
Fed Report Shows Magical Thinking on Safety of Wall Street’s Banks - cinquemb
https://wallstreetonparade.com/2020/05/fed-report-shows-magical-thinking-on-safety-of-wall-streets-banks/
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chaorace
Not sure if I trust this source, can anyone attest to the credibility of Wall
Street On Parade? The site itself seems to have an almost accusatory tone
baked in.

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curiousllama
This article advocates for a very specific policy solution, so I wouldn't take
this headline at face value.

That said, the Fed has signaled that it will intervene without limit to ensure
the liquidity, if not the long-term solvency, of major banks. Long-term
impacts of that position aside, the very premise of this article suggests that
the banks are rock solid for the near term.

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ZhuanXia
I find monetary policy a hard subject to reason about. It is too complex for
me to understand. Yet the political economy of it is such that I would expect
the expert classes to be corrupted in some way. Still, I just act like I
believe the experts have it under control. The phrase "epistemic learned
helplessness" comes to mind.

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salawat
I've still got a lot of lit to read on the topic, but in terms of what it
effectively manifests as, monetary policy seems to be some sort of bastard
child of psychology and economics in the sense you hardly ever see the lever
pulled until people start to lose faith in the system. There's probably some
economic/fiscal buzzword for it, but that is the observation I've noticed just
from reading on things.

The factor of just how much psychology plays into it, or at least "seems to,
but doesn't", is what is most interesting to me.

Given J. P. Morgan's insistence that banking is first and foremost a business
built firmly on its capacity to inspire trust, I can't really square the idea
of monetary policy, its application, and its mechanism of action being
entirely divorced from the collective psychology of the base participants in
the economic system. Though I'm pretty sure I'll find some literature that
suggests otherwise once I get looking.

