from Armstrong Economics:
The problem with the NY bankers is they simply want to trade with other people’s money. They have to have their wings clipped. If they want to trade, change careers and become hedge fund managers. Then you can only keep a portion of what you make not 100%, and when you are wrong, you can’t tell government the world will collapse unless they absorb your losses. Restore Glass Steagall and PROHIBIT proprietary trading in banks!!!! Now that you expect the depositors to “bail-in” the banks, how about real reform!
With the Fed, who knows what it is today since it has the legal authority to take over McDonalds or Walmart if it declares them too big to fail. They are no longer limited to banking. The Fed when formed was NECESSARY and it was sound. It was to provide an elastic money supply for the purposes of preventing bank failures buying time to meet short-term obligations without dumping long-term assets. The Fed stimulated directly by buying corporate paper and that would have made the economy much more stable.
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