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Cashin On Fisher's Fiscal Fortitude

Tyler Durden's picture


Reflecting on yesterday's monetary-policy-hope-driven rally, UBS' Art Cashin prefers to focus on Richard Fisher's very frank (and succinct) speech on the limits of monetary policy and the importance of fiscal policy.  Urging everyone to read it, and send it to your Congressman and Senators, he reminds us that Fisher is the only Fed policymaker to have been a banker and a money manager.


UBS' Art Cashin: Another Great Speech - Dallas Fed President, Richard Fisher was in Scotland Tuesday morning. He was speaking at St. Andrews as part of the commemoration of that institution’s 600th Birthday (and as he cleverly slipped in - the 129th birthday of John Maynard Keynes and the 289th anniversary of the baptism of Adam Smith). Mr. Fisher is renowned for his candor and he’s the only Fed policymaker to have been a banker and a money manager. If you can access it, please read the whole thing. Once you’ve read it send a copy to your Congressman and to your two U.S. Senators. Here’s a portion to whet your appetite:

The Limits of Monetary Policy and the Importance of Fiscal Policy


Here is the rub. As mentioned, the FOMC sets monetary policy for the nation, for all 50 states—its influence is uniform across America. The same rate of interest is charged on bank loans to businesses and individuals in Texas as is charged New Yorkers or the good people of Illinois or Californians; Texans pay the same rates on mortgages and so on. Why is it that the Texas economy has radically outperformed the rest of the states? A cheap answer is to revert to the hackneyed argument that Texas has oil and gas. It is true that we produce as much oil as Norway and almost as much natural gas as Canada. And we have some 60 percent of the refineries of the United States. But remember that the numbers I showed you are employment numbers. Only 2 percent of employment in Texas is directly generated by oil and gas and mining and related services. We are grateful that we are energy rich. But we are a diversified economy not unlike the United States, where business and financial services, health care, travel and leisure activities and education account for similar portions of our workforce. Why, then, do we outperform the rest of the United States?


To me, the answer is obvious: We have state and local governments whose tax, spending and regulatory policies are oriented toward job creation. We have the same monetary policy as all the rest; our income is taxed at the same federal tax rate; and we are equally impacted by Washington’s tax, spending and regulatory policies. But we have better fiscal policy at the state level. We have no state income tax; we are a right-to-work state; we have state and local governments that, under both Democratic and Republican leadership, have for decades assiduously courted job creators—so much so that we have even outperformed the job creation of most every other major industrialized economy worldwide, as shown by the previous slide.


Whither Monetary Policy?


Now, back to the hue and cry of financial markets, and the question of further monetary accommodation. Interest rates are at record lows. Trillions of dollars are sitting on the sidelines, not being used for job creation.


We know that in areas of the country where fiscal and regulatory policy incents businesses to expand—Texas is the most prominent of those places—easy money is more likely to be put to work than in places where government policy retards job creation. During the next few weeks as I contemplate the future course of monetary policy, I will be asking myself what good would it do to buy more mortgage-backed securities or more Treasuries when we have so much money sitting on the sidelines and yet have no sense of direction for the future of the federal government’s tax and spending policy. And with the president’s health care legislation awaiting resolution in the Supreme Court, we also know that no business can budget its personnel costs until that case is decided. If job-creating businesses have no idea what their taxes will be, are clueless about how federal spending will impact their customers or their own businesses and cannot budget personnel costs—all on top of concerns about the risk to final demand posed by the imbroglio in Europe and slowing growth in emerging-market countries—how could additional monetary policy be stimulative?


A good theoretical macroeconomist can acknowledge that a great deal of liquidity is, indeed, going unused at present. They might likely argue that further monetary accommodation would raise inflationary expectations by magnifying the fear that the Fed and other monetary authorities are hell-bent on expanding their balance sheets and, consequently, the money supply so dramatically that inflation will inevitably follow. The result, the good macroeconomist would deduce, would be salutary: It would scare money out of businesses’ pockets and into job expansion and would lead individuals to conclude they better spend their money today rather than have it depreciated by inflation tomorrow, thus pumping up consumption and final demand.


I beg to differ. I would argue that this would represent a form of piling on the already enormous uncertainty and angst that businesses face with our reckless fiscal policy. To me, that would be the road to perdition for the Federal Reserve. There is in the marketplace a lingering fear that the Fed has already expanded its balance sheet to its stretching point and that an exit strategy, though articulated, remains theoretical and untested in practice.


And there is a growing sense that we are unwittingly, or worse, deliberately, monetizing the wayward ways of Congress. I believe that were we to go down the path to further accommodation at this juncture, we would not simply be pushing on a string but would be viewed as an accomplice to the mischief that has become synonymous with Washington.

Well said, Mr. Fisher! Very well said.


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Wed, 06/06/2012 - 09:38 | 2498986 Looney
Looney's picture


Wed, 06/06/2012 - 10:04 | 2499076 slaughterer
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Wed, 06/06/2012 - 10:17 | 2499126 The Monkey
The Monkey's picture

Nice, shorts are dropping like a rock this AM. Hopefully, this continues for a while.

Wed, 06/06/2012 - 11:17 | 2499303 ndotken
ndotken's picture

"Once you’ve read it send a copy to your Congressman and to your two U.S. Senators."

I'm really not sure what good that will do since those criminals in Congress obviously don't give a damn about doing the right thing .....

Wed, 06/06/2012 - 09:39 | 2498989 John Law Lives
John Law Lives's picture

"there is a growing sense that we are unwittingly, or worse, deliberately, monetizing the wayward ways of Congress."

Ron Paul pointed this out LONG ago.

Wed, 06/06/2012 - 09:46 | 2499010 LawsofPhysics
LawsofPhysics's picture

Since 1913, the elites always knew this would be the case.  The debts can never be paid, period.  From the standpoint of both capital and resources, we have been borrowing from the future.  Print all the capital you fucking want, it will continue to become exponentially more difficult to extract those future resources.  This is especially true with the fascism going on everywhere and the failure to allow real consequences for bad behavior.  Fuck the paper-pushers, they will be the undoing of us all, same as it ever fucking was.

Wed, 06/06/2012 - 09:55 | 2499037 mcguire
mcguire's picture

sounds better if you dont use the word "fucking" so much..

Wed, 06/06/2012 - 10:00 | 2499047 Global Hunter
Global Hunter's picture

thumbs down "fucking this" and "fucking that" is an accurate way to convey just how fucked up things are, how fucked these perverted banksters and deviant politicians are and just how fucked we are all for letting this happen.  If you can't see that you are fucked.

Wed, 06/06/2012 - 10:53 | 2499275 Gavrikon
Gavrikon's picture

The fuck, you say!

Wed, 06/06/2012 - 10:49 | 2499265 TheCanadianAustrian
TheCanadianAustrian's picture

But fucking is a very cromulent word.

Wed, 06/06/2012 - 11:46 | 2499560 CClarity
CClarity's picture

VERY cromulent!  Embiggened even.

Wed, 06/06/2012 - 10:45 | 2499252 ITrustMyGut
ITrustMyGut's picture

I like the use of Fuck! 

Wed, 06/06/2012 - 12:12 | 2499694 smb12321
smb12321's picture

But if you recall the Clinton "surplus" years (debt was a relatively benign $5 T  - less than a third of todays) there was much talk of paying down the debt.  At the time, energy was cheap, computers were spurring productivity rates higher, the market was maxing out and things looked rosy.  But folks were - at least for a few moments - talking about paying down the debt.

Wed, 06/06/2012 - 13:36 | 2500049 oldman
oldman's picture


But, but----but Clinton like the word 'suck"

so how did he get into the conversation?

having fun    om

Wed, 06/06/2012 - 13:41 | 2500091 earleflorida
earleflorida's picture

clinton's good years came at the expense of future generations, period!

he passed NAFTA which evolved into CAFTA under Bush# 43

it was a boom for american industrial/ manufacturing sectors in the short term --- but, as all good-intention trade-agreements finally peter-out without a realistic visionary plan, we see visually the devastation of our own country for the benefit of others?

the bust of industrial/ manufacturing to ~10% of the U.S. Economy has devastated good paying jobs. Sadly, we have a service orientated economy currently at 90% and growing.

This is why clinton balanced the budget, or it very well could have been bush #41 if he had kept his mouth shut about "Taxes".

Ps. Clinton spearheaded the U.S./ China's fast-track [endorsement] acceptance into the WTO [12/11/01 via Bush #43 adm.].


Wed, 06/06/2012 - 09:47 | 2499013 Whatta
Whatta's picture

Yeah, not much new ground plowed there. Just driving home the same shit.

Wed, 06/06/2012 - 10:02 | 2499061 azzhatter
azzhatter's picture

there is little new ground to be plowed. The most fields are between the ears of the sheeple

Wed, 06/06/2012 - 09:41 | 2498994 Texas Ginslinger
Texas Ginslinger's picture

off topic; the Baltic Dry Index seems to be stuck at 904.

Has been there for several days, as far as I can tell.

Frozen in place like the short term Greek bonds..??

Wed, 06/06/2012 - 09:49 | 2499022 LawsofPhysics
LawsofPhysics's picture

Simple, the "markets" are no longer relevant as there is no real market.  Barter at an all time high around the world (hell just look at e-bay traffic lately).  Ignore the paper bullshit and just remember, when real goods and services stop crossing boarders, troops will.

This has been the way for over 2000 years.

Wed, 06/06/2012 - 10:40 | 2499229 Temporalist
Temporalist's picture

What about the ebay traffic?  Is there an article or link to which you are referring?

Wed, 06/06/2012 - 11:47 | 2499570 delacroix
delacroix's picture


Wed, 06/06/2012 - 11:05 | 2499321 Sudden Debt
Sudden Debt's picture

and if the BDI is 6 months ahead of the market... we're in for a serious drop soon...


Wed, 06/06/2012 - 09:41 | 2498996 Turd Ferguson
Turd Ferguson's picture

"a growing sense"
What fucking planet do these idiots live on?

Wed, 06/06/2012 - 09:44 | 2499003 SilverTree
SilverTree's picture

Just connect the dots Turd!

Wed, 06/06/2012 - 09:58 | 2499043 boogerbently
boogerbently's picture

How about Bernanke gives US the QE money and GS/MS/JPM.... has to pay it back ?

Wed, 06/06/2012 - 09:42 | 2498997 bigdumbnugly
bigdumbnugly's picture

I believe that were we to go down the path to further accommodation at this juncture, we would not simply be pushing on a string but would be viewed as an accomplice to the mischief that has become synonymous with Washington.


somehow mischief just doesn't seem to be an apt enough description.

Wed, 06/06/2012 - 09:43 | 2499000 Larry Darrell
Larry Darrell's picture

So let me get this straight.

The problem isn't that they are DELIBERATELY "monetizing the wayward ways of Congress."

The problem is that there is a "growing sense" of this fact.  In otherwords, this prick (Fisher) is worried about the masses waking up to this fact?

Wed, 06/06/2012 - 09:47 | 2499016 LULZBank
LULZBank's picture

Or maybe he means, the problem is the Oil supplies are declining and (Peak Oil) and there isisnt anything to absorb or to put up as collateral for the "Oil backed" currencies.

Wed, 06/06/2012 - 09:56 | 2499039 Bicycle Repairman
Bicycle Repairman's picture

The fractional reserve system requires ever increasing debt.  You won't borrow, so Congress does.  The FED prints the money Congress borrows.  They work hand in glove and have done so for 100 years.  Who is Fisher trying to kid?

Wed, 06/06/2012 - 11:23 | 2499180 slewie the pi-rat
slewie the pi-rat's picture

listen,  BiChez (you too mrT.urd):  if tyler and artC, probably both pleasantly warmed by the sunrise, are telling us to read this and pay attention, maybe we oughtta pay attention

this is the same point that slewie was trying to insinuate into the masses, here, last summer during tyler's chikckelLittleAct leading up to the debtCeiling mega-shitsky boning of weThePeople by congo (and rPaul, too, btw, unless youR fuking brain-dead)

to wit:  the USA is outta control, fiscally, and theCongo better stop looking out for the criminals in sunday-school-teacher garb who are hanging them bags of money every day, but the interest of thePeople, b/c the banking system will not continue to function for too much longer if they do not

and yes, panic and a wholesale shit-show are resultants of perceptions and how the digestion of same by humanoids proceeds:  to the bank and the mailbox?  or to the gun cabinet?

these chicken-littles will come home to roost;  the fiat-bankster "economics" does have its theoretical aspects, and fisher, tyler, the chairangel artC, and slewie all understand theses aspects or are pretending to, in my case, ok?

to wit, in slewienomics: QE, ZIRP, sterilization of CTRL+Pand re-electing the same captured interests over & over = can-kicking

these are a few critical points in any system which cycles and grows;  in the US system, this is one of the most important of these systemically critical points

the facts of the goobermint's capture and subsequent insanities and the deep sleep of the sheep, especially here on zH, as these comments continue to illustrate so clearly, does not negate the criticalities of the economic and political system to which, for better/worse, we are tethered till death do us part

whom are you trying to kid?

according to tyleresque and pi-radical thought, theory, and wisdom, the political consciousness of the bolggers here < a fifth grader's

why?  b/c the vast majority of zeroHeads get their political "training" from the family, public school, and TV, with the last of those selcetively reinforcing the wortst aspects of the first two, ok?

you really do NOT belong here on zH at this point unless you are willing to arc the TV offa a tall structure

you will not be able to begin to understand the best of what your parents and teachers tried to give you, unless and until you do so

yes, you are psychologically bound by yer TV conditioning

deal with it, now, please!  until you do, you will remain in the situ where you are perfectly willing to sell your birthrights for a bowl of pottage + the pleasure of being ass-fucked while getting yer check from the mail-box

take the televisions and MSM programming outta your homes and away from you and your families NOW, b/c until you do, you are part of the problem, not part of the small, "non-elite" groups who understandand and are forming up now to be part of the array of possible solutions

a bunch of mechanically-programmed humanoid bots running around with guns thinking the TV is telling them what to do and whom to shoot, hang, or otherwise dispose of isn't the answer even fightClub proposed, now, izzit?

since tyler seems to enjoy that big MSM dick up his beostted ass, and has gone to predicidting  QEs and their market effects, rather than helping the people he has attracted complete step1 in  the proper (for this site) appraoch to theReal, slewie and others will continue to do the heavy lifting while he pretends he can still be a "winner" in the eyes of the MSM and their lack-keys

after all, tyler can't be expected to bite the hands that feed him for producing this soap-opera

can he?

Wed, 06/06/2012 - 12:15 | 2499705 smb12321
smb12321's picture

Please get a drink or a lay - which will better calm your shattered nerves.

Wed, 06/06/2012 - 12:37 | 2499780 slewie the pi-rat
slewie the pi-rat's picture

you have once again displayed yer level of understanding of the most important issues of this election year!

wlile yer here, or pretending to be, why not share with the readerhip when it was that you stopped imbibimg the selective conditioning of TV and the MSM, you absolutely achetypal mononic shitheaded asswipe?

i'll wait...

Wed, 06/06/2012 - 14:25 | 2500321 Bonesetter Brown
Bonesetter Brown's picture

Preach it.  Turned the TV off in 2004 and it changed my life. 

Wed, 06/06/2012 - 14:10 | 2500247 oldman
oldman's picture


Bravo, bravissimo!!!!!!!!!!!!!!!!!!!

Thanks, pi-rat for your faith and inspiration. This oldman has been sitting here all morning thinking about how to say what you wrote above------your elegance in essay far excedes my meager lack of facility with language, and you saved me a lot of work as well.

I sat here considering, also, the un-employed and how the warnings of the Reuther brother in the 50's and Harry Bridges in the 60's regarding trading employment for a vested interest in the an automated system requiring fewer employees has come to be. Wondering how to express the the reality of a species whose only problem remains to be how do we share the goods and services of the beautiful capitalist system---which this oldman is extremely comfortable with----how do we put all those who want to work on the job with so much productivity from the machines. How do you get by the slavemasters, Koch boys, Europe's Lords of the Manor, etc who loe **&&^%$%^&(*(&*^

Wed, 06/06/2012 - 19:29 | 2501435 janus
janus's picture


dr. janus says -- keep takin/tokin/drinkin whatever it is you're t/t/d, and then double it.

good show.

slewie's caught fire.

one thing: give Tyler a break...we will all have greater responsibilities soon -- such is the travail of growth.  furthermore, tyler can't be expected to fetter himself (nor the rest of us who have graduated from kindergarten) with the needs of the neophytes -- let them read the archives.  

onward and upward, mi amigo!

we're not scourin rehab meetins anymore, after all



Wed, 06/06/2012 - 11:14 | 2499358 Matt
Matt's picture

Bicycle Repairman:

"The fractional reserve system requires ever increasing debt.  You won't borrow, so Congress does.  The FED prints the money Congress borrows.  They work hand in glove and have done so for 100 years.  Who is Fisher trying to kid?"


I think this is incorrect. The fractional reserve system only requires ever increasing debt when combined with the Keynesian philosophy that every year must be a growth year, that recessions are somehow 'evil'. That, combined with excessive leverage and gambling by those seeking big bonuses. The system survived contractions in the money supply before these things came to pass.

EDIT: plus perpetual government deficits, which are part of the Keynesian thinking.

Wed, 06/06/2012 - 11:21 | 2499416 Bicycle Repairman
Bicycle Repairman's picture

What happens to debt, leverage and deriviatives, if deflation occurs?

Wed, 06/06/2012 - 11:53 | 2499602 slewie the pi-rat
slewie the pi-rat's picture

dude!  snap out of it!

this whole effort by fisher, artC, and tyler is about Conress's responsiblities under theLaw!

too easy for ya?

Thu, 06/07/2012 - 10:29 | 2503565 Bicycle Repairman
Bicycle Repairman's picture

The Law.  You mean like that "Magna Carta" stuff they already flushed?  That Law?

Wed, 06/06/2012 - 11:49 | 2499583 slewie the pi-rat
slewie the pi-rat's picture

careful here, ok, matt?

this isn't about arguing the fine points of keynsianism or fractional reserve bankstering, or fiat bankstering

it is about fiscal policy run amuck and trying to get people to focus on the problem and the most obvious first step in approaching it, intelligently (altho arcing the TV off a tall struncture must come first individually, according to fightClub)

you can't engage leo in these side-shows so you now wanna straingten out bike_man?

this piece is about theCongressional duty to approve the budget and set the fiscal course of the unitedStatesOfAmerica and the need for fiscal forititude

if you think fisher and artC and tyler wanted this to lead to i discussion of  fractional reserve or keynesian philosophy, may i suggest that you are, somehow, deluded

no, this isn't as much fun as pretending keynesianism can be understood better if people just listen to you

>>this is about theConstitution and the actual job description which the fuktards like the esteemed rPaul are supposed to be working toward in a MUCH MORE balanced WAY

you were taught this as a child (before you became adult @ 18);  remember?

do you remeber being taught about the rights of property and person?

do you reacall where and how these rights are enshrined?

yep!  all this incredibly boring and obviously irrelevant stuff you were taught is in the same place, too (see >>, above)

however, the MSM isn't focusing on that...?

well, they are in the EU!  those rules to protect certain interest are about to get smoked by other interests unless angela grows a pair, toot sweet

this is polity and politics;  the banksters aren't really ever on any ballots, are they?  and , can you chow me where they are mentioned in the Constituition?  is it in there where "money" is defined for the USA?

please finish any thoughts about how there is nothing higher than humanity in the universe, how evolution will fix everything, and how irrelevant theConstitution has become in the MSM, first, b/c that bullshit ain't in there, either!

i'll wait, ok...  ?

Wed, 06/06/2012 - 22:33 | 2501985 Matt
Matt's picture

I'm sorry, did you have a point?

Is your point that every single post under an article should only be under a very narrow range related to the article? 

Who designated you Forum Police, to arbitrarily draw invisible lines about what is on or off topic?

Thu, 06/07/2012 - 02:25 | 2502472 oldman
oldman's picture

pi-rat     I can't een express how pleased I a that you are here aong----(keyboard probles--no- letter and no- letter and no 'enter key   I a not sick or drunk or stoned)     Anyway keep going and thanks for kicking so uch troll ass today    you're the captian of this ship             o                                                                                                                                                                                                                                                                                                                           

Wed, 06/06/2012 - 09:43 | 2499001 Jahbulon
Jahbulon's picture

Well said indeed.  But it has way too much common sense to be understood by a politician.

Wed, 06/06/2012 - 09:47 | 2499015 orangedrinkandchips
orangedrinkandchips's picture

nah, they understand the logic alright....but it's not in THEIR best interests....plain and simple....


It's painfully obvious that Texas is doing it right. Love em or hate em, they are doing it right.

Wed, 06/06/2012 - 09:44 | 2499005 LULZBank
LULZBank's picture

And there is a growing sense that we are unwittingly, or worse, deliberately, monetizing the wayward ways of Congress. I believe that were we to go down the path to further accommodation at this juncture, we would not simply be pushing on a string but would be viewed as an accomplice to the mischief that has become synonymous with Washington.


No Shit.

He forgot to add...

"I swear the only reason we went off the Gold standard and an parasitic banking and financial model was to keep the politicians and feudals in check."


Wed, 06/06/2012 - 09:44 | 2499006 bigwavedave
bigwavedave's picture

the problem is the difference between:

1. spend. print. spend. print

2. print. spend. print. spend

Wed, 06/06/2012 - 09:45 | 2499007 FL_Conservative
FL_Conservative's picture

And, of course, he's not a current voting member.  So who's going to unplug Bernanke's keyboard in Fisher's place?

Wed, 06/06/2012 - 10:02 | 2499058 The Monkey
The Monkey's picture

At least Fisher called out the tactics for what they are. This is one of his more aggressive speeches.

Wed, 06/06/2012 - 09:45 | 2499009 Umh
Umh's picture

It may be coincidental or deliberate, but they are monetizing the government debt. I'm pretty sure it's deliberate after all they have been doing so for most of 100 years.

Wed, 06/06/2012 - 09:48 | 2499017 fuu
fuu's picture

Don't fed the trolls Art.

Wed, 06/06/2012 - 13:24 | 2499830 slewie the pi-rat
slewie the pi-rat's picture

et tu, eh?

what, exactly, are you dong which disables you from addressing the issue that this guy (who does work for the fed) has served up to artC and which tyler had tried to package in a way thay even "just a monkey with a gun" could understand?

political "cat got yer tongue"? huh?

Wed, 06/06/2012 - 15:52 | 2500227 fuu
fuu's picture

I felt like making a Max Fisher joke? Also for the record I have not owned/shared/borrowed/rented a TV in my adult life.

To furthur answer your question why do I care what a Fed official has to say? Is Fisher really off the reservation or is he just playing bad cop as suggested above?

While it is exciting to have a Fed guy talk about "reckless fiscal policy" there is a bit of cog dis even there. He states earlier in the piece that the Fed sets MONETARY POLICY and that Texas has better fiscal policy. Yet here he is talking about Fed Fiscal policy as reckless. Is their monetary policy reckless as well? Are they seperate policies? Why the swappity doo on the terms?

I also find his comment about whether teh Fed is deliberately monetizing the wayward ways of Congress to be disengenuous. As we spoke of earlier in the year some people feel/believe/think that the Fed is the Congress or at least the creation of Congress. A couple of people have even gone so far as to suggest that debt held by the fed is congress owing congress money and changing congress interest. One guy even tried to get a bill passed that would have wiped that debt away. So for me the answer is quite simple, yes the fed is monetizing the wayward ways of congress.

Hopefully this asswipe has provided whatever it was you were looking for.

PS - Was Tyler trying to demonstrate that 1.QE+25 is not a sure thing?

Wed, 06/06/2012 - 17:05 | 2500992 slewie the pi-rat
slewie the pi-rat's picture

my bad, bro

i wuzzafearedUmiteB entering the mittens+rPzone (silly me?)

so thxz for not taking ooo,000,OOO-fence

Wed, 06/06/2012 - 17:12 | 2501025 fuu
fuu's picture


Mittens can suck a bag of dicks AFAIAC. Still holding out hope for that Wonder Ticket RP + RN or RN + RP.

Wed, 06/06/2012 - 19:14 | 2501386 janus
janus's picture

nice thinkin,fuu

Wed, 06/06/2012 - 21:25 | 2501799 fuu
fuu's picture

i doubt that

Wed, 06/06/2012 - 09:48 | 2499019 Seize Mars
Seize Mars's picture

Yeah Fisher is well spoken. But clearly he is acting like a politician. In other words, "it's those profligate spenders in Congress, it's their fault."

No, Mr. Fisher, you can't blame a snake because it bites. I blame you, because you are a counterfeiter. You have pretended to be a businessman when you are a shill and faceman. Nice words. They will be forgotten, as will you and your sad, cruel and if I may say petty career.

Wed, 06/06/2012 - 09:49 | 2499020 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

excuse my ignorance, but isn't Texas taking the same path as the Celtic Tiger, poaching buisnesses from neighboring states with the lure of low/no taxes?  How did that end?

Wed, 06/06/2012 - 10:04 | 2499072 DosZap
DosZap's picture

excuse my ignorance, but isn't Texas taking the same path as the Celtic Tiger, poaching buisnesses from neighboring states with the lure of low/no taxes?  How did that end?


No we aren't luring anyone,their coming here for relief from government tax tyranny,too damn many in my book.

Before we know it these dislocated liberals will screw up Texas.

Wed, 06/06/2012 - 11:20 | 2499397 Matt
Matt's picture

isn't it quite amusing (if it weren't so frustrating) that people who leave one place due to unfavorable conditions, go to a place where better conditions exist, and then try to implement the same policies and ways of thinking that made the previous place unfavorable?

Wed, 06/06/2012 - 11:25 | 2499291 Cthonic
Cthonic's picture

Poaching? Do you infer this because the state's income tax rate is 0%? Since state income taxes are deductible from federal taxes, they're not much of a basis for state-to-state comparison. Texas has a franchise tax, typically 1% on revenues in excess of a million a year.  Also has some of the highest (real and business personal) property tax rates in the nation (for residences, typically around 2% of home value and averaging over 4% of income). Now the state is forcing the collection of sales taxes by online retailers:


Wed, 06/06/2012 - 16:45 | 2500884 Breaker
Breaker's picture

"...but isn't Texas taking the same path as the Celtic Tiger, poaching buisnesses from neighboring states with the lure of low/no taxes?  How did that end?"

The plea of the statist: "If only we could have taxes high everywhere, things would be great."

Wed, 06/06/2012 - 09:49 | 2499021 Conman
Conman's picture

Its obvious the real way to stimulate is to hold meetings and teleconference calls then do nothing. don't worry about awful macro news.

Wed, 06/06/2012 - 11:25 | 2499444 Matt
Matt's picture

Actually, where the Federal Reserve stands, I don't think doing nothing is the problem. I suspect doing nothing would be an improvement, in fact, as opposed to using various means of money printing to try to solve fiscal, legislative and solvency problems. 

Wed, 06/06/2012 - 09:50 | 2499023 midgetrannyporn
midgetrannyporn's picture

"...its influence is uniform across America"



Wed, 06/06/2012 - 13:00 | 2499902 slewie the pi-rat
slewie the pi-rat's picture

hey!   congats!

you found something from a FED guy to ridicule!

anyrthing he said make sense?  you know, the part poor Art and tyler were trying to get you asswipes to consider?

Wed, 06/06/2012 - 09:52 | 2499028 Richard Head
Richard Head's picture

"Growing sense"?  It's fucking intentional, dickhead!

Wed, 06/06/2012 - 09:53 | 2499030 midgetrannyporn
midgetrannyporn's picture

(speaking of Texas) But we have better fiscal policy at the state level...



Wed, 06/06/2012 - 09:54 | 2499031 LULZBank
LULZBank's picture

Rather than listening (reading) to these stupid pundits, I would recommend everyone to watch and thoroughly understand the below 3 videos:

1. Mike Maloney's Debt Collapse.

2. Chris Martenson's presentation at GoldMoney in Madrid.

3. David Graeber's book Debt: The First 5000 Years or his presentation.

They will give you the complete picture and help you understand the nature of the beast. How the ponzi worked and how it will possibly unravel.

Links below.

Wed, 06/06/2012 - 09:55 | 2499036 adr
adr's picture

I like a magic oil inventory decline this morning to cover the huge rise in oil futures over the last few days.

More people are waking up to the fact that QE does not help anyone other than investment banks.

If the global economy was actually recovering it could survive without endless injections of monopoly money. That needs to be said and understood by the masses.

Any Fed action in June should be called the last straw. Every American should pull every dollar out of the TBTF banks and deposit the money in credit unions. Then immediatly stop paying all credit card bills, car loans, student loans, and mortgages. Votes no longer carry any power, but wallets still do.

Wed, 06/06/2012 - 09:56 | 2499041 Quinvarius
Quinvarius's picture

No moron, you are bailing out banks to maintain a corrupt and dying status quo that you created.  You can not possibly stop.  You speak gibberish.  No one believes you.  You have no credibility.  You will print more money.  If you don't, the money you have already created will become worthless overnight as your banking system and yourself go under.  Your best option now is to just STFU because every word that comes out of your mouth is a verifiable lie.

Wed, 06/06/2012 - 10:01 | 2499056 kito
kito's picture

and send it to your Congressman and Senators..

why, so we can scare them into more liberty stripping measures? at this stage of the end game, that is about the only thing they all manage to do in perfect harmony........the more they know, the worse off the average citizen will be.............there is no way to unwind what is approaching....congress cannot fix deep structural problems that has eroded this country for the past 3 decades...........all congress can do is tighten their grip...............

Wed, 06/06/2012 - 10:02 | 2499062 Bartanist
Bartanist's picture

Yes, but what Congress. Wasn't there something about over 90% of all bills, including spending bills, are passed unanimously after hours with no one reading them.

Congressmen have no right to ask to see the bill before voting on it and no right to know who is putting the bill up for a vote.

Freaky, eh?

Under a system such as that, one can blame Congress, but it is most likely in reality the cabal that overthrew the US in a coup and now run everything, with just the pretense of a functioning republic.

Somebody posted a link to a video on this information, but after watching it, misplaced it.

Wed, 06/06/2012 - 10:03 | 2499066 scatterbrains
scatterbrains's picture

Crude up 2.2% so far this morning just on the threat of more twistage..I hope they jam it right up Bernank's ass... 4 or 5 bucks just on rumors and I'd be happy.

Wed, 06/06/2012 - 10:05 | 2499079 tictawk
tictawk's picture

Has he just discovered "monetizing the wayward ways of CONgress?".  We are in a heap of trouble!

Wed, 06/06/2012 - 10:08 | 2499093 spanish inquisition
spanish inquisition's picture

Why is it that the Texas economy has radically outperformed the rest of the states? A cheap answer is to revert to the hackneyed argument that Texas has oil and gas. (The cheap argument doesn't look all that wrong),id:texas_unemployment_rate,calc:,,id:brent_crude_oil_spot_price,type:indicator,calc:&zoom=10&startDate=&endDate=&format=real&recessions=false

Wed, 06/06/2012 - 11:10 | 2499337 Cthonic
Cthonic's picture

Cheap(er) energy, low(er) land prices, shale frack plays, and, most importantly, tons of unsustainable gov't borrowing... sound familiar?

Wed, 06/06/2012 - 10:08 | 2499097 StockHut
StockHut's picture

I didn't know someone with that mindset actually existed within the fed.  Thank god.  Fuck the rothschilds.

Wed, 06/06/2012 - 10:37 | 2499171 Elmer Fudd
Elmer Fudd's picture

"there is a growing sense that we are unwittingly, or worse, deliberately, monetizing the wayward ways of Congress." sounds like when your daughter comes up to you and says "I think I'm pregnant"

I would also add that listening to the FED heads is about as pointless as arguing over professional wrestling.


Wed, 06/06/2012 - 10:41 | 2499237 Snakeeyes
Snakeeyes's picture

I agree with Fisher. Unemployment is a failure and housing is a failure. Now the Fed wants to do MORE of the same.

Look at the charts. Mortgage purchase applications have atrophied, unemployment is terrible and they continue the same failed policies.

Wed, 06/06/2012 - 10:57 | 2499289 web bot
web bot's picture

Why are the most obvious statements, the most brilliant?

Wed, 06/06/2012 - 11:14 | 2499366 Umh
Umh's picture

Because almost everyone agrees with them. And people like to think they are brillant.

This is one of the reasons that people trying to talk you into something will state a large number of things that you are in agreement with and then sneak in the one you probably dislike; it works on most people most of the time.

Wed, 06/06/2012 - 11:10 | 2499350 ElvisDog
ElvisDog's picture

Fisher is not a hero. He is a two-faced pussy. He is the designated "Fed bad cop" who comes out now and then with tough speeches on the limits of Fed policy. But when the rubber meets the road, he rolls over and goes along with whatever Bernanke et al. want to do. Until he really stands up for the blah-blah he gives us in these speeches, I don't care to listen to him.

Wed, 06/06/2012 - 11:29 | 2499469 Cthonic
Cthonic's picture

"The enemy of my enemy is my friend."  He certainly isn't making any friends at the New York Fed.

Wed, 06/06/2012 - 11:24 | 2499439 Grand Supercycle
Grand Supercycle's picture

SPX rally warning & USDX retracement warning now confirmed & good (counter trend) equity upside expected.

Wed, 06/06/2012 - 11:34 | 2499490 electricgorilla
electricgorilla's picture

This was a great read. What I pulled from his speech is how much of a political unit the Fed has become. There job is to have resolve when the rest of the word is panicking. I still think the Fed's tools are pretty useless when it comes to actually stimulating the economy. I'm guessing the Fed comes out tomorrow with wording about increasing the target inflation rate from 2% to 3%. I also think they will try to create a perception that everything is still ok and America is still growing albeit slower than usual. The world leaders are pushing forward in there incompetance as we move towards the end game. Ayn Rand explained this whole implosion situation and man destroying himself well. Financially I'm looking to position into digital gold through futures if we get any wording on increased easing/stimulus. I'm also watching to short the dollar. It's been trading in the 83-82.40 range for awhile and if we get a strong easing/stimulus announcement and the dollar breaks below 82 with gusto I'm looking to go short.

Wed, 06/06/2012 - 12:16 | 2499699 Centurion9.41
Centurion9.41's picture

Fisher is fantastic.  Seriously, one can only hope the other Fed players recognize the truth he speaks.

However, what I took away from his thoughts is this.  What happens when the players, in the Fed & politics, come over to Fisher's side of the boat?  Now all that "liquidity" pumped in is unleashed as inflation.

The question is can, in today's digital $USD world, the money be pulled back in with the DEL/BackSpace key fast enough?  Will there be a Volker standing over the key?

If you think the velocity of money was fast when it was printed, wait until you see its velocity at the speed of digital.

Our Fed is flying a jet blind, with out a pilot's license, while thinking they are driving a 1930's Studebaker.

P.S. - Tyler, re "lokigod23" below.  She's cute and all, but how did she get past the porch?...

Wed, 06/06/2012 - 13:32 | 2500018 Stimulati
Stimulati's picture

Texas also has regulations against cash out refis so they didn't have nearly the housing debt boom-bust that other states had.

But otherwise I agree with Fisher that more Friedmanism through another round of QE will be useless for the economy.

Also, there won't be consumer inflation (or growth) when there is no mechanism to get all that printed money into the hands of the middle class. 

Wed, 06/06/2012 - 13:37 | 2500062 janus
janus's picture

see, fisher is a real progressive -- a classical liberal.  these thugs in power are communists/statists/centralplanning-creeps; do NOT confuse them with liberalism.

mankind needs work, it is an intrinsic function of satisfaction.  

THAT'S the rub -- these pukes at the fed/tresury have never worked a day in their life...never.  janus has perma-calluses on his hands, bitchez.

we need thinkers who understand doing.

keep on keepin on, Cashin!


Wed, 06/06/2012 - 17:51 | 2501174 Random_Robert
Random_Robert's picture

Richard Fisher is the only evidence that there is at at least one IQ above 45 occasionally walking the hallowed halls of Mariner Eccles....


This was awesome reading in spite of the fact that he fails to recognize that Texas' attraction for business due to its low tax rate structure is relativistic in nature- ie: if the other 49 states followed suit and dropped their income taxes, then Texas would have a hard time enjoying the same fruits of its current competitively favorable position, yes...?

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