More diarrhea out of Santelli's mouth this morning. He says, JP Morgan's $2 bln trading loss was the Fed's fault.
Poor Steve Liesman was trying to rebut him, but he got beat up bad by the tag team of Santelli and Kernan.
Liesman, if you're reading this: JP Morgan traded out of its OWN CAPITAL. The level of reserves in the banking system (which is what the Fed directly controls) HAD NOTHING TO DO with JP Morgan's bad trade.
Moreover, if Santelli is suggesting that JP Morgan was "incentivized" to take massive risk because low rates limit its profit opportunity, he's an idiot. JP Morgan is a commercial bank and a commercial banks make loans, that's their primary business activity. And if done wisely it's a HIGHLY PROFITABLE activity for a bank.
JP Morgan's loss was due to hubris and ego. That's the way all traders eventually go down. It had NOTHING to do with the Fed, Santelli. Want to debate that?? I'm no Steve Liesman. I'll take you to school again!
21 comments:
Mike,
I just listened to that on XM, Leisman is too "polite".
sounds like "Mr Free Market", ie Rick Santelli thinks business morons like Dimon (kids running lemonade stands make more money) should have the right to enjoy a free subsidy in the form of higher policy rates! What a hypocrite!
Matt,
I sent Liesman and email saying he shouldn't be bullied by Santelli and Kernan.
Mike- I saw you on CNBC with Santelli last week. One suggestion for next time. Don't ask Santelli a question? He never answers a question anyway and it just gives him an opening to say what he wants to say, taking time away from you. Use all of the time you have to make your points. make Santelli interrupt you.
I asked a question just to make Santelli look stupid, because I knew he couldn't answer. I gave the answer, but it couldn't be heard over his rants.
"…kids running lemonade stands make more money…"
Great line.
They also don't steal your money.
Just a suggestion, but maybe you should tone down the insults a bit? People are just going to end up hating you (if they don't already).
I'll risk it, but thanks anyway.
BTW...I don't see any reason to be cordial to these people. They should be called out for what they are: dogmatic, misinformed, egotistical idiots.
No one forces you to read this blog. I don't even ask people to register as many other blogs do.
hey Anon,
This reminds me of the time that Mike had Ann Coulter on his show and Ann forbid Mike from saying the name "Donnie Deutch".
There was a moment of silence and then all you heard was Mike saying: "Donnie Deutch, Donnie Deutch, Donnie Deutch, Donnie Deutch......"
And then she hung up!
LOL! It was one of the best moments I ever heard on radio!
so is santelli calling for more regulation?
I sent John Carney at CNBC a note asking him how come so many of his buddies at CNBC are idiots. His reply made me believe he doesn't care. John may understand MMT, but I add him to the list of CNBC losers.
Matt's right. So many of these guys seem to think the role of the government is to be the "borrower of last resort" or even the "pigeon of last resort" - someone who will give you free, healthy interest yields for nothing.
Maybe if they would spend more time advocating for policies that would actually grow our economy, then people like Dimon would have something productive to invest their money in that wasn't a loser.
@ marg
There's a limit to what JC can do at CNBC. He knows that and is proceeding accordingly. Trust the process.
He is one of the good guys, basically on the side of reality and sanity, even though we may disagree over policy choices.
Dan "So many of these guys seem to think the role of the government is to be the "borrower of last resort" or even the "pigeon of last resort""
Right. Socialism for capital. Labor? Not so much.
Actually, socialism for capital has a name. It's called Mussolini-style "fascism," and sometimes "soft fascism" today. But behind soft fascism is hard fascism, as we see with the coordinated political repression of Occupy and other peaceful protesting.
@markg and Tom:
JC doesn't care. I'm sure he's getting paid a lot to do his little thing and keep quiet. He's happy and comfortable. It takes balls to care. I quit a good-paying, easy, position at Fox because I believed in things. It was as much a protest as anything else. Carney's posts are, half the time, critical of MMT and intended to point out its flaws. I go on TV and make Santelli look like a jerk; I'll probably never get invited back again, but who cares. I believe in truth and I'm willing to take the hits even if that means not making a lot of friends.
Mike, I think that John cares about improving understanding and is being strategic about it. He knows he has to put this out gradually, otherwise there will be exploding heads and mindless opposition as a consequence. Every parent knows that it's impossible to socialize children overnight. He gets there is a need for patience in bringing people around.
He also has policy differences based on his more Austrian economic viewpoint. So does Ed Harrison, and he is an ally. I regard John as an ally, too, and he is doing a useful job as devil's advocate. Trust the process. It's moving forward on many fronts, and John at CNBC is one of them.
We have to be resigned to people taking the monetary understanding that MMT and Circuitism provide and using this for different policy formulations than many of us would prefer. But getting the debate on the ground of reality, that is, an operational description, is vitally important to short circuit that propaganda based on ignorance, lies and fear.
Mike and Tom
You guys make a good ying and yang here. Tom with the patient ,cool headed, methodical approach to reform while Mike is more in your face, charismatic, intolerant of fools and he's tired of waiting when its obvious what the hell is going on.
Thing is we need both. We need the Mikes yelling form the rooftops that "This shit has gotta stop" and have the Toms working a little mind meld on the bastards.
Radical change does not happen in small steps. The Civil Rights movement needed force and unwillingness to compromise with the offending parties. We'd still be discussing it today if not for the Mikes of the Civil Rights era.
This is one of the areas where I disagree with the MMR crowd. Yes they are describing what we have; an over reliance on monetary policy, self imposed constraints on our govt which keep its powers limited in economic and monetary matters and a horizontal system of money creation which dominates but those forementioned things ARE THE PROBLEM. There is no way to get meaningful reforms while asking these current systems to do it. They have ZERO interest in meaningful reform. The system must be TAKEN from them.
Yes it will be difficult. MMR seems to want it to be easy. Just implement a few new "Rules" of spending and new metrics to watch and everything will be okay. Its natural for them to be that way since Cullen and Mike are traders and they worked the system well. It works for them.
@ Greg
Well, I would qualify that a bit. I agree with Mike that fools and morons should not be suffered, not liars either. However, JC is not one of the those, in spite of the company he keeps over there. It's not his business to confront them directly, as it is for guests like Mike.
Also, CNBC is not Fox. I applaud Mike's telling Fox to stick it since they are just a propaganda machine that no one with principles should deal with.
But John is playing a useful role in the belly of the beast at CNBC. In the intelligence community, it is called being a "defector in place." Having someone there that understands MMT is a huge advantage that we should not underestimate, let alone disparage.
Mine was mainly a comment on your contrasting styles Tom. I agree with you about the specific case of JC. Its mostly good to have him doing what he is doing...... but I like the idea of Mike putting frequent buzzes in his ear to urge him to do more.
CNBC is not Fox I agree but they are much closer to Fox than to the truth.
In spite of what I said about the MMR guys, I would still take their world over the present one. Cullen and Mike at least acknowledge not just the potential harm, but the real harm already done by a financial sector/govt that is run by neo liberal thinking.
A President Roche would likely find a place on his economic team for Warren Mosler and Scott Fullwiler.
(I doubt he'd ask Randay Wray)
"CNBC is not Fox I agree but they are much closer to Fox than to the truth."
US mainstream media are about entertaining propaganda that sells to the public, often by pandering. by and large, they are not news as reporting of confirmed facts and competing theories for understanding their implications.
Fox, and everything Mordred touches, becomes polluted. The other mainstream media are at least more subtle than that.
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