And Wow: Fed's Hoenig Says United States Has "Deeply Undermined Free-Market Capitalism"

Tyler Durden's picture

The Fed mutiny has arrived:

  • HOENIG SAYS U.S. HAS `DEEPLY' UNDERMINED FREE-MARKET CAPITALISM
  • HOENIG WARNS OF ESCALATING SERIES OF CRISES WITH RISING COSTS
  • HOENIG: LARGE FINANCIAL FIRMS CAN EXPECT BAILOUTS IN FUTURE
  • HOENIG SAYS BIG FINANCIAL FIRMS MUST NOT HOLD ECONOMY `HOSTAGE'
  • HOENIG: LARGE FIRMS WERE `GAMING' CAPITAL STANDARDS PRE-CRISIS
  • HOENIG:BIG FIRMS `HAVE SIGNIFICANT INCENTIVES' TO INCREASE RISK
  • HOENIG: TOO-BIG-TO-FAIL FIRMS POSE `GREATEST RISK' TO ECONOMY
  • HOENIG SAYS BIG FINANCIAL FIRMS ENJOY `HUGE' FUNDING ADVANTAGE

And the last one:

  • FED'S HOENIG SAYS `HISTORY IS ON MY SIDE'

Step. away. from. the. bathtub. Tom.

In other news, someone at the top finally tells the truth about this shitshow of a banana republic.

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max2205's picture

2 years too late

asdasmos's picture

INSIDE JOB - Covers this point as well

 

TRAILER: http://www.youtube.com/watch?v=FzrBurlJUNk

 

Takes a closer look at what brought about the financial meltdown.

 - http://www.imdb.com/title/tt1645089/

 - http://www.sonyclassics.com/insidejob/

 

Inside Job download links:

 

http://www.megaupload.com/?d=5WKDONR5&w=631&h=392

http://www.megaupload.com/?d=PG45KU95&w=631&h=392

http://www.megaupload.com/?d=2KBJDUX4&w=631&h=392

(http://www.icefilms.info/ip.php?v=126424&) Movie Site

 

Wait 45 secs then download it. I provided a couple in case it gets taken down. You only need to download one.

 

Awards & Nominations:

 

Winner          Directors Guild Award               Outstanding Achievement in Documentary
Winner          New York Film Critic Circle         Best Documentary
Winner          National Board of Review          Top 5 Documentaries of the Year
Winner          Writers Guild Awards                Best Documentary Screenplay

Nominated     Academy Awards - Oscar           Best Documentary

Nominated     Critics' Choice Award                Best Documentary
Nominated     Producers Guild Award              Best Documentary
Nominated     American Cinema Editors Award Best Documentary Edited
Nominated     COFCA Award                          Best Documentary
Nominated     CFCA Award                            Best Documentary
Nominated     Gotham Awards                       Best Documentary
Nominated     Sierra Award                           Best Documentary
Nominated     OFCS Award                           Best Documentary
Nominated     PFCS Award                            Best Documentary
Nominated     SDFCS Award                          Best Documentary
Nominated     Satellite Award                       Best Motion Picture, Documentary
Nominated     WAFCA Award                         Best Documentary

vast-dom's picture

hope you don't mind, just wanted to post a faster link for the doc Inside Job:

http://www.fileserve.com/file/CC6zaUf/defaced-insidejob-xvid.avi

SilverBaron's picture

I saw it in the movie theatre.  OK film for someone who knows nothing about the cause of the meltdown, but nothing new to readers of this site.

equity_momo's picture

I thought it should be listed as  "comedy" rather than a documentary. It was very enjoyable and for the uninitiated would have been thought provoking but nothing new apart from the hilarious interviews with Establishment dummies. Perhaps Hoenig has just seen it.

MayIMommaDogFace2theBananaPatch's picture

Napoleon Dynamite plays the part of a weasly former Fed-Governor.

The performance is totally belivable with Dynamite playing the character, dodging and squirming like a child in the principal's office.

You almost think it is really Fred Mishkin.

flacon's picture

I've been wanting to see this film for months! I'll download it at home this evening. Thanks for providing the links. 

Wynn's picture

I was dissapointed for the most part. Old news. Saw it all happen in real time at ZH.

tellsometruth's picture

I have not seen yet but heard/suspect the same, but wish it was streaming on netfux to wake up apathetic masses

PuppetRepubl1c's picture

@ Wynn

 

agreed it is old news (and years late) but at least some people are paying attention.

 

I really enjoyed the parts of the movie where they interviewed Harvard/Columbia business professors and asked them flat out "Should the people who author such papers advocating massive banking deregulation have to disclose that they are being paid hundreds of thousands of dollars to shill for xyx industry?"

 

I was amused when the professors all said no, but when confronted with the example of doctors authoring papers advocating for certain pharmaceutical products they imediately back tracked and said "that is completely different".  It was a great gotcha moment, like a deer caught in the fucking headlights.  The movie was worth watching for that scene alone.

MayIMommaDogFace2theBananaPatch's picture

I thought what the arrogant bastard said was something like:

while there is no formal policy or rule, etc., he simply could not imagine someone in his profession choosing to NOT reveal such a conflict of interest.

Laughing 'til it hurts...

Fred Hayek's picture

It's not a bad movie but "deregulation" is practically the mantra of evil according to the film even in instances when it makes it clear that the problem was that existing regulations weren't enforced.  I remember there being 6 or 8 instances where I cringed or rolled my eyes because of this. 

RmcAZ's picture

+++ Just watched this last night. Not enough blame on the government.

tellsometruth's picture

not very surprising to me... left vs right still very alive (anyone see the bloomberg debate on 2 party system "making america ungovernable?"

I don't know how people can think that corporations can be evil and governments (daily shown on msm) can be around the world, but "not ours"  

 

I am a Man I am Forty's picture

the Fed and banks have a monopoly on money and should be strongly regulated, so should insurance companies

I am a Man I am Forty's picture

my comment was step 1, step 2 is to allow competing currencies

faustian bargain's picture

Which, if you think about it, is de-regulation.

The Fed and the banks don't need to be 'regulated', they need to be cut loose from their fascist attachment to government and allowed to fail in the market, as they will once Big Brother stops protecting them.

asdasmos's picture

@Fred Hayek

Glass–Steagall Act?
PuppetRepubl1c's picture

@Fred Hayek

 

The movie does mention "deregulation" as a bad thing, but with ample evidence to back up the specific regulations they are talking about.  I can see how this would be a confusing subject for many people.  Because of Fox News most people who watch tv 8 hrs a day have been conditioned to believe "deregulation" is always positive.  Of course any rational person can can see that yes in some cases it is a good thing and in some cases deruglation is a blatant takeover of the government by moneyed interests (Goldman Sachs).

 

The movie specifically blames much of the problems on the repeal of Glass-Steagall which is 100% true and correct in every way.

AnonymousAnarchist's picture

Regulation isn't bad, government regulation is bad.

The irony in Hoenig's statement is that, if there is a central bank, there is no free market. Either he has a different definition of "free market" or his comment is about 100 years too late.

PuppetRepubl1c's picture

I agree with your statement, but who is going to regulate the banks if not the government?  Self regulation?  Laughable, especially since CEO's could care less about the solvency of the institutions they leave behind as long as they get large bonus checks up front.

In an ideal world the "market" would regulate banks but in practice this doesn't work as well one might hope.  People demand banks carry deposit insurance, yet the only institution willing (and gullible enough) to insure bank deposits is the federal government.  Because of the ease with which bankers can defraud auditors/regulators no sane private entity would agree to insure them, nor would they actually have the reserves to make good on the insurance if they were willing to.

I'm honestly not sure there is a good way to regulate banks as long as there is fiat Ponzi money creation.  I think this was an inevitable trian wreck written in the cards ever since 1913.

asdasmos's picture

Read harry markopolos' book, 'No One Would Listen'... he gives a great idea on how to regulate...

 

incentivize it, whistleblowers and prosecutors receive a percentage of the fraud collected on top of their wage......

InnerG's picture

I just started watching this and had to stop it 15 minutes in for this very point:

"Reagan started a 30 year financial deregulation period and deregulated savings and loan allowing them to make risky investments with depositors money - within 10 years this costs taxpayers 124 billion dollars."

 

stupid assed smear tactic

the problem is not deregulation, it is the government bailing out those failures which is the primary inducing cause of people's blind faith with having their money within corrupt institutions

 

is this "documentary" really worth continuing?

smells like crap-oh-lah to me

PuppetRepubl1c's picture

Apparently you are also unaware that Reagan raised taxes, sold arms illegally to Iran, and supported amnesty for millions of illegal Mexicans.  Despite these often omitted shortcomings (cough.... fox news) i still think he was a good guy, but please don't deify him it makes you look ridiculous.  Reagan was a good president but not perfect, one of the things he, and every president since him, has gotten wrong is to trust economists/bankers that "nothing will go wrong" if we remove all of the sane laws that were put in place following the great depression.  After all those guys were old and cranky, they don't understand how smart the new generation of banker is, nothing could possibly ever go wrong.  

 

Yet every time we repeal one of these barriers the system becomes even more risky and entangled.  Financial deregulation in this fashion was a complete and total disaster, it did not lead to economic wealth, only bubble creation in which a few profit and the many suffer.  The separation of investment banking from deposit banking was completely sane and reasonable, we should have never fucked with it.  It is not even a left vs right issue, it is a sanity vs greed issue.

 

Also, nothing ever changes.  Banks are always looking for more ways to GAMBLE with depositor money (1 because thats how they make money & 2 there is an established precedent that they will get bailed out if they fail).  The reality is only fools would ever invest their money in a bank if there wasn't some form of FDIC insurance (a result of the great depression).  Thus the rub.  If you want to have bank deposits insured you have to regulate them, otherwise people would just buy precious metals and forget the whole thing.

 

Because lobbyists from the banking industry have infected every single crack of our government no party (Republican or Democrat) is immune to their bribery.  Thus this cycle keeps repeating: Banks lobby for 1000x 1 leverage -> regulators initiallly say maybe thats a bad idea (but can't remember why because they have no practical work experience and failed upwards in life due to nepotism) -> banks give said congressmen/regulators hundreds of thousands of dollars in campaign contributions -> regulators look the other way -> banks make massive short term profits due to lowered reserve requirements - > system crashes and ordinary citizens are screwed 1st by the reckless behavior of the regulators/banksters and then screwed again by being forced to bail out said banks.

 

wait 5-7 years, Rinse and Repeat

 

 

 

InnerG's picture

 

uh where in my post did you get that I was deifying or even defending Reagan? You apparently are unaware of what I meant since I wasn't defending Reagan one bit and u have fallen for the 'documentaries' clap trap.

President Reagan = the government . . . right?

Well when I said the government is the problem, I was referring to Reagan and beyond; the whole pathetic TBTF scheme

 

I can tell you where in your post YOU defend the government:

In any/every insidious suggestion that more regulation = good and needed while less regulation = bad and disaster you have fallen prey to the ludicrous idea that more government is the answer

 

Surely you can now see how the smear/slant works? It's devastating on feeble minds

 

p.s. like many presidents, Reagan was only good when he was campaigning which are merely words

p.s.s. I still haven't touched the rest of this 'documentary' and still don't see any reason to if more regulation/government institutions is the answer. Howabout just some high level accountability through regulation and supreme laws already out there first . .

PuppetRepubl1c's picture

Nowhere in my post did i say we need "more government".  Separating investment banks from deposit banking has nothing to do with creating "more government" (which sounds suspiciously like a typical republican straw man argument).  "Regulating" banks means simply not allowing investment banks to merge/acquire deposit banks/insurance companies so they can leverage their gambling with insured deposits (which always leads to a government bailout).  The answer is so simple it is shocking.  Of course this will never happen because the mega banks have become exponentially larger ever since these regulations were done away with.  

 

Perhaps i misunderstood your first statement, but looking at your original text it still seems like you were saying the documentary was a smear tactic against Reagan.  You can understand why i came to this conclusion as this is what the republicans say every single day to shield themselves from criticism for being in bed with the banking industry.  I am glad to hear this is not what you meant.  

 

Also, if you recoil every time you hear the word "regulation" and in your mind translate that to mean "more government" there is no hope in finding a solution.  You can easily regulate the banking industry without creating new government departments.  You just need to have a SEC/justice department with balls who will go after these crooks and put laws on the books that prevent this type of systemic risk pollution from spreading.  Of course the reason this hasn't happened is precisely because whenever someone says we need to do something about the banking system (separating investment banking from deposit baning) the republicans instantly react with the knee jerk reaction of "no more government!".  Thus nothing ever gets solved.  

 

InnerG's picture

also, I don't want bank deposits insured as that is where the hoodwink comes in

 

believing another man or institution is always there to take care of you or your money is naive at best

 

"The Best Way To Rob a Bank Is To Own One"

Cursive's picture

This just lends more credence to TPTB/TBTF financial terrorism plot.  The timing of this couldn't be more convenient to signal the turn.  Only thing missing was this:

 

HOENING:  THE TOP IS IN

HOENING:  WE'RE IN THE MIDDLE OF THE GREATEST DEPRESSION

HOENING:  I'M A PUPPET FOR THE BANKING CLASS

HOENING:  BERNANKE DREW THE SHORT STRAW

HOENING:  THERE BUT FOR THE GRACE OF GOD GO I

subqtaneous's picture

no kidding.  nothing like the stink of a groundswell of revolt to get you dancin' the Charleston.

 

SWRichmond's picture

Perhaps they are beginning to choose sides.

serotonindumptruck's picture

Yeah, as if such a decision would save them from their fate at the end of a rope.

Miles Kendig's picture

As the Flappers put the fluffer to shame

Arch Duke Ferdinand's picture

""HOENING:  THE TOP IS IN

HOENING:  WE'RE IN THE MIDDLE OF THE GREATEST DEPRESSION

HOENING:  I'M A PUPPET FOR THE BANKING CLASS

HOENING:  BERNANKE DREW THE SHORT STRAW

HOENING:  THERE BUT FOR THE GRACE OF GOD GO I""

 

Vancouver BC...# 1 world's safest and most liveable city

Canada's four Western Provinces have it all...Food, Water, Oil, Minerals, Timber AND ONLY 12.5 MILLION CITIZENS...led by gateway city Vancouver BC....Canada's/North America's Geneva of Switzerland...

http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/02/vancouver-bcworlds-most-liveable-cities.html

ColonelCooper's picture

Real Estate market slow up there, huh?

Douche.

Junk.

Arch Duke Ferdinand's picture

Douche?   Junk?

...hmmmmm....Oil, Gold and Silver will be sold for FOOOD you fool.

Within a month or less.

...Where is the food and water?

ColonelCooper's picture

If you live there, why would you want to invite the Golden Fucking Horde? Or do you sell real estate there?  I could care less about your comment other than you paste it verbatim on every single thread.

Douche

Spammer

Junk

ColonelCooper's picture

And believe me, I won't be spending my gold or silver on food for many years,  Fool.

At least I'm not stupid enough to invite the whole damned world to my backyard.

anarchitect's picture

Real estate market is FAR from slow. One of the most overpriced cities in the world, with houses at 9 times median annual income. Google "crack shack or mansion" and play the game, trying to distinguish the crack shacks from the Vancouver mansions, that look like garages, listed for $1M.

Also populated by the same sort of lefty imbeciles that infest California. All the weirdos and outcasts moving progressively West until they can go no further because of the ocean.

And at risk for a Big One, just like California, with serious liquefaction because much of the area is built on a river delta.

Pass.

ivana's picture

No doubt Canada is great place. Have friends there and they report really good quality of life.

Only problem is that you are really close to powerz and have  a lot of resources.

Bad news is that Canada is already acquired by powerz and your quality of life can only go down.

Just check USD-CAD & USD-MEXPESO - you are in new AMERO fiat system man.

Good luck

Bananamerican's picture

a junk?

Does Hoening read ZH?

blindfaith's picture

no, but Timmy and Ben do.  That is how they know how to stay ahead of the anger and how to dodge it.