Sanders just submitted college for all bill.

[baileyn45]

The idea behind QE is that you don’t need a printing press to add money to an ailing economy. The Fed’s usual method of fighting recessions is to push down the interest rates banks charge each other for overnight loans, which allows banks to offer cheaper loans to businesses. But the Fed cut that rate almost to zero during the financial crisis five years ago, and more was clearly needed. So the Fed began buying bonds in hopes of driving down long-term rates that are usually outside its control. It wasn’t a new idea, but it had never been tried on such a massive scale. In the months after the crisis, the Fed bought $1.75 trillion in bonds. In 2010, with the recovery flagging, it bought $600 billion more in what was called QE2. In September 2012, with joblessness stubbornly high, the bank began snapping up $85 billion a month in Treasuries and mortgage-backed securities — QE3. Unlike earlier rounds, the Fed’s purchase plan was described as open-ended, with officials saying it would continue until the labor market “improved substantially.” The idea was that reducing the bond purchases gradually — that is, tapering them off — would make clear that the central bank would continue to offer support for the economy, just at lower levels.

No mention of toxic assets there.

Sure there is. Those very bonds the fed was buying are the "toxic assets".

"The fact that the Fed provided credit to financially troubled firms and now holds many of the bonds of these same firms on its balance sheet has caused many to question the financial strength of the Federal Reserve itself. Policymakers have expressed concerns over the amount of Fannie Mae–issued and Freddie Mac–issued mortgage-backed securities that the Fed now holds. These purchases appear financially risky because they include some of the very same assets—the so-called toxic assets—that led to the financial crisis".

"A large portion of these QE purchases, however, removed some of the riskiest assets—Fannie’s and Freddie’s debt and MBS—from commercial banks’ balance sheets. This fact has led some to argue that the Fed designed the QE programs as a way to bail out banks, not merely as a new form of expansionary monetary policy.[10] Regardless of the true intent, the QE programs have been so controversial because they effectively exchanged cash—created out of thin air—for bank assets that had dramatically declined in value. From the perspective of banks, the QEs could be judged a success because the purchases strengthened their financial position."

Unless you believe TARP took care of the problem, in which case this economic downturn would have been dwarfed by the past Savings and loan crisis..

 

[Toddsterpatriot]

The idea behind QE is that you don’t need a printing press to add money to an ailing economy. The Fed’s usual method of fighting recessions is to push down the interest rates banks charge each other for overnight loans, which allows banks to offer cheaper loans to businesses. But the Fed cut that rate almost to zero during the financial crisis five years ago, and more was clearly needed. So the Fed began buying bonds in hopes of driving down long-term rates that are usually outside its control. It wasn’t a new idea, but it had never been tried on such a massive scale. In the months after the crisis, the Fed bought $1.75 trillion in bonds. In 2010, with the recovery flagging, it bought $600 billion more in what was called QE2. In September 2012, with joblessness stubbornly high, the bank began snapping up $85 billion a month in Treasuries and mortgage-backed securities — QE3. Unlike earlier rounds, the Fed’s purchase plan was described as open-ended, with officials saying it would continue until the labor market “improved substantially.” The idea was that reducing the bond purchases gradually — that is, tapering them off — would make clear that the central bank would continue to offer support for the economy, just at lower levels.

No mention of toxic assets there.

Sure there is. Those very bonds the fed was buying are the "toxic assets".

"The fact that the Fed provided credit to financially troubled firms and now holds many of the bonds of these same firms on its balance sheet has caused many to question the financial strength of the Federal Reserve itself. Policymakers have expressed concerns over the amount of Fannie Mae–issued and Freddie Mac–issued mortgage-backed securities that the Fed now holds. These purchases appear financially risky because they include some of the very same assets—the so-called toxic assets—that led to the financial crisis".

"A large portion of these QE purchases, however, removed some of the riskiest assets—Fannie’s and Freddie’s debt and MBS—from commercial banks’ balance sheets. This fact has led some to argue that the Fed designed the QE programs as a way to bail out banks, not merely as a new form of expansionary monetary policy.[10] Regardless of the true intent, the QE programs have been so controversial because they effectively exchanged cash—created out of thin air—for bank assets that had dramatically declined in value. From the perspective of banks, the QEs could be judged a success because the purchases strengthened their financial position."

Unless you believe TARP took care of the problem, in which case this economic downturn would have been dwarfed by the past Savings and loan crisis..

Sure there is. Those very bonds the fed was buying are the "toxic assets".

How can you say that assets guaranteed by the US government are toxic? If a bank held one of those bonds, they would get every single interest payment and the principal when it matures.

Those MBS traded above par since before the Fed started buying them. Do you know what par means?

A large portion of these QE purchases, however, removed some of the riskiest assets—Fannie’s and Freddie’s debt and MBS—from commercial banks’ balance sheets.

They were guaranteed by the Treasury before the Fed bought a single bond.
Not a single defaulted payment on any of them. Hugely profitable for the Fed.

Regardless of the true intent, the QE programs have been so controversial because they effectively exchanged cash—created out of thin air—for bank assets that had dramatically declined in value.

They were trading above par, how did they "dramatically decline in value"?

Unless you believe TARP took care of the problem

TARP added capital to the banks. QE added reserves.

 

[baileyn45]

Sure there is. Those very bonds the fed was buying are the "toxic assets".

How can you say that assets guaranteed by the US government are toxic? If a bank held one of those bonds, they would get every single interest payment and the principal when it matures.

That's nonsense. You are confusing Govt issued bonds with privately held securities. These securities were no more guaranteed by the fed govt than stocks.

Those MBS traded above par since before the Fed started buying them. Do you know what par means?

Again nonsense. I can't quite figure out what you think the "toxic assets" are. The banks held securities based on subprime mortgages, they blew up in the banks face. Those securities are as diminished now as they were in 2008. The only difference is they are now held by the fed as opposed to the banks.

A large portion of these QE purchases, however, removed some of the riskiest assets—Fannie’s and Freddie’s debt and MBS—from commercial banks’ balance sheets.

They were guaranteed by the Treasury before the Fed bought a single bond.
Not a single defaulted payment on any of them. Hugely profitable for the Fed.

Again nonsense. The privately held securities have never been guaranteed by the fed govt. Profitable for the fed?
You're mixing this up with TARP, which was hardly "hugely" profitable. Most estimates are that the fed purchased 1.7 tr in "toxic assets". While not completely worthless they are worth pennies on the dollar to this day. If you think otherwise you could buy some of them at the price before the blow up. Let me know how that works out.

Regardless of the true intent, the QE programs have been so controversial because they effectively exchanged cash—created out of thin air—for bank assets that had dramatically declined in value.

They were trading above par, how did they "dramatically decline in value"?

If they were trading above par what was the problem? This whole mess is based on the fact that the big banks had massive MBS based derivates that were in turn based on subprime mortgages which blew up in the faces of the banks. If they were never a problem this blow up would have never happened.

Unless you believe TARP took care of the problem

TARP added capital to the banks. QE added reserves.

QE purchased toxic assets from the banks. Those toxic assets now reside in the portfolio of the fed. They are no less toxic now than they were in 2008..

And by the way, up until the fed govt took control of fannie and freddie they were completely private institutions whose risk was no more guaranteed by the fed govt than your or my stock portfolio.

 

[Onyx]

I'll be happy to break it down further if anyone's interested but, bottom line, unless you're a hedge fund manager (and a bad one), you've got nothing to worry about.

Don't forget about the tens of millions of stockholders and venture capitalists in America. What of the competitive growing corporations and hard working small businesses that are reliant on appearing as attractive as possible in order to secure investors?

0.5% speculation tax on stock exchanges seems like a small number, but this is a huge economy, and that money is in better hands being moved around between free market capitalists, than entitled youth who are more than capable of paying for their own education.

 

[Arianrhod]

I'll be happy to break it down further if anyone's interested but, bottom line, unless you're a hedge fund manager (and a bad one), you've got nothing to worry about.

Don't forget about the tens of millions of stockholders and venture capitalists in America. What of the competitive growing corporations and hard working small businesses that are reliant on appearing as attractive as possible in order to secure investors?

0.5% speculation tax on stock exchanges seems like a small number, but this is a huge economy, and that money is in better hands being moved around between free market capitalists, than entitled youth who are more than capable of paying for their own education.

The tax is on speculators, not small businesses. And the "entitled youth" are those who would be attending state universities...which used to be tuition-free. Only the trust-fund babies get a free ride to Harvard.

If you're going to object to the plan, it helps to know what it's actually about.

Not to mention that a better educated America can compete in the global marketplace. College is an investment, not just in the kids whom you resent for reasons unexplained, but in the nation.

From another perspective, college graduates who are not saddled with huge student loan debt can put their earnings into other things that drive the economy, like home ownership, investments, their own startup businesses, etc.

 

[dblack]

The states should also make sure that all those college graduates get a decent job when they graduate, eh?

 

[Arianrhod]

The states should also make sure that all those college graduates get a decent job when they graduate, eh?

Interesting hypothesis. Make your case.

 

[Toddsterpatriot]

Sure there is. Those very bonds the fed was buying are the "toxic assets".

How can you say that assets guaranteed by the US government are toxic? If a bank held one of those bonds, they would get every single interest payment and the principal when it matures.

That's nonsense. You are confusing Govt issued bonds with privately held securities. These securities were no more guaranteed by the fed govt than stocks.

Those MBS traded above par since before the Fed started buying them. Do you know what par means?

Again nonsense. I can't quite figure out what you think the "toxic assets" are. The banks held securities based on subprime mortgages, they blew up in the banks face. Those securities are as diminished now as they were in 2008. The only difference is they are now held by the fed as opposed to the banks.

A large portion of these QE purchases, however, removed some of the riskiest assets—Fannie’s and Freddie’s debt and MBS—from commercial banks’ balance sheets.

They were guaranteed by the Treasury before the Fed bought a single bond.
Not a single defaulted payment on any of them. Hugely profitable for the Fed.

Again nonsense. The privately held securities have never been guaranteed by the fed govt. Profitable for the fed?
You're mixing this up with TARP, which was hardly "hugely" profitable. Most estimates are that the fed purchased 1.7 tr in "toxic assets". While not completely worthless they are worth pennies on the dollar to this day. If you think otherwise you could buy some of them at the price before the blow up. Let me know how that works out.

Regardless of the true intent, the QE programs have been so controversial because they effectively exchanged cash—created out of thin air—for bank assets that had dramatically declined in value.

They were trading above par, how did they "dramatically decline in value"?

If they were trading above par what was the problem? This whole mess is based on the fact that the big banks had massive MBS based derivates that were in turn based on subprime mortgages which blew up in the faces of the banks. If they were never a problem this blow up would have never happened.

Unless you believe TARP took care of the problem

TARP added capital to the banks. QE added reserves.

QE purchased toxic assets from the banks. Those toxic assets now reside in the portfolio of the fed. They are no less toxic now than they were in 2008..

And by the way, up until the fed govt took control of fannie and freddie they were completely private institutions whose risk was no more guaranteed by the fed govt than your or my stock portfolio.

That's nonsense. You are confusing Govt issued bonds with privately held securities. These securities were no more guaranteed by the fed govt than stocks.

You're just flat out wrong.

After the government took over Fannie Mae and Freddie Mac, those bonds were backed by the US Treasury.

Again nonsense. I can't quite figure out what you think the "toxic assets" are. The banks held securities based on subprime mortgages, they blew up in the banks face.

You bet, banks that held bad mortgages or private label MBS based on bad mortgages lost hundreds of billions on those toxic securities. Banks that held Fannie and Freddie MBS didn't lose a dime in interest or principal.

The Fed didn't buy those crappy mortgages or crappy MBS. They did buy the ones backed by the Treasury.

Those securities are as diminished now as they were in 2008.

LOL!

Mortgage-Backed Securities, CMOs - Markets Data Center - WSJ.com

Check the link. FNMA & FMAC, all trading over 100 (par).

If they were trading above par what was the problem?

The Fed wanted to boost money in the banking system and drop interest rates.
What else were they going to buy but Treasuries and guaranteed, liquid MBS?

QE purchased toxic assets from the banks.

QE purchased high quality assets from willing sellers. Mostly non-banks.

And by the way, up until the fed govt took control of fannie and freddie they were completely private institutions whose risk was no more guaranteed by the fed govt than your or my stock portfolio

Right, and after the government took over, they were guaranteed.
And after the takeover is when the Fed bought. I'm glad you finally see your error.

 

[Onyx]

The tax is on speculators, not small businesses.

Okay, let me simplify this for you.

When Bernie Sanders says speculation tax, he really means a tax on all transactions in the financial center

When Bernie Sanders says Wall Street, he is actually referring only to the stock market and the hundreds of thousands of venture capitalists, shareholders, and businesses that interact with the stock market.

In other words, in order to pay for this social program, you would be taxing everyone who tries to invest in the stock market, and not only that, but that also can seriously screw with the companies that are reliant on investments, which includes small businesses and competitive growing corporations.

Speculation taxes are not a new concept. They have been discussed forever and continuously shot down, because we had enough common sense not to fuck with the stock market by making it harder to invest and move money around.

 

[Onyx]

The tax is on speculators

If you're going to object to the plan, it helps to know what it's actually about.

I question if you know what it is about.

Speculators? That is just a silly way of referring to people investing money into the stock market. Don't be fooled into accepting the first socialist policy you see whenever it references "wall street" either.

Liberals hear a politician talking about "Wall Street" and they will mindlessly support whatever bill they propose next.

 

[Onyx]

Another thing.

If you are going to implement a new tax, at least have a somewhat decent reason.

There isn't really a logical reason to implement risky taxes like these. Sure, he'll say something totally hypocritical, like how the ultra-risky tax is meant to lower the rate of high risk investments, but come on.... this is taxation because the government can, not because it needs too.

I shouldn't of expected the American public to be for more social programs with such a tight budget. Fiscal responsibility means nothing to the morons in power, and the morons voting them into power.

 

[Arianrhod]

The tax is on speculators

If you're going to object to the plan, it helps to know what it's actually about.

I question if you know what it is about.

Speculators? That is just a silly way of referring to people investing money into the stock market. Don't be fooled into accepting the first socialist policy you see whenever it references "wall street" either.

Liberals hear a politician talking about "Wall Street" and they will mindlessly support whatever bill they propose next.

Two words: hedge funds.

 

[Arianrhod]

Another thing.

If you are going to implement a new tax, at least have a somewhat decent reason.

A tax on the profits of corporations whose sole function is to move other people's money from one pile to another, in order to restore a tuition-free state university education so that American kids can compete with kids in other developed nations may not float your boat, but you're entitled to your opinion.

 

[Two Thumbs]

just another $47 Billion in debt

this year

once colleges get that "free money", tuition will once again sky rocket so it will cost, us, $60-70 billion next year.

free college but you can't afford to eat

 

[baileyn45]

"You are flat out wrong.

After the government took over Fannie Mae and Freddie Mac, those bonds were backed by the US Treasury."

Bingo. AFTER, the fed govt took over freddie & fannie. Before these were plain and simply bad debt held by private banks. Now they are in the portfolio of the fed.and are still not guaranteed by the fed govt of the US. The fed is not a govt entity it is a private bank. The fed govt has no obligation to pay this stuff off. It is in the portfolio of a private concern, the fed. This bad debt has not suddenly become good debt.

You bet, banks that held bad mortgages or private label MBS based on bad mortgages lost hundreds of billions on those toxic securities. Banks that held Fannie and Freddie MBS didn't lose a dime in interest or principal."

Bingo again! Fannie and Freddie were private concerns, their bad debt was purchased by another private concern, namely the fed. The lack of losses is due to the fact that the fed purchased them. No one other than the fed would have in their right mind gone near them with out the ability to "print" the money to purchase them.

The Fed didn't buy those crappy mortgages or crappy MBS. They did buy the ones backed by the Treasury

Nonsense. The fed acquired massive amounts of this bad debt with "printed' money. The underlying bad debt is still there hidden in the balance sheet of the fed. Try auditing them some time..

"QE purchased high quality assets from willing sellers. Mostly non-banks".

Really? Based on what? High quality assets? Come on.

Think about it, TARP pumped some where around $440 billion into the system. Problem solved? That would put this "crisis" below that of the savings and loan debacle.

The fed has purchased 1.7 tr in debt held by private banks. Purchasing debt that is performing well from the banks
accomplishes what? According to you it's all good debt. Nonsense the fed "invented" money to clear the "toxic assets"of the big banks, period.

And again please tell me what constitutes toxic assets? and where did it go? if I understand you the moment the fed govt got involved all was well, toxic assets? what toxic assets? the fed loves you.

Buying up toxic assets was the only possible thing the fed govt could do. But they're not allowed, enter the fed..

MBS were never backed by the fed govt until freddie and fannie were taken over by the fed govt. You do realize that now they reside in the portfolio of the fed. The fed govt has no obligatory responsibility to honor those debts. None. The fed is a private concern, the fed govt has no responsibility what so ever.

age-Backed Securities, CMOs - Markets Data Center - WSJ.com

Check the link. FNMA & FMAC, all trading over 100 (par).

If they were trading above par what was the problem?

"The Fed wanted to boost money in the banking system and drop interest rates.
What else were they going to buy but Treasuries and guaranteed, liquid MBS"?"

QE purchased toxic assets from the banks.

"QE purchased high quality assets from willing sellers. Mostly non-banks."

High quality assets? I'll ask again. What were the toxic assets?
And by the way, up until the fed govt took control of fannie and freddie they were completely private institutions whose risk was no more guaranteed by the fed govt than your or my stock portfolio

Right, and after the government took over, they were guaranteed.
And after the takeover is when the Fed bought. I'm glad you finally see your error.[/QUOTE]

And some how you believe this makes bad debt good debt. Nothing changed except where the debt resides..

 

[dblack]

The states should also make sure that all those college graduates get a decent job when they graduate, eh?

Interesting hypothesis. Make your case.

Well it would be approximately the same case justifying the idea that the states should provide an education, right?

 

[dblack]

just another $47 Billion in debt

this year

once colleges get that "free money", tuition will once again sky rocket so it will cost, us, $60-70 billion next year.

free college but you can't afford to eat

Food is next.

 

[Arianrhod]

The states should also make sure that all those college graduates get a decent job when they graduate, eh?

Interesting hypothesis. Make your case.

Well it would be approximately the same case justifying the idea that the states should provide an education, right?

I'm sure you've thought this out in detail. Explain how you think it would work.

 

[Toddsterpatriot]

"You are flat out wrong.

After the government took over Fannie Mae and Freddie Mac, those bonds were backed by the US Treasury."

Bingo. AFTER, the fed govt took over freddie & fannie. Before these were plain and simply bad debt held by private banks. Now they are in the portfolio of the fed.and are still not guaranteed by the fed govt of the US. The fed is not a govt entity it is a private bank. The fed govt has no obligation to pay this stuff off. It is in the portfolio of a private concern, the fed. This bad debt has not suddenly become good debt.

You bet, banks that held bad mortgages or private label MBS based on bad mortgages lost hundreds of billions on those toxic securities. Banks that held Fannie and Freddie MBS didn't lose a dime in interest or principal."

Bingo again! Fannie and Freddie were private concerns, their bad debt was purchased by another private concern, namely the fed. The lack of losses is due to the fact that the fed purchased them. No one other than the fed would have in their right mind gone near them with out the ability to "print" the money to purchase them.

The Fed didn't buy those crappy mortgages or crappy MBS. They did buy the ones backed by the Treasury

Nonsense. The fed acquired massive amounts of this bad debt with "printed' money. The underlying bad debt is still there hidden in the balance sheet of the fed. Try auditing them some time..

"QE purchased high quality assets from willing sellers. Mostly non-banks".

Really? Based on what? High quality assets? Come on.

Think about it, TARP pumped some where around $440 billion into the system. Problem solved? That would put this "crisis" below that of the savings and loan debacle.

The fed has purchased 1.7 tr in debt held by private banks. Purchasing debt that is performing well from the banks
accomplishes what? According to you it's all good debt. Nonsense the fed "invented" money to clear the "toxic assets"of the big banks, period.

And again please tell me what constitutes toxic assets? and where did it go? if I understand you the moment the fed govt got involved all was well, toxic assets? what toxic assets? the fed loves you.

Buying up toxic assets was the only possible thing the fed govt could do. But they're not allowed, enter the fed..

MBS were never backed by the fed govt until freddie and fannie were taken over by the fed govt. You do realize that now they reside in the portfolio of the fed. The fed govt has no obligatory responsibility to honor those debts. None. The fed is a private concern, the fed govt has no responsibility what so ever.

age-Backed Securities, CMOs - Markets Data Center - WSJ.com

Check the link. FNMA & FMAC, all trading over 100 (par).

If they were trading above par what was the problem?

"The Fed wanted to boost money in the banking system and drop interest rates.
What else were they going to buy but Treasuries and guaranteed, liquid MBS"?"

QE purchased toxic assets from the banks.

"QE purchased high quality assets from willing sellers. Mostly non-banks."

High quality assets? I'll ask again. What were the toxic assets?
And by the way, up until the fed govt took control of fannie and freddie they were completely private institutions whose risk was no more guaranteed by the fed govt than your or my stock portfolio

Right, and after the government took over, they were guaranteed.
And after the takeover is when the Fed bought. I'm glad you finally see your error.

And some how you believe this makes bad debt good debt. Nothing changed except where the debt resides..

Bingo. AFTER, the fed govt took over freddie & fannie.

Bingo. The Fed bought no MBS before the government take over.

The fed is not a govt entity it is a private bank.

Wrong. The Fed is part of the government.

The fed govt has no obligation to pay this stuff off. It is in the portfolio of a private concern, the fed. This bad debt has not suddenly become good debt.

The federal government now backs this debt, of course it became good debt.

Bingo again! Fannie and Freddie were private concerns

Bingo. Before the government took over, they were private concerns. Not any more.

The lack of losses is due to the fact that the fed purchased them.

No, the lack of losses came before the Fed purchase, when the Treasury guaranteed them.

No one other than the fed would have in their right mind gone near them with out the ability to "print" the money to purchase them.

Ignored the WSJ link? LOL! Guaranteed bonds trading above par means lots of people want to purchase them.

The fed has purchased 1.7 tr in debt held by private banks. Purchasing debt that is performing well from the banks accomplishes what?

Adds $1.7 trillion in reserves to the system and lowers interest rates.

Nonsense the fed "invented" money to clear the "toxic assets"of the big banks, period.

Nonsense. The banks got stuck with their toxic assets.

And again please tell me what constitutes toxic assets?

Okay, if Merrill Lynch bought 10 mortgages and turned then into a private label (non-Fannie or Freddie) MBS and sold the MBS to Citigroup and the 10 homeowners defaulted on their loans, that could be a toxic asset.

and where did it go?

Citigroup worked the mortgages out with the homeowners and they began performing (paying the mortgage) again or Citigroup foreclosed on the homes and sold them for a loss.

Now if Fannie or Freddie bought 10 basically identical mortgages and the homeowners defaulted, the buyer of the now guaranteed MBS wouldn't know, or care, because he'd get the interest and principal payments with no interruption or impairment.

If the Fed bought this second, guaranteed MBS, they aren't taking a toxic asset off of anyone's hands, because the MBS is a high quality, guaranteed, trading above par, bond.

if I understand you the moment the fed govt got involved all was well, toxic assets? what toxic assets?

Yes, when someone with unlimited resources decides to guarantee something, it's no longer toxic.

And some how you believe this makes bad debt good debt. Nothing changed except where the debt resides..

No, all the guaranteed debt is now good debt, whether the Fed bought it or you did.

 

[Stephanie]

that must be the first bill Ole Bernie has submitted in all them years he's been sucking a living off taxpayers in Congress. and then look at what it is. shake down the American taxpayers for something he promises. what a freaking gig these snakes have going. It's like the JOKE is on us.

the Scary thing is many people falls for it, just like they did with that bs Obama spewed all over us. I hope they like their new Transformation. living in the poorhouse can't be all bad eh?