t repealed it, could have lessened the harm of the 08 crash?
When Hillary refused to restore GS in her campaign, saying it was only ‘shadow banks’ that caused the great crash, what did Yellin say?
Being against Trump isn’t enough. It can perpetuate an illusion of Dems as our saviors, even when they don’t live up to their duty to the public.
This is how our norms of what’s centrist are being moved further to the right---with much of the public naively supporting it as their financial security goes down. And they read continual anti Trump columns from the media, without any prescriptions of what the opposing party must do. We need an opposing party.
Did Yellin support restoring Glass Steagall that separated commercial consumer banking from wild west gambling by Wall St? Which if Bill Clinton and Yellin hadn’t repealed it, could have lessened the harm of the 08 crash?
When Hillary refused to restore GS in her campaign, saying it was only ‘shadow banks’ that caused the great crash, what did Yellin say?
Being against Trump isn’t enough. It can perpetuate an illusion of Dems as our saviors, even when they don’t live up to their duty to the public.
This is how our norms of what’s centrist are being moved further to the right---with much of the public naively supporting it as their financial security goes down. And they read continual anti Trump columns from the media, without any prescriptions of what the opposing party must do. We need an opposing party.
4
The Economy is a musical chairs game with each crisis is a chance to game it in favor of those in power. And a chance to bet on it in the great Wall St Casino.
CRISIS is Opportunity in the big game.
Taxpayers are flotsam in a sea of money.
CRISIS is Opportunity in the big game.
Taxpayers are flotsam in a sea of money.
4
Yellen may counsel prudence on the basis of past and very painful experience, but she's speaking to the deaf in the Trump administration.
To get an idea of how economically unintelligent Trump's administration is, just listen to Mulvaney talk about defaulting on the national debt. He thinks it's no big deal and creditors could simply be paid in the order they presented their bills. Alas, the chaos in the world economy would be severe, perhaps irreparable. Add to this a gaggle of greedy billionaires and you get disaster.
Against stupidity the gods themselves fight in vain.
To get an idea of how economically unintelligent Trump's administration is, just listen to Mulvaney talk about defaulting on the national debt. He thinks it's no big deal and creditors could simply be paid in the order they presented their bills. Alas, the chaos in the world economy would be severe, perhaps irreparable. Add to this a gaggle of greedy billionaires and you get disaster.
Against stupidity the gods themselves fight in vain.
14
Those who forget history are doomed to repeat it. Those who ignore recent history deserve their doom.
38
Forget history? We're stuck with a bunch of guys who created it and they don't care about the rest of us. They live in "me for me" land.
3
Janet Yellen is one of the most conscientious and wise persons to sit on the Federal Reserve Chair. A noble woman with integrity.
16
Or one of the most incompetent one, take your choice.
No the above comment said Janet Yellen is conscientious and wise. I think the incompetent one is your president.
2
I can only assume that Donald has at least a few lawyers focused full-time on how to "monetize" another financial collapse. I mean, why wouldn't he?
12
Could part of Trump's plan for easing regulations include Steve Mnuchin's desire to privatize Fannie and Freddie? Online sources say their market caps are $16.3B Fannie, and $1.76B Freddie. Does Mnuchin want to hand over the mortgage portfolios to to their stockholders? If so, it would be a nice gain for them.
According to a Oct. 2015 article "They (Fannie & Freddie) own or guarantee the payments on more than $5 trillion in American mortgages, or about 60 percent of the total (mortgages)."
That would be a deal even Bain Capital would envy.
According to a Oct. 2015 article "They (Fannie & Freddie) own or guarantee the payments on more than $5 trillion in American mortgages, or about 60 percent of the total (mortgages)."
That would be a deal even Bain Capital would envy.
4
Both of them need to be moved to the private sector, along with the risk of default going with the mortgages as they are sold. No insurance, no government bail out, just Mr. Market.
2
Just Mr. Market...and that's worked out really well for health care. So, what could possibly go wrong?
1
Three cheers for Ms. Yellen. She speaks up with common sense on the need for controls to prevent run-away financial sprees. And we had thought she only make interest prognostications. We need all your smarts Ms. Yellen if we are to keep the speculators from stealing the economy. Thanks.
12
What will be your next job Janet? This speech is a principled swan song.
1
Janet Yellen reminds me of Angela Merkel of Germany - a serious, professional, highly qualified and very analytical person, someone who knows her job and spends a lot of time studying policies and their potential implications in great detail. Like Angela Merkel, she doesn't have any "show biz" charisma, and she's way too professorial in the way she speaks for the average crowd.
The Germans listen to Angela Merkel and take her very seriously. They have elected her to de-facto leader of the free world. Sadly, the USA is not Germany. Too many Americans disdain intellectualism, have a very poor grasp of how the world works, can't focus for more than a few seconds on any given topic, and have elected a buffoon into the highest office after being duped by his fake populist propaganda. I don't think any of these people even know who Janet Yellen is, and for sure they won't listen to a word she says.
The Germans listen to Angela Merkel and take her very seriously. They have elected her to de-facto leader of the free world. Sadly, the USA is not Germany. Too many Americans disdain intellectualism, have a very poor grasp of how the world works, can't focus for more than a few seconds on any given topic, and have elected a buffoon into the highest office after being duped by his fake populist propaganda. I don't think any of these people even know who Janet Yellen is, and for sure they won't listen to a word she says.
61
Read economic history, boom and bust has been driving 1st world economies since the beginning of hard currency. Without boom and bust you have stagnation. If I learned that then these folks know that as well.
2
An idea that is easy to promote when you have the money to benefit from both boom and bust.
But tell that to the people who lost their homes in the last bust. Who lost their jobs. Whose business went bankrupt in the last bust. who lost their retirement. Who ate through their savings and college funds for their kids. Who lost Health Care. Who became homeless.
But it benefits the 1%, so why not right?
But tell that to the people who lost their homes in the last bust. Who lost their jobs. Whose business went bankrupt in the last bust. who lost their retirement. Who ate through their savings and college funds for their kids. Who lost Health Care. Who became homeless.
But it benefits the 1%, so why not right?
Not all regulations are good ones. However, when Trump signed an executive order basically making it easy for financial advisor predators to bilk seniors out of their savings, I knew this guy would sign anything no matter the consequences to the American people. Now banks are licking their lips in order to bring back mortgages people won't be able to afford down the road. Credit cards will be issued to unsuspecting 18-year olds thinking a minimum of $20 a month is doable. Our environment is slowly being raped while climate change is a" hoax" because companies don't want to take any responsibility. Trump is holding his purse strings close to his heart. One day when the stock market corrects itself, don't say you weren't warned by the likes of Yellen. Then of course Trump himself said he sees it as an opportunity to buy more stocks. Thank God for the 1% who can always make lemonade out of lemons.
26
Thank you for this timely article, and thank you Janet Yellen for adding your voice to the majority of Americans with limited investment funds and household budgets needing protection.
I too agree that we need to keep annual stress testing of large banks in place. Keep them from falling back into bad practices. Gary Cohn, former president/CEO of Goldman Sachs, should know this better than anyone else.
The majority of Americans do not have millions of dollars or even hundreds of millions of dollars in available funds to act as cushions to fall back upon if another crisis happens, or is brought down upon our heads by Trump and his appointees. Median income households lost retirement monies as well as investment monies. Monies that could not be replaced easily, without much sacrifice, and in some cases monies that were never replaced. There are still those suffering financial hardship today.
We also know enormous amounts of this lost money, a few billions, went into the pockets of those who profited greatly in 2008. They never paid back their investors as they were corporate thieves, and almost no-one ended up in prison for financial fraud. A grievous injustice added on top of injuries already suffered by honest, small investors who lost it all not so long ago, including their homes.
I too agree that we need to keep annual stress testing of large banks in place. Keep them from falling back into bad practices. Gary Cohn, former president/CEO of Goldman Sachs, should know this better than anyone else.
The majority of Americans do not have millions of dollars or even hundreds of millions of dollars in available funds to act as cushions to fall back upon if another crisis happens, or is brought down upon our heads by Trump and his appointees. Median income households lost retirement monies as well as investment monies. Monies that could not be replaced easily, without much sacrifice, and in some cases monies that were never replaced. There are still those suffering financial hardship today.
We also know enormous amounts of this lost money, a few billions, went into the pockets of those who profited greatly in 2008. They never paid back their investors as they were corporate thieves, and almost no-one ended up in prison for financial fraud. A grievous injustice added on top of injuries already suffered by honest, small investors who lost it all not so long ago, including their homes.
11
Just one, went to prison, that was all.
"The majority of Americans do not have millions of dollars or even hundreds of millions of dollars in available funds to act as cushions to fall back upon if another crisis happens"
The majority of Americans, over 60 percent, have essentially no cushion to fall back on. Three out of five Americans do not have $500 in savings.
https://www.cbsnews.com/news/most-americans-cant-afford-a-500-emergency-...
Why? Well let's start with the fact that half the jobs in America pay less than $18 an hour.
https://www.washingtonpost.com/news/wonk/wp/2017/08/24/half-the-jobs-in-...
The financial position of the majority of Americans depends much more on how the government influences aggregate demand through spending. Since the Republican landslide in 2010, we have tried to manage the economy with one hand tied behind our backs. Republicans have largely taken fiscal policy off the board. If anything, sequestration has probably restrained growth.
I hope that wise people like Ms. Yellin will continue to manage our financial institutions wisely. Still as long as the Federal government relies solely on monetary policy millions of Americans fall further behind.
The majority of Americans, over 60 percent, have essentially no cushion to fall back on. Three out of five Americans do not have $500 in savings.
https://www.cbsnews.com/news/most-americans-cant-afford-a-500-emergency-...
Why? Well let's start with the fact that half the jobs in America pay less than $18 an hour.
https://www.washingtonpost.com/news/wonk/wp/2017/08/24/half-the-jobs-in-...
The financial position of the majority of Americans depends much more on how the government influences aggregate demand through spending. Since the Republican landslide in 2010, we have tried to manage the economy with one hand tied behind our backs. Republicans have largely taken fiscal policy off the board. If anything, sequestration has probably restrained growth.
I hope that wise people like Ms. Yellin will continue to manage our financial institutions wisely. Still as long as the Federal government relies solely on monetary policy millions of Americans fall further behind.
The current administration is in bed with the Wall Street, and WS wants to optimize profits. This works best with little or no regulation. Therefore, away with Obama era restrictions on lending rules cash reserves. I'm sure the ex-Goldman-Sachs chief economic adviser to our buffoon president and all other ex-GS clowns in the administration know that perfectly well.
For the banks all went well after 2008 anyway (pocketing profits, socializing losses). If anything, they came out stronger and richer. So deregulation only works to their favor.
For the banks all went well after 2008 anyway (pocketing profits, socializing losses). If anything, they came out stronger and richer. So deregulation only works to their favor.
15
The Financial Crisis was entirely caused by Federal housing policies that govern mortgage rules. Lowering the mortgage standards so that high risk, low income people could afford more housing was a stupid liberal idea. This is the reason why we need LESS government. Federal regulations ALWAYS skew the economy and create monopolies (and bubbles that break).
2
Nope. You had deregulated banks that bilked investors in the public and private sector. Go watch the Big Short.
14
Sure, blame the liberals, when it was republicans that caused the crisis. It was the banks who handed out those loans and abused the system. It was deregulation that allowed for that to happen, i.e. too little government
Totally wrong but you're not the only one who believes this.
Americans will repeat the errors of 2007 and the subprime loans,
if we allow this Walmart Senate, House, and Oval Office step over regulations that protect American Tax payers.
America will be in more bankruptcy court cases than Mr. Trump
if we allow this Walmart Senate, House, and Oval Office step over regulations that protect American Tax payers.
America will be in more bankruptcy court cases than Mr. Trump
10
With Yellen possibly on the way out, it's time to buy bonds (just not junk bonds).
2
please explain why buying bonds would be a timely purchase, if she was on the way out.
3
Getting rid of the post-2008 meltdown financial regulations would allow wall street to operate its business like Trump runs his--cheat, reneg and force litigation. Except when Trump cheats you, it's your own fault for doing business with him. If the Wall street regulations are removed, we are all at risk of having wall street run the country into the ditch. Just like Trump--expose all of us to great significant risk for his own personal desires.
17
So the Fed regulated the banks better
Big, hairy, deal
From the FT, 2017
'One of the most enduring consequences of the 2008 financial crisis is its disruption of lending. Nonbank competitors — often referred to as “shadow banks” — have seized on the weaknesses of financial institutions, introducing new ways for businesses and households to borrow.
The growing influence of alternative capital is most evident in the US — in April 2015, nonbank lenders accounted for more than half of new government-backed mortgages. Banks are still the biggest lenders in Europe, but rivals are emerging. Many of the new players are linked to the securitisation industry, where loans are packaged up and sold on as bonds to capital markets investors."
https://www.ft.com/content/21a42afe-f92f-11e6-bd4e-68d53499ed71
The Fed still has to accept that Wall Street wizardry will always be ahead of regulation, and that the ONLY way to avoid financial bubbles is to price credit 3% over the rate of inflation.
Capitalism was founded on the assumption that credit is a priced resource handed out by the discipline of the market place to those most able to use it efficiently.
When credit is free (negative real interest rates) it has and will be misused.
Big, hairy, deal
From the FT, 2017
'One of the most enduring consequences of the 2008 financial crisis is its disruption of lending. Nonbank competitors — often referred to as “shadow banks” — have seized on the weaknesses of financial institutions, introducing new ways for businesses and households to borrow.
The growing influence of alternative capital is most evident in the US — in April 2015, nonbank lenders accounted for more than half of new government-backed mortgages. Banks are still the biggest lenders in Europe, but rivals are emerging. Many of the new players are linked to the securitisation industry, where loans are packaged up and sold on as bonds to capital markets investors."
https://www.ft.com/content/21a42afe-f92f-11e6-bd4e-68d53499ed71
The Fed still has to accept that Wall Street wizardry will always be ahead of regulation, and that the ONLY way to avoid financial bubbles is to price credit 3% over the rate of inflation.
Capitalism was founded on the assumption that credit is a priced resource handed out by the discipline of the market place to those most able to use it efficiently.
When credit is free (negative real interest rates) it has and will be misused.
2
Good for Ms. Yellen...Voicing her very well informed opinion that we should not role back all banking reforms and regulations that have been put into place since the fiscal meltdown. I want to be the first to wish her good retirement now that her opinions have rendered her unemployed by trump.
24
Observed a few months of Trump and company shenanigans and bouncing around with lets do this, no lets do that. Lets get rid of Yellen, no maybe we'll see how it goes. We'll wait and see. Too many regulations, hurting small business, hurting the coal miners, hurting big business. And most of all hurting my real estate empire. We need to deregulate everything now.
In March I bailed from the markets and will not reenter because this is absolutely, positively, the most incompetent Administration ever.
In March I bailed from the markets and will not reenter because this is absolutely, positively, the most incompetent Administration ever.
13
The regulations imposed after the Great Depression helped to avoid wild rises and falls in the financial markets. When these regulations were relaxed there began a series of boom and busts which over time have stripped away huge amounts of wealth distributed across the population who have not seen enough of a share of the new wealth created to offset those losses. It developed that those with great financial assets could recover from these busts where as those with small assets or greater debt could not. All that while, conservatives have been focused upon some pending rise of inflation with any recovery which would diminish the real value of their assets, fearful of the growth which would help restore wealth lost in the busts by those with less assets who depended upon growth to raise their salary/wage incomes.
1
Thank goodness for Janet Yellen's clear-eyed reasoning. It is hard to believe that so many have forgotten just how close we all came to total collapse not too long ago. I very much hope she stays in place for the time being.
25
I can't wait to read her book.
2
Is the lesson being that we bail out the Rich? That we allow those who caused, with fraud, the Financial Crisis to walk away with all of the gains of the bailout that resulted?
Is it that we continue to let the Wells Fargo fraudsters continue to operate while they open fake accounts. That the banks used the same programs meant to help the poor as part of the crisis, they used those to fraudulently enrich themselves again?
No the "reforms" that were needed were not "implemented".
We managed in a crisis to stop a meltdown which is good, but the aftermath is a joke. No accountability, just a continued fleecing by the rich and well connected. The 1%.
"memories of the experience may be fading" but Ms Yellen apparently never experienced what unfair, unjust, and immoral banking and finance did and does to America. Too busy toasting the corruption with her banking friends at a mountain resort to know the real truth.
We are not safer, we got sold out. And Trump just makes it worse.
Is it that we continue to let the Wells Fargo fraudsters continue to operate while they open fake accounts. That the banks used the same programs meant to help the poor as part of the crisis, they used those to fraudulently enrich themselves again?
No the "reforms" that were needed were not "implemented".
We managed in a crisis to stop a meltdown which is good, but the aftermath is a joke. No accountability, just a continued fleecing by the rich and well connected. The 1%.
"memories of the experience may be fading" but Ms Yellen apparently never experienced what unfair, unjust, and immoral banking and finance did and does to America. Too busy toasting the corruption with her banking friends at a mountain resort to know the real truth.
We are not safer, we got sold out. And Trump just makes it worse.
14
Speculators like the President exploit volatility- they make real money only when prices jump (time to sell) and when they crash (time to buy). Financial regulation is good for the economy and the average investor but bad for the speculators.
6
The only reason Trump would do anything for the US financial system, is personal gain. If he relaxes, gets rid of the regs the banks want gone he would have a marker for when he's gone in 31/2 years or less. He'll look to cash that marker because by then the russians won't be able to launder their money through Dumpster Enterprises, and lord knows he'll need the cash, after the beating his courses and clubs are going through
2
It's not that the super-rich didn't learn their lesson from the financial crisis; it's that they did.
According to the Center for Economic and Policy Research, the top 1 % got 18.33 % of all income at the peak before things crashed. Then they took a hit but by 2012 they were getting 19.34%. And they got to keep everything they got before they brought the system down. And its been flying ever since. And when it comes to the real money, the top .01 and .001...
The moral of the story: If you don't care about your fellow citizens, Cowboy Capitalism pays even if the system crashes from time to time.
According to the Center for Economic and Policy Research, the top 1 % got 18.33 % of all income at the peak before things crashed. Then they took a hit but by 2012 they were getting 19.34%. And they got to keep everything they got before they brought the system down. And its been flying ever since. And when it comes to the real money, the top .01 and .001...
The moral of the story: If you don't care about your fellow citizens, Cowboy Capitalism pays even if the system crashes from time to time.
8
We already know that the GOP game is one of deception. The GOP blocked Obama's best efforts to aid our economy by screaming about deficits as a killer of economies even when every economist around said his deficits would pay for themselves and strengthen the faltering economy. Now that they are in power, Trump wants to create big deficits because of the desire to cut HIS taxes which do not pay anybody but the wealthy.
6
To the Federal Reserve chairwoman, hold strong because not all of us are out of this financial crisis. Family houses have been placed on the Market, gainful employment can be difficult to find and some of us will never work again after the Republicans were the cause of a Government Shut-Down in the midst of The Great Recession.
Memories are not fading for those of us who depend on accumulating food points to feed our children. A prominent economist credited with saving New York from bankruptcy was on his way to be deputy to Alan Greenspan, when I saw his name flash on the tape wire. He was being blocked by the Republicans and withdrew his nomination.
Please continue to keep Us informed and cautious. Recessions come and go, but whether We are headed for another one by year end or 2023, only you may have the key to address ongoing economic developments in this era of uncertainty where the Country is navigating on low policy governance.
Memories are not fading for those of us who depend on accumulating food points to feed our children. A prominent economist credited with saving New York from bankruptcy was on his way to be deputy to Alan Greenspan, when I saw his name flash on the tape wire. He was being blocked by the Republicans and withdrew his nomination.
Please continue to keep Us informed and cautious. Recessions come and go, but whether We are headed for another one by year end or 2023, only you may have the key to address ongoing economic developments in this era of uncertainty where the Country is navigating on low policy governance.
2
I guess we all know who's going to be fired next. The suspense was killing me.
14
"The speech amounted to a warning to the Trump administration, which is pressing regulators to loosen or remove some of those regulatory changes."
Here we go again. Janet Yellen is screaming into the wind if she thinks that the Trump Administration, and chief economic cowboy Gary Cohn, who itches to be head of Fed, are going to heed her warnings.
The GOP never learns. That fiscal crisis on the heels of a toxic mortgage bubble so vast it almost tanked our total economy wiped a lot of people out. That President Obama did what he did, restored confidence in the system, and led to a period of steady, non-speculative growth is testament to his good common sense.
Nothing Donald Trump says or does tells me he knows anything about economics; and he's a known gambler. Of course, with other people's money--so if these regulations are rolled back and banks can become little betting machines that sucker a lot of little folks to overextend themselves on the next hot thing, who will be the one left holding the bag?
Get ready folks, for the worst is yet to come: if you think dirty air and polluted waters from EPA regulatory rollbacks, just wait until the ex-Wall Street cowboys staffing Trump's cabinet get their hands on our financial system.
None of them inspire confidence, not even Steve Mnuchin whose budget forecast is predicated on a 4% growth rate (way too high). I fear that the Great Recession of 2008-9 will pale in comparison to what this crowd has in store for us.
Here we go again. Janet Yellen is screaming into the wind if she thinks that the Trump Administration, and chief economic cowboy Gary Cohn, who itches to be head of Fed, are going to heed her warnings.
The GOP never learns. That fiscal crisis on the heels of a toxic mortgage bubble so vast it almost tanked our total economy wiped a lot of people out. That President Obama did what he did, restored confidence in the system, and led to a period of steady, non-speculative growth is testament to his good common sense.
Nothing Donald Trump says or does tells me he knows anything about economics; and he's a known gambler. Of course, with other people's money--so if these regulations are rolled back and banks can become little betting machines that sucker a lot of little folks to overextend themselves on the next hot thing, who will be the one left holding the bag?
Get ready folks, for the worst is yet to come: if you think dirty air and polluted waters from EPA regulatory rollbacks, just wait until the ex-Wall Street cowboys staffing Trump's cabinet get their hands on our financial system.
None of them inspire confidence, not even Steve Mnuchin whose budget forecast is predicated on a 4% growth rate (way too high). I fear that the Great Recession of 2008-9 will pale in comparison to what this crowd has in store for us.
23
And to think, Gary Cohn, is rumored to want Dr. Yellen's job. Do we really want a person with such apparently limited personal morals with his hands on the wheel of the economy?
I assure you, Mr. Cohn and his band of universe masters remember the pain of the deregulated years very well. But as long as they think they can extract wealth from newly unbound financial markets, they will do so with gleeful abandon.
Quoting Upton Sinclair: It's difficult to get a man to understand something when his salary depends on his not understanding it.
As Socrates might say: Nice people.
I assure you, Mr. Cohn and his band of universe masters remember the pain of the deregulated years very well. But as long as they think they can extract wealth from newly unbound financial markets, they will do so with gleeful abandon.
Quoting Upton Sinclair: It's difficult to get a man to understand something when his salary depends on his not understanding it.
As Socrates might say: Nice people.
34
"I support financial reform," said Janet Yellen, regularly.
4
I'm confident that Janet Yellen recognizes that being fired by loud Donald Trump qualifies as a badge of courage, honor and patriotism.
45
If de-regulation of the financial sector is a goer then I would be concerned this idea might spread more generally to other areas of society. Who knows, Trump just may want to de-regulate vehicle traffic on the roads by doing away with traffic lights and giving individuals the right to drive across intersections when they please.
26
Of course the memories of CDOs and the Great Recession are forgotten. These are people and institutions whose vision extends no farther than the next fiscal quarter...
40
Why would those who have not learned the lesson of the Civil War have any interest in learning lessons from the past decade or so?
134
Good one!
6
The Republic party controlled both houses of Congress twice in the last century: 1921-1930 and 2001-2006. Results? The Great Depression and the Great Recession. Think the Republic party's trying for a hat trick?
194
Yellen points out what should be obvious about the need for thoughtful regulation. That will only prompt Trump to tear away any sane restraints on business with the GOP congress gleefully abetting. Trump will surely get rid of Yellen if only for spite - after all, Obama appointed her and she has the temerity to do her job competently.
Even though they know better - business people - especially in finance, always will keep on dancing till the music stops.
Get ready for Great Recession 2.0.
Even though they know better - business people - especially in finance, always will keep on dancing till the music stops.
Get ready for Great Recession 2.0.
59
Who is surprised that a regulator supports regulation? The lesson from the financial crisis should be that when government distorts markets, bubbles often form. Bubbles will burst.
1
Steve, who is surprised that the people who stand to earn lots of money from deregulation (money managers) oppose regulation?
You seem unaware of financial history. There have always been bubbles. Markets are designed to respond to distortions of all kinds, including wars, natural disasters and nation states that restrict immigration flow.
What I learned from the financial crisis is that the people who made out well at that time were the brokers - the people who sold both overpriced houses and overrated securities - and that neither group has any obligation to look out for the interests of the people they are selling to.
The people who make a living investing other people's money have a great thing going - it's heads we win, tails you lose. If a broker can make enough money in bonuses to retire on for the rest of their life during the bubble years, then how is there a risk for them even if the bubble bursts? They basically gamble with other people's money, with odds that are better than a casino.
You seem unaware of financial history. There have always been bubbles. Markets are designed to respond to distortions of all kinds, including wars, natural disasters and nation states that restrict immigration flow.
What I learned from the financial crisis is that the people who made out well at that time were the brokers - the people who sold both overpriced houses and overrated securities - and that neither group has any obligation to look out for the interests of the people they are selling to.
The people who make a living investing other people's money have a great thing going - it's heads we win, tails you lose. If a broker can make enough money in bonuses to retire on for the rest of their life during the bubble years, then how is there a risk for them even if the bubble bursts? They basically gamble with other people's money, with odds that are better than a casino.
35
The big housing bubble that burst was created by unregulated investment banks pumping huge amounts into high-risk mortgage loans originated by unregulated mortgage companies through unregulated mortgage brokers. Not only did the unregulated investment banks fraudulently obtain investment grade ratings from the unregulated ratings agencies for securities backed by junk mortgages they even sold the same mortgages more than once by creating synthetic collateralized debt obligations,
33
All evidence points to the contrary of your statement.
2
Yellen's statements are some of the most obvious ever muttered in history. But they will be lost on many many Americans.
133
The problem with the greed is good crowd is that they have no memory. They have a perpetual need to indulge themselves in the already gamed system that works in their favor for even more ease of access to the world's wealth.
34
I'm under the impression that Trump followers and much of the people on the right do NOT understand what REGULATIONS are. Some of these same people agree with the left that Corporations have way too much power and control that they use to the disadvantage to the customer as well as workers. Yet these same people cheer for further Deregulation, as the right has always done.
So here it is. Regulations are the laws that companies must comply with. Just as you and I have laws that we must comply. If we remove those laws (DEregulation) then we have anarchy with the strongest being able to control the weaker. In your body, Cancer is your same cells that make up your organs, not obeying the "laws" of your body.
So what do you think happens when you remove laws that govern companies? When you DEregulate? Why do you think companies have become "too big to fail"? Why they have run out smaller family owned business?? Why they are able to pay you less while the lions share go to upper management and shareholders??
So here it is. Regulations are the laws that companies must comply with. Just as you and I have laws that we must comply. If we remove those laws (DEregulation) then we have anarchy with the strongest being able to control the weaker. In your body, Cancer is your same cells that make up your organs, not obeying the "laws" of your body.
So what do you think happens when you remove laws that govern companies? When you DEregulate? Why do you think companies have become "too big to fail"? Why they have run out smaller family owned business?? Why they are able to pay you less while the lions share go to upper management and shareholders??
89
"...memories of this experience may be fading — memories of just how costly the financial crisis was..."
Costly for working people, but not to those with fat portfolios, who saw their wealth rebound fantastically since. Wall Street scooped up tens of thousands of foreclosed homes and is now in the home rental business.
Yellen is much too optimistic about Dodd-Frank's "orderly liquidation" preventing another meltdown, but we'll probably find out soon how functional it is - the rent checks Wall Street collects are being bundled into derivatives.
http://www.motherjones.com/politics/2014/02/blackstone-rental-homes-bund...
Costly for working people, but not to those with fat portfolios, who saw their wealth rebound fantastically since. Wall Street scooped up tens of thousands of foreclosed homes and is now in the home rental business.
Yellen is much too optimistic about Dodd-Frank's "orderly liquidation" preventing another meltdown, but we'll probably find out soon how functional it is - the rent checks Wall Street collects are being bundled into derivatives.
http://www.motherjones.com/politics/2014/02/blackstone-rental-homes-bund...
15
There were very big loses on Wall Street that have still not come close to being wiped out. If you invested $10,000 in Citigroup stock on May 1, 2007, and reinvested the dividends, the stock would have been worth $1,396 at yesterday's close. That is still an 86% loss.
The linked article is from 42 months ago and the idea that the mortgage backed securities are bundled rent checks is the same as arguing that MBS backed by owner-occupied homes are bundled wages and pensions. In both case what are bundled are the mortgage loan interest and principal payments paid by the property owners.
The linked article is from 42 months ago and the idea that the mortgage backed securities are bundled rent checks is the same as arguing that MBS backed by owner-occupied homes are bundled wages and pensions. In both case what are bundled are the mortgage loan interest and principal payments paid by the property owners.
Ms Yellen's independence is allowing her to make decissions not corrupted by Trump's devious politicking and attempted de-regulation. Let's hope that reason prevails and our vulgar bully in chief is kept distracted at getting richer from his golf clubs...and not at governmental (our) expense...and keeps Ms Yellen in place. We want fairness, not a loyalist doing Trump's turbid business.
14
Trump will fire Yellen for no better reason than she was/is an OBama appointee....plus of course all his rich buddies want everything that any regulation they see as standing in their way of making a buck removed.....we are in for much trouble..
1
TRUMP will WIN against all enemies of the state foreign and domestic. JOBS!
Perhaps you might start setting an example and contribute to the creation of jobs by submitting an application to start working on The Trump Wall.
1
Do you know what happened to jobs after the last financial meltdown? An ounce of prevention is worth a pound of cure. Janet Yellen is your friend, truth be told - Trump's, too, for that matter, though he might not know it.
2
You mean those Republican corporate CEOs who shipped nearly all manufacturing overseas? Those enemies? Enemies of Trump, or his best buddies?
1
What all Americans must ask is whether they would trust a trained, intelligent, knowledgeable economist who knows her economic history and thinks critically. or would they rather trust Republican politicians and Trump administration appointees, who have personal agendas, that don't necessarily protect all the rest of us, to run our economy.
115
@RLW
Do you mean the "trained, intelligent, knowledgeable economist who knows her economic history" who failed to see the biggest economic crisis in a century coming in 2008?
That one?
Or the one that has helped inflate an asset bubble that has transferred trillions of dollars of wealth to the investor class?
Or the one that was one of the architects of the economic policies that have poured gas on the already raging fire of inequality, which has now reached society-destabilizing levels?
Or the one who has continually downgraded her forecast for economic growth, over, and over, and over again since the crisis in 2008 that she failed to see coming, with all her knowledge of "economic history"?
And with all of her "critical thinking" skills, you'd think she would have figured out by now that she has been applying 20th century solutions to 21st century problems, which is why everything she does is failing.
And it seems like the Fed and economists overall didn't necessarily do such a great job in 2008 in "protecting all of us", now did they? Or since, for that matter.
So, anyway, that's what this American is asking.
Do you mean the "trained, intelligent, knowledgeable economist who knows her economic history" who failed to see the biggest economic crisis in a century coming in 2008?
That one?
Or the one that has helped inflate an asset bubble that has transferred trillions of dollars of wealth to the investor class?
Or the one that was one of the architects of the economic policies that have poured gas on the already raging fire of inequality, which has now reached society-destabilizing levels?
Or the one who has continually downgraded her forecast for economic growth, over, and over, and over again since the crisis in 2008 that she failed to see coming, with all her knowledge of "economic history"?
And with all of her "critical thinking" skills, you'd think she would have figured out by now that she has been applying 20th century solutions to 21st century problems, which is why everything she does is failing.
And it seems like the Fed and economists overall didn't necessarily do such a great job in 2008 in "protecting all of us", now did they? Or since, for that matter.
So, anyway, that's what this American is asking.
2
she wasn't even in office in 2008 she serves a four-year term and is up for Renomination in February
2
Ms. Yellen was appointed by Obama and confirmed as Chairwoman of the Federal Reserve in 2014. Deregulation is what caused the Great Recession in 2008. Removing additional regulations will lead to another economic crisis in our country. I'm curious who you think should be at the helm of the Federal Reserve, one of the Trump clan perhaps?
3
"policy makers gathered here a decade ago were optimistic about the resilience of the system — which was even then in the process of falling apart."
Stunning.
And absolutely true, of course.
Sometimes people forget the magnitude of the incompetence of the economists and economic policy makers, so it's always good to be reminded, I suppose.
But was a single one of them ever held accountable for their colossal failure, in any way?
Stunning.
And absolutely true, of course.
Sometimes people forget the magnitude of the incompetence of the economists and economic policy makers, so it's always good to be reminded, I suppose.
But was a single one of them ever held accountable for their colossal failure, in any way?
8
Regulation is for the things that the market can not work out itself - spoiler alert! - it's a lot more situations than you think!
The first thing to remember is that economics does not take into account equity - IE: Fairness. So markets work perfectly...just maybe not for the current population, time or location. That said - economists belong in their white ivory tower and should never come do to affect the real World, were myriad externalities exists that they can not possibly take into account.
The first thing to remember is that economics does not take into account equity - IE: Fairness. So markets work perfectly...just maybe not for the current population, time or location. That said - economists belong in their white ivory tower and should never come do to affect the real World, were myriad externalities exists that they can not possibly take into account.
In this highly technical area it's difficult for the non banker, non economist to make meaningful commentary, but it would seem prudent that the Fed should err on the side of caution rather than risk the disastrous economic meltdown we experienced a decade ago. Too many people were too deeply hurt to experience that era again. Roulette is risky enough at the casino; we don't need to employ it for banking.
41
You don't need to be an economist to understand that deregulated financial activity lead to the economic crash of 2007. Repealing regulation put in place to prevent a repeat of the crash is self interest for the few at the cost of the many, yet again.
Thankfully, Trump has shown a mature, thoughtful response to experts in many fields — finance, climate science, diplomacy — and will most certainly defer to Yellen's experience and judgment in regulatory matters.
Just kidding. Yellen is toast.
Just kidding. Yellen is toast.
129
Regulations are just like laws.
Good regulations and good laws are good. Bad regulations and bad laws are bad.
Only people who have never tangled with snarled or arrogant bureaucracies like all regulations. In New York these regulations often lead to graft, corruption, delays, and unnecessary costs to everyone.
Except to those who take the graft. They love it, of course!
Good regulations and good laws are good. Bad regulations and bad laws are bad.
Only people who have never tangled with snarled or arrogant bureaucracies like all regulations. In New York these regulations often lead to graft, corruption, delays, and unnecessary costs to everyone.
Except to those who take the graft. They love it, of course!
1
Janet Yellen is a responsible patriot who is being perfectly reasonable.
Reckless Republicans will bring back 2008 again the second you let them deregulate the economy over an unregulated cliff.
The idea that Republicans are fiscally responsible or economically knowledgeable is preposterous and the historical record proves their incompetence.
Republican knowledge of economics begins and ends with unfettered greed.
Reckless Republicans will bring back 2008 again the second you let them deregulate the economy over an unregulated cliff.
The idea that Republicans are fiscally responsible or economically knowledgeable is preposterous and the historical record proves their incompetence.
Republican knowledge of economics begins and ends with unfettered greed.
217
Regulations in the stock market are like having boundaries in one's personal life; once these are clearly delineated, anyone involved knows clearly what one can and cannot do. Regulations should and often do provide great relief to all involved.
72
Perhaps a better way than regulations to limit speculation is to tax away returns greater than 6 percent. There would be less incentive to make risky investments that promise a super high return. Also, it would increase economic equality. Returns on investment should not be greater than the growth rate of the economy.
6
Yellen is giving evidence for restraint but Trump is not going to hold back on erasing anything from the Obama years to help his supporters. They want to dismantle government regulations across the board and let the market run amok.
I can't help but wonder how very different this would be if Sanders had been successful.
I can't help but wonder how very different this would be if Sanders had been successful.
31
Not sure why you think Bernie would have won the presidency. I'm always baffled by Bernie fans who persist in believing he would have won. As a Democrat I wouldn't have voted for Bernie whose platform consisted of half-baked ideas and slogans. Sorry, but I prefer platforms with reasonable chances of actually working and not some pie in the sky slogans. Not sure that many people I know would have voted for him or would have only done so with great reluctance. I find it strange that Bernie with his decades in govt has done nothing in terms of legislation and only is a Democrat when it suits his political advancement. Really? After several decades in office, what has Bernie done for the country in all those years? How many people even knew he existed until a year ago?
4
@gf ~ "I can't help but wonder how very different this would be if Hillary Clinton had been successful."
11
For many in our media it was trendy to label Sanders pie in the sky, to keep their own prestige and position as centrists in our big money political culture.
But what's left out is that most of Sanders ideas on taxes, regulations on corporations, campaign finance, tax subsidies for college, etc, were once quite centrist policy in the US. They worked to make our middle class strong, with greater economic equality. And they work in other countries now that are also capitalist but with stronger support for the citizen majority.
Gop Eisenhower was against the rw extremists, and favored much higher taxes on wealth than we have now, plus strengthening social security and also--labor unions!
Sanders was in effect a 'conservative', aiming to restore and conserve the policies that were once pragmatic centrist, and now are labeled left wing, unworkable. That labeling over decades has worked well to fool a lot of the people most of the time, and served to advance the careers of Democratic centrists who need billions from megadonors to run for office. Like the Clintons.
So into this mess steps Tsar Trump the Terrible.
But what's left out is that most of Sanders ideas on taxes, regulations on corporations, campaign finance, tax subsidies for college, etc, were once quite centrist policy in the US. They worked to make our middle class strong, with greater economic equality. And they work in other countries now that are also capitalist but with stronger support for the citizen majority.
Gop Eisenhower was against the rw extremists, and favored much higher taxes on wealth than we have now, plus strengthening social security and also--labor unions!
Sanders was in effect a 'conservative', aiming to restore and conserve the policies that were once pragmatic centrist, and now are labeled left wing, unworkable. That labeling over decades has worked well to fool a lot of the people most of the time, and served to advance the careers of Democratic centrists who need billions from megadonors to run for office. Like the Clintons.
So into this mess steps Tsar Trump the Terrible.
4
1) “Trickle Down Economy” via “Tax cuts for the Rich” via “Deregulation” work for the 99% or the country as a whole?
2) “Economic inequality was good for economic growth!”?
The financial crisis sent our economy into a tailspin. Over five million people lost their homes. Nearly nine million people lost their jobs. Nearly $13 trillion in household wealth was wiped out.
This is what Adam Smith has said: “It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.” And recently Warren Buffett confirmed Adam Smith’s notion by saying nobody make investment because of the taxes.