Feb 27, 2013|
Warren Mosler on Ben Bernanke's comments from yesterday
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
There are two things that I look for when booking -- for our show. I wanna make sure that they're older than me our next guest qualifies on that count that's getting harder and harder to find. In order to make sure that they're smarter than I am and that's always been pretty easy for me defiant this guest is author and economist mr. Warren mostly joins us today. Good morning or Dario Horry -- So Warren wanted to ask you eve had time to reflect on the careers of Alan Greenspan who was in office gosh an awful long time. And now Ben Bernanke's career is is that president is. Coming to a conclusion who's done the better job as Federal Reserve president. I -- I'd have to -- Greenspan of course. The reason. They're -- -- -- -- They're both in the wrong way but it it mattered more with Bernanke that it didn't read. So Greenspan made less mistakes than Bernanke that's why he -- There were less. There are less important. You know what he did was less support -- -- -- -- all that much what he did it with predictive matter more what he did. -- vet yesterday I am assuming you watched some of the Bernanke testimony and he no stated again he said. That bond buying is helping the economy 85 billion dollars a month a bond there is helping the economy do you agree. I disagree life and what I see is -- turning over ninety billion interest in companies treasury. Every year from the bond buying and that's interest the company company whatever that they had. Up bought the securities and so they're tactic -- commodity put any attack an economy that can't afford. It and I think we -- this -- the -- never gets discussed is -- -- the the the whole aspect of savors being damaged and and gosh I talked to listeners every day and you know I'd I'd I met somebody yesterday when they had more than 600000. Dollars in a savings account right. Earning virtually no interest that's that are asked to be hurting. I I would think that's hurting the economy. -- all my parents used to have part of it -- -- kind of you know two years ago their Ricky 5% -- imported -- -- about you're going out. And like Matt. Minister is -- -- -- -- that it won't spend any. Specific. Does -- worried about running out of money. Don't know if you look at the other thing that happened just a rate cut sabres went by to zero -- -- -- -- or what went down maybe a couple. The rest went to bank's net interest margin so back to back in. Wider spread which is okay but there outspent. Wire at the banks more profitable wore -- wire bank stocks still depressed that's the case. There's now a lot of growth and packed it in the course a lot of the they -- profit on lending goes to take -- battle for later making up for battle that played capitol building capitol. Probable -- -- only now so -- they're they're trying to win but there are creditworthy people vote. I asked Eric rose Ingraham about the plight of savers and and he -- in his statement to me was. Yeah you're right Barry you know savers are getting punished. By the -- interest rate environment that we have to do in order to get the economy going. But like how many years do we have to wait before the delegates going with this failed strategy. -- our elected government is in -- Payer it. Look at that that it got lower rates -- -- expense caused direct interest -- into the deficit currently out that actually get. Typical rates. So there. The money again not going to the economy that would violent content which is okay. What does this. You need to have access lower than -- consent so government. It is a large deficit to make a more attractive rates in Bernanke has said it is a research paper did at the Fed to four. Protect XX and right after the papers that they called fiscal effect of lower -- that showed that lower rate as a government spending to go to. That is what statistic you can interpret that and more competitive. But he should say that the testimony land. I don't know. Now it. It's it's it's it's confusing out there and I think that's what's causing a lot of consternation on the part of individual investors they don't know. How to how to play the war in it's their and then and then you've got the the banks. You know the the that the banks are getting impacted by this -- it there's a quote. By Elizabeth Warren yesterday saying this is -- quote it is in today's Wall Street Journal says the big banks are getting breaks in the little banks are getting smashed now you old a small bank do you agree. That's a little banks are being treated unfairly relative to. The JP morgans of the world and the Bank of America's the world. Yes but for different reasons. To put in capital side went to support -- I'm looking -- cost of funds which is critical but. And they've taken measures that indirectly cost the cost and while -- may be debated what. That a large. See you have a 1% disadvantage if you're running the ball bank relative to one of the big bad weeks. You are and what they do is new limits on what the call will -- on the ball back from the -- -- to. -- -- so I'll. They have to take it retail deposits -- the -- from regional to. The so it's somewhat somebody. -- -- between my bank has put some money JPMorgan that we nor are being short to -- It would large consecrated do because I deterrent it's kept. But. It worked out and out of the local -- but the so that he being. Because the -- to -- go to JPMorgan borrowed money there it goes well partly that called also funding and so. And so are. You look at the money market accounts. What you get from politics. -- 1% 1%. -- larger banks charge. Okay and it at all because of federal policy. That. That's evidence so with that -- that department now that the critical as wonder she understands that. They I. Managed to EG -- Simon college campus -- an -- name your place. The seven deadly. Night folks if you want to copy that books and mean email Warren thanks for joining us appreciate your time at Warren. Most are joining us author of the book the seven deadly. Sins of economic policy if you wanna copy of that book email me my email address is Barry Armstrong at WR GO dot com Barry Armstrong at WRK dot com. -- email address is June night at wrko.com. Up next we're gonna be joined by frank -- yelled from the Boston Herald. TJ Max earnings announcement at 9:30 this morning at the lowdown for you and the current stock price on TJ Maxx next on the financial --