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An investor, Durrant understands the value of regular deposits into one’s stores. He invited us to make two investments in our own future. One was a financial investment – save a little money each week – and springs from his profession. The other was a spiritual investment – think about a little bit of scripture each week – and springs from his faith as a disciple of Jesus Christ.http://www.keepapitchinin.org/2015/10/06/investments/ ... See MoreSee Less
I read the Book of Mormon all the way through several times as a teenager. Between multiple readings and a knack for remembering anything that comes in the form of a story, by the time I was 19 I knew the Book of Mormon as well as any other 19 year old I met. Now I’m 34, and I routinely meet people whose familiarity with the text far, far outstrips my own. [ 2130 more words. ] http://timesandseasons.org/index.php/2015/10/reading-the-book-of-mormon-for-the-first-time-again/ ... See MoreSee Less
Cool figure with ages and seniority of the apostles. (Frank)http://threestory.com/apostles/ ... See MoreSee Less
Elder Ballard- "When I have a question that I cannot answer, I turn to those who can help me. The Church is blessed with trained scholars and those who have devoted a lifetime of study, who have come to know our history and the scriptures. These thoughtful men and women provide context and background so we can better understand our sacred past and our current practices."- https://lds.org/prophets-and-apostles/unto-all-the-world/… ... See MoreSee Less
"Although some might have a default assumption that outcomes such as “feeling greater spiritual direction” or an increased likelihood to “keep the commandments” are better accomplished in face-to-face settings, this assumption is not borne out by the present study." (Julie) http://www.tandfonline.com/doi/full/10.1080/15507394.2015.1045385 ... See MoreSee Less
The title of today's post ("A woman is a woman no matter what, but manhood can be lost,") is a quote comes from a long and interesting article from the Pacific Standard: Why Men Kill Themselves. There's a lot that is interesting in the article, especially about some of the gender differences that lead to a much higher suicide rate for men as compared to women. [ 2043 more words. ] http://timesandseasons.org/index.php/2015/… ... See MoreSee Less
Saturday's Warrior 2016 - it's back! (And it's updated…) - Alison ... See MoreSee Less
I am excited to introduce Meg Conley as our newest guest-blogger here at Times and Seasons! Meg Conley is a freelance writer and blogger specializing in topics of womanhood and motherhood. Her website, megconley.com, is quickly becoming a nationally recognized platform for women’s issues and day to day inspiration. She has appeared on Good Morning America, Nightline and The Steve Harvey Show. [ 92 more words. ] http://timesandseasons.org/index.php/2015/09/introducing-meg-conley/ ... See MoreSee Less
You might think that this is a strange question, and that of course everyone has a duty to vote. That’s part of being a good citizen, isn’t it? Well, there’s a growing body of opinion that says this isn’t so. It all starts widespread agreement that voting doesn’t make a lot of sense from the perspective of an individual voter. Your chance of swaying a national election—of being the decisive vote—is for all practical purposes zero. [ 2106 more words. ] http://timesandseasons.org/index.php/2015/09/do-mormons-have-a-duty-to-vote/ ... See MoreSee Less
After citing him on multiple occasions here at Times and Seasons (for example here and here), I’m very pleased to announce that Walker Wright will be joining us for a guest blogging stint. Walker is an MBA student at the University of North Texas, and his primary interests are in the theology of work and sacralizing the mundane. Walker has written for… [ 50 more words. ] http://timesandseasons.org/index.php/2015/09/introducing-walker-wright/ ... See MoreSee Less
You've heard of chiasmus, but do you know how it was first identified in the Book of Mormon? Find out in this entertaining video. (Rosalynde, and full disclosure, my brother-in-law is the producer of the video and my father-in-law is its subject.) ... See MoreSee Less
Some thoughts on BSA and gender in the church. ... See MoreSee Less
Teaching the Seer Stone, by Ardis (Ben)http://www.keepapitchinin.org/2015/08/09/in-our-ward-joseph-smiths-seer-stone/ ... See MoreSee Less
A wide-ranging new aggregator of Mormonism-related websites and blogs, categorized by level of orthodoxy. (Kaimi) ... See MoreSee Less
If you are in Provo on July 31st: http://www.byunewtestamentcommentary.com/annual-conference-on-july-31-2015-1-corinthians/ ... See MoreSee Less
Is anyone else just the teeniest bit bothered that the government wants to lend two trillion of our dollars but will not tell us to whom they are lending it or what kind of collateral they have?
Republicans are dead set against nationalizing health care, but they seem to have no problem nationalizing the banking system.
Mike, I really don’t want to turn this into a partisan smack-down (and for the record, I’m far to Obama’s left on health care), but it is interesting that the response to your #1 among conservatives is along the lines of “but this is a crisis!” to which one might fairly respond, “And 47M people w/o health insurance isn’t?”
I’m more than the teeniest bit bothered, especially considering how much information they expect *me* to surrender if I want open a bank account.
Wow Mike, That Totally Republican Senate sure is all over this one! And that Ben Bernanke is about as red as they get! (note, Bernanke is supposedly a moderate republican, but c’mon!) That must by why prominent Republican Barney Frank is defending the lack of transparancy.
Julie is right, partisan Smack Down is a bad idea on this one, especially if you are a democrat. It’s an even worse idea if you have no idea what you are talking about.
My new financial guru is Mark Cuban (www.blogmaverick.com). He should be Secretary of Common Sense for Obama.
And since MLB won’t let Cuban by the Cubs, he’s got more time on his hands these days…
Cuban’s blog is filled lately (the last few months) on all sorts of ruminations about the economy and the bailout.
Boy Howdy, I could sure use a bailout. I don’t quite need that much money, I’d be fine with 10-15 thousand. That would get me out of my crisis.
Where are they getting this money? We are owned by China and other nations.
Mike, many Republicans are horrified at what is going on with these bailouts. Remember that the first bailout was defeated because of Republicans, until some carrots were dangled in front of their eyes. Generally I find typical Republicans are furious! Now, some of the Republican leadership? I think right now the problem with the Republicans is that their leadership doesn’t represent the Republican electorate.
It’s a catch 22 . . . they’re trying to avoid a bank run on any one institution. A bank run on even one institution could cause another Lehman-like domino effect.
If you say where the money is going, to what institutions, it’s may be (probably rightly seen as) a red flag that that’s a weak institution. If depositors see their institution on the list and panic and pull their deposits in a bank run, that would be a big problem.
On the other hand, if you’re a depositor at an institution that’s NOT on the list, and you interpret that as meaning that it’s weak and will fail, then you may have a run on that institution. And that’s a problem.
The fed is a fighting a war to try to prevent any bank runs right now . . . and they see opacity as the only way forward. That way everyone assumes their institution is safe (a condition that MAY actually result in most institutions being safe).
You have to make the call – are they being too conservative in trying to prevent a run? Perhaps they’re being prudent.
Of course, you could also argue that the government has sent in the arsonists to put out the fire.
Just get rid of fractional reserve lending, I say. Fractional reserve lending, with a government manipulated money supply, combined with mark to market account is highly unstable. But fractional reserve lending lies at the heart of this problem . . .
Just four simple words, and you, too, can have 2 trillion dollars.
“Too big to fail.”
6: The governments gets the money by selling Treasury bonds, which indeed means that the long term ability to do this sort of thing is dependent on the willingness of investors – foreign and domestic, to lend the government money at low interest rates.
The government then lends the money out at a higher rate of interest to various enterprises it thinks need rescuing and have the ability to pay the government back. As long as the borrowing enterprise doesn’t fail, we will get the money back with interest. If it does, then we will get cents on the dollar, like any other lender.
And certainly a large part of U.S. debt (public and private) is held by foreign countries and their citizens. Nearly half, in fact.
“Just get rid of fractional reserve lending”
Wow, there is an appallingly bad idea.
Many Republicans are horrified, but clearly not enough â€” it passed the Senate 74-25, after being sweetened with all sorts of pork. And the idea was crafted by a (supposedly) Republican White House.
I’m not a Republican, but this to me represents a sell-out of everything they supposedly stand for. At least putting it toward health care would do some good; buying out irresponsible mortgage lenders just encourages more of the same behavior.
Yup. I’m concerned. The national debt crossed $10 trillion just in the last month or two, right? Now we are up to $10.6 trillion! All of these bailouts might be defensible if we had the money saved. We don’t. How else are we going to be able to repay this money except through printing (i.e. massive inflation)? I don’t even know if we could be taxed high enough to repay this in any reasonable amount of time.
The Fed is not ‘buying out’ anybody. They are lending money. The Treasury bank equity purchases are structured just like loans as well. The TARP asset purchase stuff is likewise only a serious problem if they pay more than market value for what they are buying. There are no giveaways here.
I am not a big fan of these transactions, but with the possible exception of AIG, they are not an unmitigated disaster.
Mark D., the whole point is that they are paying more than market value. If they were paying fair market value, then there would be no need to involve the government, and also the banks would go bankrupt because market value isn’t enough for them to stay solvent. So they pay more than market value, which keeps the banks solvent, but cheats the taxpayer, or actually any holder of dollars who loses their value if hyperinflation eventually takes effect.
Oman, let me clarify.
That should have said get rid of central bank franctional reserve lending.
And why is that an appaling bad idea or are you a neo-Hamiltonian?
All this time we were worried about Obama instituting socialism … we should have worried about the Bushies…
queuno, your joke (#17) isn’t too far from the feelings of many former Republicans and libertarians!
I’m currently reading America’s Great Depression by Murray N. Rothbard (http://mises.org/rothbard/agd/contents.asp). Part 1 explains Mises’ Business Cycle Theory, which is the only economic theory that I’ve studied that has made an ounce of sense to me.
In Chapter 1 Rothbard includes a laundry list of ways a government could act to extend a depression (assuming the veracity of the theory). It matches perfectly with typical government ‘solutions.’
All Ben Bernanke seems to have learned from his supposed study of the Great Depression is how to act in the best interest of the Fed and the banks. He’s doing a great job.
Sara R, there are a variety of different transactions here, some of which have yet to take place. In the case of the Fed loans that the original post is about, the Fed is not acquiring assets, they are lending money. The only valuation involved is for use as collateral.
However, I agree that the government has a finite capacity to borrow money at low rates, and if we keep pushing the limit at some point five, ten, or fifteen years from now we may have no option but to print our way out of debt, which necessarily entails hyperinflation to some degree or another.
Most of these loans, however, are not sunk costs that we can never recover. They will get paid back on a relatively short time scale. Mortgage security purchases I agree are a bad idea, but I don’t think any have actually happened yet, except indirectly through our friendly neighborhood (and now largely federally owned) GSEs.
Good for you. The truth shall set you free and you are on the money. There are a lot of very poor Keynsians and neo-Hamiltonians walking around right now. We Austrians who learned from Mises preserved our capital and are now strategically buying up the Keynsians forced liquidations.
Central bank fractional reserve lending is at the heart of central-government credit manipulation which induces booms and busts and sends misinformation to market entrepreneurs, leading to severe capital misallocation in projects for which there is no real (only false, credit induced) demand.
Anyone who holds to a Keynsian view anymore (and their numbers are getting more smaller and more spooked by the day) has an unreasonable faith in central bank fractional reserve lending and in the benevolence of small-groups of government beureacrats.
By the way, anyone who wants to understand a decent way out of this mess – avoiding a bank run which would collapse the system – may want to read John Hussman’s open letter to US Congress.
If the banking system is too entwined to let weak banks fail spectacularly, then I don’t see a better way forward than what he proposed.
Nate, I guess I’ll have to wait till another time for to hear your defense of central bank fractional reserve lending. I for one look forward to why central bank fractional reserve lending is good from a law professor’s perspective. From my perspective as a former wall-street professional, a 5-year stint as a CEO, a student of economic history and Austrian economics, and as a current homeowner(!), it has been absolute disastrous to the real economy.
Mises is my hero.
Note that Ron Paul was predicting the collapse of our economy and monetary system during the Presidential primary debates, but he was booed off stage by his own party.
Who was it that said “There is no Prophet without honour except in his own country, and among his own relatives, and in his own home.”?
Ron Paul is, of course, no prophet. But he didn’t have to be in order to predict what has befallen us. He has common sense and understands economic behavior (and he’s an Austrian, uninfected by Keynsian nonsense) so it was an easy call.
In the primaries he spoke the truth and a whole bunch of people who understand nothing about economics (in the party that’s supposed to get it), refused to hear it. It was a moment of extreme embarrassment. The others used him as a foil and belittled him – John “Country First” McCain worst of all. Ron Paul is a rarity in Washington – an honest man.
People say “Ron Paul is some crazy guy who wants us all to have gold money.” No. Ron Paul is a guy who wants government power to be checked and one very good way to do it is to peg paper currency to actual gold reserves on hand so that money can’t be printed willy-nilly (by fiat) by an unchecked group of incompetent bureaucrats and used to manipulate the economy or fight un-affordable wars.
Jeff Flake is another Republican completely in the right, yet was savaged by the Republicans. Fortunately, the Republicans that savaged him are disappearing (not getting re-elected) and his views, like Pauls, are being vindicated.
It’s worth pointing out the Establishment Republicans (Wall St Journal, National Review, IBD, etc) were mostly in favor of the bailout and the populist Republicans (Glenn Beck, Rush, Hannity, Laura Ingraham) were against it. As Mike points out, Ron Paul has been way ahead of the curve on this issue, and it is because his free market/libertarian principles are correct.
I say no more bailouts for anybody, especially not our sclerotic auto companies. (Does anybody realize that there are dozens of other auto companies that employ literally hundreds of thousands of people in the U.S. besides the Sick Three?). If GM/Ford/Chrysler go bankrupt it does not mean they disappear, it means they have a way of dealing with the outrageous labor costs and reorganizing as leaner, better companies. That’s the way the market should work. Same for Goldman, Lehman, etc.
Julie, to answer your question, I am extremely bothered by our current situation. Let the market work this all out and after a year or two of pain our economy will grow robustly again.
Perhaps someone would be willing to give a very brief explanation regarding who’s really responsible. Is it Congress? The White House? The Fed? The LDS Church?
I ask this as a person who really doesn’t know, but observes that it’s easy to point partisan fingers.
I’m with you on the auto industry. At least some of those workers can go work for auto-makers that know how to create value in the world instead of destory it.
This is about bailing out the unions, not the auto makers . . .
Perhaps someone would be willing to give a very brief explanation regarding whoâ€™s really responsible. Is it Congress? The White House? The Fed? The LDS Church?
All the above except the church.
I wrote a guide to understanding the current economic crises . . . I left out some parts about mark-to-market accounting and rating agencies because I was worried about it being too complicated, and I focused a little more on the housing market and congress at the end in order to make some political points, but I’ve heard from a couple of hundred people taht they found it useful.
The only problem? You asked for a very brief explanation. Mine is very lengthy and is designed to explain every concept for people who have no background in econ or finance . . .
But you wanted brief
here’s brief: http://blogs.wsj.com/deals/2008/09/24/wall-street-crisis-stephen-schwarzman-explains-it-all/
it explains “what” but leaves a lot of the “why” out of it.
Rarely does anyone deserve the blame all by themselves. If a counterproductive law is passed or policy initiated, it can take decades before its true consequences are readily apparent, and by then it is part of the furniture that large constituencies do not want to see removed.
Congress enacted laws that strongly favor debt over equity, leading to unstable highly leveraged commercial and financial institutions. Congress and the White House supported unwise relaxation of credit standards over a period of about two decades now. They cooperated in creating GSEs with an implicit public subsidy that only now are we having to pay for. They demanded easy money from the Fed to paper over structural weaknesses in the economy. The Fed accomodated them in spades. Banks and other investors put enormous sums into fundamentally risky investments and ignored the systematic risk of the credit default insurance market they created. The FDIC made the same mistake…
I haven’t noticed that having 47 million people without health insurance has somehow brought the nation’s economy to its knees.
Nor have I noticed any evidence that people are avoiding sickness and death simply because of their having health insurance. Having a “good” prescription drug program like, say, Medicare Part D, hasn’t shut down the obituary pages of the newspapers.
Perhaps we’d all be better off if nobody in the nation had health insurance.
Leaving out the rating agencies is like telling the story of Little Red Riding Hood and leaving out the wolf.
“Leaving out the rating agencies is like telling the story of Little Red Riding Hood and leaving out the wolf.”
If only the story of little red riding hood consisted of 10 wolves . . .
The genius known as Mark Cuban had this to say earlier today:
You all do realize that anyone who buys a new car is UNDERWATER the minute you sign the papers and drive off the lot ? That you get further and further underwater every single day ? Maybe thats why so few are buying new cars ? We haven’t instituted a bailout for their underwater car loans.
Yes, I’m vastly concerned. Our entire government is in a handout mood with the economy in crisis. Democrats & Republicans . . . two peas in a pod. Both are irresponsible and must be thrown out – now!
Would you prefer snakes or spiders, bourbon or wine, cigars or cigarettes, bombs or bullets? It doesn’t matter, Democrats and Republicans are both to be refused. The problem is much greater for Democrats because they don’t have any hold outs — like the legislation that would have tightened the lending and credit regulations, each and every Democrat voted against the regulations and the Democrats once again (with just a very few notable exceptions) support the government give-away bailout at tax-payer expense with more pork than a pig farm. They have each and every one betrayed us and need to be thrown out – now!
The problem? The Damnocrats and Republic-i-cannots have agreed to spend, spend, spend and then raise taxes to cover the one–in-three government employees for each employee in the private sector supporting this gluttoness feeding fest. It is an unmitigated disaster as we slip toward a government that takes over every incompetent business enterprise in the United States and gives it to the taxpayers. Beyond reprehensible and beneath contempt, they have betrayed the Constitution and the United States.
And Obama’s first order of business? Banning drilling in Utah for oil to raise oil prices!
â€œSome [most] people think the Federal Reserve Banks are U.S. government institutions. They are not â€¦ they are private credit monopolies which prey upon the people of the U.S. for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money lenders. The sack of the United States by the Fed is the greatest crime in history. Every effort has been made by the Fed to conceal its powers, but the truth is the Fed has usurped the government. It controls everything here and it controls all our foreign relations. It makes and breaks governments at will.â€â€”Congressional Record 12595-12603 â€” Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932
â€œIt is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.â€
There’s oil in Utah?
Here is more info on that Peter:
Roosevelt has a lot of oil activity going on right now….it’s a good production site.
37: The Federal Reserve is not privately controlled in any normal sense of the term. The President nominates and the Senate confirms the Federal Reserve chairman and the members of the Federal Reserve Board of Governors.
Members banks are required to purchase stock in a local Federal Reserve bank equivalent to 6% of their capital. They are also required to hold a portion of their deposits in reserve there. Member banks are normally paid a 6% dividend on their stock, and usually nothing on reserve deposits. Any surplus funds are required by law to be paid to the U.S. Treasury – typically about four billion dollars a year (as of 2000).
Suppose you started a small commercial bank with 10 million dollars in capital. You would be required to purchase six hundred thousand dollars in local federal reserve stock, which would normally earn a dividend of thirty six thousand dollars a year, accounting for a maximum possible 0.36% return on your investment attributable to your federal reserve participation. That doesn’t sound like a highway to riches to me.
If it has escaped notice, shareholders in banks are not exactly doing so well right now. Banking is a rather risky business – if only a small fraction of loans go bad, the bank equity is essentially wiped out. When the FDIC takes over an insolvent bank, the shareholders generally don’t get anything.
To the degree that member banks can influence Federal Reserve policy, they have every incentive to be conservative and to uphold a sound monetary policy. Inflation is very bad for banks with fixed rate loans – hence the S&L crisis. And yet the primary problem with the Fed the vast majority of the time, especially over the last decade, is that it pushes interest rates too low, causing credit bubbles, excessive inflation and so forth. That doesn’t sound like the banks are running the show at all.
On the contrary, the Fed is always under considerable pressure to goose the economy from Congress and the executive branch, both of whom care relatively little about the impact on banks themselves (or for that matter about the long term impacts on the economy at large). The main reason why we have an independent Fed, is that history suggests that direct control by Congress (which actually has the constitutional authority here) would be even worse.
RE: #38 & #40
PeterLLC and Amanda,
Yes, there is a form of oil in Utah. But most of it is captured in shale rock which makes it extremely hard to extract. The principal reason it hasn’t been exploited is that it takes more energy to extract the oil than would be derived from the oil extracted. What is being worked with far greater success is the natural gas. The terrain of eastern counties of the state are being ‘quilted’ with gas rigs and wells. Utah also has substantial deposits of low sulphur coal which presently supplies a significant portion of the state’s electric energy. The sulphur content is so low in Utah coal that if the scrubbers are taken offline, the exhaust from the coal fired generators would still meet EPA standards. However, federal law requires that the scrubbers remain online at all times despite that fact, resulting in several millions being added every year to the rate base which customers must pay.
42: There is plenty of conventional oil in Utah. “Uinta Basin Black Wax Crude” to be specific.
I don’t understand blaming this on Republicans. Did it pass due to overwhelming numbers of Republican votes in Congress? Has Obama vowed to repeal it?
Budgetary bill are suppose to originate in the CONgress, not the senate. So when the Senate took up the JOB to pass TARP, I believe it was unconstitutional. I would like to know where are the checks and balances. I also think in the near future, we will see history repeat it self regarding governmental intervention into the banking system (ie, the depression). Don’t get me wrong, I’m all for policies, procedures, rules and regulations. Im not for wholesale bail out for the whole banking system that has already made fortunes on unethical practices.
I beleive you will see a couple of things from the Actions of the Fed and King Ben. Hyper Deflation followed by hyper inflations. Thats right, we are all loving those low gas prices now, but I thinking that 1st to 2nd quarter next year the effects of the BAILOUT money entering into the money stream will start to inflate prices. Just some common sense. Comments questions?