by They are on to it a bit but still don't understand the Reserve policy effect on regulatory leverage ... so could cause another GFC2 at any time with a big Reserve increase...GFC2 still 100% in play...They still think "more Reserves is better!" which fits with their Monetarist axiom "banks lend out the Reserves!"... ie their continuing reification error... ie Monetarist morons in charge thinking the Accounting abstractions are real...Mnuchin evidencing some ignorance on the issue: Treasury Secretary Steven Mnuchin isn’t convinced. In fact, he suggested such a shift could lead to even bigger financial-stability problems. “If you’re a regulator, you wouldn’t want a major bank’s balance sheet to go up and down based upon what could be very, very large cash movements,” he told Bloomberg
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They are on to it a bit but still don't understand the Reserve policy effect on regulatory leverage ... so could cause another GFC2 at any time with a big Reserve increase...
GFC2 still 100% in play...
They still think "more Reserves is better!" which fits with their Monetarist axiom "banks lend out the Reserves!"... ie their continuing reification error... ie Monetarist morons in charge thinking the Accounting abstractions are real...
Mnuchin evidencing some ignorance on the issue:
Treasury Secretary Steven Mnuchin isn’t convinced. In fact, he suggested such a shift could lead to even bigger financial-stability problems. “If you’re a regulator, you wouldn’t want a major bank’s balance sheet to go up and down based upon what could be very, very large cash movements,” he told Bloomberg News in an interview last month. “It shouldn’t impact the market one way or another whether we put money at the Fed or at a bank.”
Well sorry hate to break the news to you but it does... increases non-risk assets at the banks and depresses your own regulatory leverage ratio which you are supposed to be in charge of... oh well... can't expect people to be technically qualified I guess...
Then here ... Fed and Trump Treasury still at daggers and not coordinating ...this is always nice to see:
Fed Chairman Jerome Powell said in December that bank officials had yet to discuss the topic with their Treasury counterparts. Nevertheless, he added that “there may come a time when we talk about that.”
Oh that's just perfect.... Recipe for another GFC2 disaster from these morons still in place... conditions have not changed...
And then the even dumber left-wing Art Degree nutters will say it is all a big "neo-liberal conspiracy!" lol...
The Treasury Department isn't helping the Federal Reserve's efforts to calm short-term lending markets https://t.co/7mQpSmROet pic.twitter.com/2VLDyDBadj— Bloomberg Markets (@markets) February 18, 2020