Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

Perhaps Elizabeth Warren's sickness over '<keyword id="1739404" type="ENTERTAINMENT" weightage="60" keywordseo="Too-Big-To-Fail">too big to fail</keyword>' (TBTF) is catching.
Today, <keyword id="45366" type="PERSON" weightage="60" keywordseo="Ben-Bernanke">Ben Bernanke</keyword> was testifying before the House Financial Services Committee. The hearing lacked some fireworks without retired Congressman Barney Frank, but his fellow Massachusetts Democrat Representative Michael Capuano did his part to make things interesting.
Following Senator Warren's lead from yesterday, Capuano questioned hard Bernanke about TBTF and the "subsidy" big <keyword id="6368751" type="PERSON" weightage="60" keywordseo="Banks">banks</keyword> get in the form of lower borrowing costs.
"I want to read your words as recorded...you say 'the subsidy is coming because of market expectations that the government will bail big banks out if they fail. Those expectations incorrect.'... So am I reading this correctly, at least through legislative purposes, TBTF is non-existent... not through the market, but through the law?"
Bernanke responded saying that we now have the orderly liquidation authority which would wipe out all the shareholders of the company being liquidated. He said that if a big bank failed tomorrow, we'd still have problems, but the Fed is working on that.
Capuano seemed a little happy with that response saying, "...I... agree with you that regardless of what the law says, some people in the marketplace, especially some of my friends on the other side of the aisle, like to believe that it's still in existence. And I accept that not as a legal point but as a fact of reality. Some people think that the moon is made of cheese, and that's fine, to them that's real. So for some people TBTF is still there though there's no scientific or legal proof that it is. I guess what I'm asking is what do you think we should do to address that misconception of the market..."
Bernanke said there were steps being taken to move in that direction and mentioned some provisions in Dodd-Frank, but Capuano kept on him. He eventually asked Bernanke to quantify the subsidy banks were getting from the belief in TBTF.
Lucky for our Fed Chairman, Capuano's time then ran out. 
Watch the video from <a href="http://video.cnbc.com/gallery/?video=3000150804#eyJ2aWQiOiIzMDAwMTUwODA0IiwiZW5jVmlkIjoiUm9FU2VzU1p6aHM4dUVodVUwTHR4dz09IiwidlRhYiI6InRyYW5zY3JpcHQiLCJ2UGFnZSI6MSwiZ05hdiI6WyLCoExhdGVzdCBWaWRlbyJdLCJnU2VjdCI6IkFMTCIsImdQYWdlIjoiMSIsInN5bSI6IiIsInNlYXJjaCI6IiJ9">CNBC</a>:

A Congressman Followed Elizabeth Warren's Lead And Pummeled Bernanke On Too Big To Fail Today

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="http://www.thedailyshow.com/full-episodes/wed-february-27-2013-r-j--cutler">The Daily Show</a></div>There's been some rumbling in Washington about <keyword id="1739404" type="ENTERTAINMENT" weightage="60" keywordseo="Too-Big-To-Fail">Too Big To Fail</keyword> (TBTF) lately, mostly stemming from <a href="http://www.businessinsider.com/elizabeth-warren-on-bank-subsidy-2013-2">Elizabeth Warren's </a>cross-examination of Ben Bernanke, and some new <a href="http://www.businessinsider.com/sherrod-brown-safe-banking-act-2013-3">anti-TBTF bipartisan</a> legislation presented on the floor of the Senate last week.
Consequently <a href="http://www.thedailyshow.com/full-episodes/wed-february-27-2013-r-j--cutler">"The Daily Show</a>" took a stab at the topic late last week in a segment on mergers and acquisitions.
The segment mostly crashed and burned.
It opens with a montage of clips from financial media about "Merger Mania" — the idea that Warren Buffett's Heinz deal, Michael Dell's announcement that he wants to take Dell private, Office Depot's merger with Office Max, the American Airlines merger with US Airways, and more, signal that the M&amp;A market is back.
Stewart points out that in the 1980s M&amp;A deals weren't always good for the economy.
"These mergers aren't good for the economy so why are these financial reporters...so excited about these mergers?" Stewart asked.
John Hodgeman dressed in 1980s style, Gordon Gekko getup, helps him out.
"Why would they put themselves in the position that by merging with other companies they become so big...too big... so big that they don't operate efficiently..." Stewart muses.
"Too big to fail," Hodgeman interrupts. "Too big to fail, it's like the rich man's YOLO."
It's a good line but it has nothing to do with some of the deals Stewart mentioned, our current M&amp;A market, or the connection between corporate America and <keyword id="42111" type="COMPANY" weightage="60" keywordseo="Wall-Street">Wall Street</keyword> banks.
The merger between American Airlines and US Airways has been discussed for a long time. Heinz was a value acquisition by two of the richest men on the planet — Jorge Lemann and Warren Buffett — who do deals regardless of the economic climate. Office Max and Office Depot are companies with the same struggling business model. Finally, Michael Dell has contemplated taking his company private for years.
These are separate deals that may not even signal the M&amp;A market is back. <a href="http://www.economist.com/news/finance-and-economics/21572807-buy-out-bosses-fear-bubble-may-be-forming-wont-stop-it-when-music-gets?zid=293&amp;ah=e50f636873b42369614615ba3c16df4a">That in itself is something up for debate.</a>
There are many reasons why these companies are merging — dismal business models, low interest rates, what have you — but TBTF isn't one of them.
Watch the clip below <a href="http://www.bing.com/videos/watch/video/wed-feb-27-2013/17wyjf5hu">(The Daily Show via Bing):</a>

Jon Stewart Misfires In 'Too Big To Fail' Segment

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">AP Photo/Alastair GrantA protester, dressed to look like the Barclays Bank logo, demonstrates outside the Barclays Bank annual general meeting for shareholders, in central London,Thursday, April 25, 2013.</div></div></div>"Too big to fail" became a household phrase during the financial crisis, when bailouts in 2008-09 provided a safety net for the crumbling global banking system.As a response to the crisis, the G20 countries set up the Financial Stability Board, a global watchdog for financial institutions. One of its responsibilities is to identify the banks that can't go bust without causing a domino effect.Because of that, the<a href="http://www.financialstabilityboard.org/wp-content/uploads/2015-update-of-list-of-global-systemically-important-banks-G-SIBs.pdf"> FSB has just published the names of the banks</a> that are officially TBTF, or in the language of the Financial Stability Board, they're "global systemically important banks" or GSIBs. The banks are split into four buckets, with each corresponding to higher loss absorbency requirements, based on how important to the global financial system the bank is. In short, the more important the bank, the more capital it will be required to hold. Here's the full list:<div class="KonaFilter image-container display-table"><div><div class="image">Financial Stability Board</div></div></div>There's only one change this year - Spanish lender BBVA is out, and the China Construction Bank is in, reflecting the way that the world economy is changing.Other than that, all the groups stay the same - bucket numbers 2, 3 and 4 are still precisely where they were. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/everyday-phrases-smart-people-say-incorrectly-statute-2015-10">Everyday phrases that even smart people say incorrectly</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="44Z3ZoeDrznjy0zyuh6chLpAhZsFsPBY" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

This is the official list of banks that are too big to fail

<div class="KonaFilter image-container float_right"><div class="image on-image"><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult_VPage&amp;VBID=2C0BXZ6WX4LJO&amp;SMLS=1&amp;RW=1441&amp;RH=855#/SearchResult_VPage&amp;VBID=2C0BXZ6WX4LJO&amp;SMLS=1&amp;RW=1441&amp;RH=855&amp;PN=1">Reuters/Finbarr O'Reilly</a></div></div>Yesterday, New York Federal Reserve Chair <keyword id="225934" type="PERSON" weightage="60" keywordseo="William-Dudley">William Dudley</keyword> <a href="http://www.newyorkfed.org/newsevents/speeches/2013/dud131107.html">gave an ominous speech</a> about the danger of 'Too Big To Fail' on <keyword id="42111" type="COMPANY" weightage="60" keywordseo="Wall-Street">Wall Street</keyword>, in part blaming the industry's very nature for its continuation.
The speech was long, but his points were simple - TBTF is alive, and while coming up with a doomsday plan and making banks hold more money is important, it's not enough. Regulators must find a way to change management incentives on Wall Street so that risk is mitigated far before a bank comes close to failing.
If that can be achieved, questions about the size of U.S. banks are less important (though worth discussing with appropriate respect for their complexity).
But how do you change management on Wall Street? Before that question can be answered, Dudley asks his listeners to accept an assertion that the industry has continuously denied.
The Fed Chair said that TBTF is, in part, due to a more sinister, root problem - one that exists deep below the surface of Wall Street firms where regulators can't go. It is a problem with Wall Street's culture.
<a href="http://www.newyorkfed.org/newsevents/speeches/2013/dud131107.html">From Dudley's speech:</a>
Some argue that what I have proposed-higher capital requirements and better incentives that reduce the probability of failure combined with a resolution regime that makes the prospect of failure fully credible-are insufficient. Perhaps, this is correct. After all, collectively these enhancements to our current regime may not solve another important problem evident within some large financial institutions-the apparent lack of respect for law, regulation and the public trust. There is evidence of deep-seated cultural and ethical failures at many large financial institutions. Whether this is due to size and complexity, bad incentives or some other issues is difficult to judge, but it is another critical problem that needs to be addressed. Tough enforcement and high penalties will certainly help focus management's attention on this issue. But I am also hopeful that ending too big to fail and shifting the emphasis to longer-term sustainability will encourage the needed cultural shift necessary to restore public trust in the industry.
Changing a culture is a difficult multi-generational process - best to start working on it now.

NY FED PRESIDENT: Some Big Banks Are Just Morally Bankrupt

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">REUTERS/Kevin LamarqueNeel Kashkari.</div></div></div>Neel Kashkari, the <a href="http://www.businessinsider.com/neel-kashkari-minneapolis-fed-president-2015-11">newly-appointed president of the Minneapolis Federal Reserve</a>, has come out swinging in his first speech as a Fed official. In a speech Tuesday delivered at the Brookings Institution, Kashkari called for breaking up the biggest banks in the US. "I believe we need to complete the important work that my colleagues are doing so that, at a minimum, we are as prepared as we can be to deal with an individual large bank failure," Kashkari said. Adding (emphasis ours):"But given the enormous costs that would be associated with another financial crisis and the lack of certainty about whether these new tools would be effective in dealing with one, I believe we must seriously consider bolder, transformational options. Some other Federal Reserve policymakers have noted the potential benefits to considering more transformational measures. I believe we must begin this work now and give serious consideration to a range of options, including the following:<ul><li>Breaking up large banks into smaller, less connected, less important entities.</li><li>Turning large banks into public utilities by forcing them to hold so much capital that they virtually can't fail (with regulation akin to that of a nuclear power plant).</li><li>Taxing leverage throughout the financial system to reduce systemic risks wherever they lie."</li></ul>Kashkari, it is worth noting, led President Obama's TARP program - or Troubled Asset Relief Program - in the wake of the financial crisis. And so Kashkari's previous government experience dealt directly with the fallout from the US government needing to step in to rescue large US banks, and it is clear this is something he worries about having to do again. "The Federal Reserve Bank of Minneapolis has been at the forefront of understanding the risks and challenges posed by large banks and moral hazard for a long time," Kashkari said. "Our work on these topics goes back to the 1970s, with specific work on [too big to fail] beginning in the 1990s. In fact, my colleague Ron Feldman and one of my predecessors, Gary Stern, both of whom are here today, authored the original book on this topic, Too Big to Fail, arguing in 2004 that policymakers would not stick to their no-bailout pledges. They were right."Building on this important work, and the work done since the crisis, the Federal Reserve Bank of Minneapolis is launching a major initiative to consider transformational options and develop an actionable plan to end TBTF."Quite an entrance. <a href="https://www.minneapolisfed.org/news-and-events/presidents-speeches/lessons-from-the-crisis-ending-too-big-to-fail">Read Kashkari's full speech here »</a> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/cam-newton-carolina-panthers-press-conference-nfl-denver-broncos-super-bowl-2016-2"> Here's the question that prompted Cam Newton to storm out of his postgame press conference</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="VoZG5yMDE6VHP_GWa6so3qlVcSAMa9_y" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Minneapolis Fed president Neel Kashkari thinks we need to break up big banks

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Thomson ReutersTraders work on the floor of the New York Stock Exchange (NYSE) in New York City</div></div></div>Via Dave Lutz at JonesTrading, here's a super quick guide to what traders are talking about right now:Good Morning! US Futures are mixed despite commodities higher and a few large deals early (RRC for MRD / PFE for ANAC). Overseas, very light trading as Austria, Denmark, Germany, Hungary, Luxembourg, Norway, Switzerland are closed for Holiday today. EuroStoxx is off 60bp and FTSE 40bp, but volumes are almost 50% light to recent averages. Pretty decent pullback of Bond Proxies, with Telecom and Staples getting hit for 1%+ across the continent, while a bounce in the miners help London offset broad weakness in the banking sector. Over in Asia, China shrugged off weaker April data to gain 80bp and Aussie climbed 60bp. While Nikkei gained 30bp, our desk in Kauai noted a bit of retail panic as the small cap Mothers index tanked 6.7% following weak earnings. The DXY is mixed, losing ground to Euro and commodity currencies liker the A$, but making some upside against Yen. In Japan, 10Y JGB yields hit -11bp as PPI collapsed to 6+Y lows - keeping Treasuries and Bunds just off Friday's peaks. Ore climbed 1.3%, but Rebar was slammed for 4% in China, continuing last week's record selloff - Silver has jumped 1.4%, dragging gold nearly 1% higher and back over $1280/oz. Oil prices have climbed to a 7-month high this morning - GS upgrades and Wildfires in Canada and militant activity in Nigeria have disrupted supply from two of the world's largest oil producers. Softs are mixed, with Sugar losing 1% as net longs jump to 3Y highs… Ahead of us today, we get the NAHB Housing Market Index at 10. At 1pm the EIA releases its monthly drilling productivity report. At 2pm we get weekly Trade dta from Brazil. At 4pm the US Treasury releases Net Long-term TIC Flows - and tonight Fed's Kashkari Holds a Town Hall on TBTF in Minneapolis at 7pm. Pretty quiet in Washington - at 9:30 the Supreme Court issues orders, including list of new cases; at 10am, court issues opinions; Major outstanding cases include cases on consumer lawsuits, Puerto Rican debt, affirmative action, Obamacare contraceptive coverage, abortion, Obama immigration plan. Homeland Security Sec kicks off U.S. Chamber of Commerce Infrastructure Week 2016 with a speech at 9:50. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/global-economy-biggest-threat-2016-4">FORMER GREEK FINANCE MINISTER: The single largest threat to the global economy</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="4wNWo1MzE6mCXkk1XHZUEjn1PYYwkNot" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Here's a super-quick guide to what traders are talking about right now

For all intents and purposes Wall Street has been pretty quiet about bipartisan legislation proposed by two Senators that would force banks to hold more cash than ever.
It's called the <a href="http://www.businessinsider.com/vitter-brown-too-big-to-fail-bill-2013-4">"Terminating Bailouts for Taxpayer Fairness" Act,</a> and <keyword id="335940" type="PERSON" weightage="60" keywordseo="David-Vitter">David Vitter</keyword> (R-LA) and <keyword id="174956" type="PERSON" weightage="60" keywordseo="Sherrod-Brown">Sherrod Brown</keyword> (D-OH) have been talking about bringing it to the floor for the last month or so. They presented a complete version of the bill last week.
Here in NYC there was little hair pulling in the media. Jamie Dimon didn't run around making speeches about the evils of regulation. The whole thing has been pretty quiet.
<a href="http://www.politico.com/morningmoney/">Politico's Ben White reports</a> that may be because Wall Street is quietly dispatching its army of lobbyists to take care of the problem for them. Check out this quote from industry vet Cam Fine, he's the president and CEO of the <a href="http://www.icba.org/">Independant Community Bankers of America.</a>
<a href="http://www.politico.com/morningmoney/">From Politico:</a>
“I have been in Washington leading ICBA for 10 years. I have experienced everything from the Wal-Mart bank charter fight, to the Fannie-Freddie accounting scandals, the Great Recession, bailouts, financial reform and Basel III. And I believe that Wall Street and the half dozen large trade groups that represent them in Washington have deployed more lobbyists on the TBTF issue than on any other issue since I came to D.C. … They must really be freaked out. There are more Wall Street lobbyists swarming Capitol Hill than there will be cicadas swarming the Washington metro area this summer — and, worse, the lobbyists make more noise than the cicadas.”
Washington is super muggy in the summer too. Gross.

Washington Insiders Are In Awe Of The Number Of Wall Street Lobbyists Descending On The City Right Now

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="http://www.brown.senate.gov/newsroom/multimedia/watch/a-bipartisan-effort-to-end-too-big-to-fail">YouTube</a>Sen <keyword id="174956" type="PERSON" weightage="60" keywordseo="Sherrod-Brown">Sherrod Brown</keyword> presenting on the floor of the <keyword id="6355284" type="ORGANIZATION" weightage="60" keywordseo="senate">Senate</keyword> last month</div> Senators Sherrod Brown (D-OH) and David (R-LA) have presented a bill that is going to keep Wall Street bankers up at night — the "Terminating Bailouts for Taxpayer Fairness" Act.
The acronym for that is TBTF — see what they did there?
The two Senators have been working together to figure out how to end <keyword id="1739404" type="ENTERTAINMENT" weightage="60" keywordseo="Too-Big-To-Fail">Too Big To Fail</keyword> for weeks now. Last month, <a href="http://www.businessinsider.com/sherrod-brown-safe-banking-act-2013-3">they both presented on this topic on the Senate floor,</a> and announced that they were working on legislation inspired by former FDIC Chairwoman Sheila Bear.
Now it's here.
So what's in it? To put it simply, loads of capital requirements. meaning that <keyword id="6368751" type="PERSON" weightage="60" keywordseo="Banks">banks</keyword> will have to hold more high-quality capital the bigger they get. The bill points out that "U.S. banks’ assets have grown from 20 percent of GDP to 100 percent of GDP, while their capital ratios declined from about 25 percent to around 5 percent of total assets."
That means raising cash by any means necessary — selling off assets, cutting staff (and Wall Street has seen a lot of that), etc.
Here's the break down of how much money everyone will need to raise and how:
<ul>
<li>Community, regional and mid-sized will have to keep $1 in equity for every $8-$10 in assets.</li>
<li>Wall Street's megabanks will have to keep $1 for every $15 in assets. </li>
<li>This cash has to be real shareholder equity too — no "goodwill" or anything intangible like that.</li>
<li>And these ratios will be based on a bank's total assets — none of this <a href="http://www.investopedia.com/terms/r/riskweightedassets.asp">"risk weighted"</a> calculation stuff that, the bill writes, has let big banks shrink assets on their balance sheets 46%-48%. Brown and Vitter want this to replace Basel 3 capital requirements, and they want it to be simple.</li>
<li>Subsidiaries and affiliates of banks will have to be separately capitalized.</li>
<li>And no special Fed treatment (read: subsidy) for non-depository banks:
"The Federal Reserve and other banking regulators will be prohibited from allowing non-depositories access to Federal Reserve discount window lending, deposit insurance, and other federal support programs. This will help reduce market expectations of financial assistance for megabanks."
</li>
</ul>
This couldn't have come at a worse time for Wall Street. Banks are having a hard enough time coming up with cash. <a href="http://finance.yahoo.com/news/heres-know-sad-state-wall-213700021.html">First quarter earnings season was pretty dismal as businesses that were once money makers went dry and legal fees continued to pile up.</a>
In a nutshell, The TBTF bill will make it harder for banks to reach international capital requirements, fight off lawsuits, maintain their staff compensation, pay out shareholder dividends and more.
As you can imagine, the Wall Street lobby machine is already jumping on this. Here's a statement from Hamilton Place Strategies' Tony Fratto. He's a former Treasury and White House official.
"This is a bank break up proposal and tying together the loose fringes of the parties doesn't make it 'bipartisan'. It's actually a bill neither party supports. We've come a long way since 2008. Whether because of regulation or market discipline, banks are better capitalized, more liquid, and much safer today. And that's good because our economy needs banks to perform today. Mandating new and punitive capital charges, and walking away from international agreements — all in the midst of the most extensive financial regulatory overhaul in history — is misguided. There may in the future be serious efforts to review Dodd-Frank reforms, but this isn't one."
Perhaps that's true, but there's another view to take here, and Wall Street analysts have been talking about it for some time now. The view is that Vitter and Brown are speeding up a process that the market has been undertaking anyway.
Last summer, when former Citi CEO Sandy Weill shocked the Street by saying that he regretted his push to end Glass-Steagall, everyone was talking about this topic.
That's when bank analyst Meredith Whitney said that banks were already "<a href="http://www.businessinsider.com/meredith-whitney-on-breaking-up-wall-street-banks-2012-7">overcapitalized and sluggish,</a>" and that the supermarket banking model Weill championed was destroying pricing in products like credit cards and home equity loans by emphasizing securitization and capital markets.
The latter are the businesses that Brown and Vitter are worried about, and on Wall Street (for the most part) those are the businesses that are suffering — think: sales and trading.
The unsexy businesses like credit cards and wealth management, on the other hand, have been carrying the Street.
<a href="http://www.businessinsider.com/meredith-whitney-on-breaking-up-wall-street-banks-2012-7">From Whitney:</a>
"You can make great money in a utility type of business by borrowing cheaply and lending sensibly but that's not what's being done. The basic bank model has, is, and will be attractive. It's just you're combining everything and undercutting pricing in one place and trying to make up for it, effectively having loss leading businesses... it's not a business that works...You're either making money or you're not. If you're not making money get out of the business."
If this bill passes, some people may very well take that advice.

Two Senators Just Introduced A Bill That Could Neuter Wall Street

<div class="KonaFilter image-container display-table float_right"><div><div class="image"></div></div></div>When people talk about politicians that aren't friendly to Wall Street, they always bring up Senator Elizabeth Warren (D-MA).
They rarely remember a man who's quietly proposed more bipartisan Wall Street regulation than Warren - Ohio Senator Sherrod Brown (D).
Now is the time to remember him though, because if the Democrats keep control of the Senate Brown could end up heading the powerful Senate Banking Committee according to Guggenheim Securities analyst Jaret Seiberg
"If Democrats keep the Senate, Sen. Sherrod Brown may be the next chairman," Seiberg wrote in a recent note. "This is the senator who wants the biggest banks to maintain a 15% equity to assets ratio. Despite this, he also would help the regional banks, small banks and insurers and could favor raising the SIFI [Systemically Important Financial Institutions] threshold to $100 billion or more."
That 15% ratio is part of a bill Brown proposed along with Senator David Vitter (R-LA). It's called the "Terminating Bailouts for Taxpayer Fairness" Act and is meant to end 'Too Big To Fail.'
TBTF- See what they did there?
The bill's very existence is a testament to Brown's ability to build coalition while avoiding negative attention. He's made it clear that he believes Wall Street banks "continue to jeopardize our financial system because of their size, their complexity, their interconnectedness." But despite that frank manner of speaking, and the fact that he's been in the Senate since 2006, his name doesn't illicit the same knee-jerk reaction on Wall Street as Warren's does.
"I'm just building the coalition here fairly quietly," Brown said in an <a href="http://www.businessinsider.com/sherrod-brown-wall-street-big-banks-2013-3#ixzz3CqkVfcnz">interview with Business Insider last year. </a>"It's not an issue that people rally around so much - breaking up the banks, limiting their liabilities, that's not something that excites people particularly. But I think it will. We're seeing intellectual and political support growing, and I think we'll continue to see that."
Brown has also been one of the main politicians driving the federal investigation into whether or not big Wall Street banks get a funding advantage from the government. The Government Accountability Office recently released a report on this matter at Brown and Vitter's request, and it found that the advantage was inconsistent, and sometimes quite small.
But that doesn't mean Brown and Vitter are done.
"Well first of all the megabank seems to be arguing there was never a subsidy, no subsidy. Now they're having to admit, yes, there was or is a subsidy, and they're arguing about the amount of it," Vitter said in an interview <a href="http://www.businessinsider.com/too-big-to-fail-is-still-a-problem-according-to-senators-2014-7#ixzz3CqoF6rgR">with Bloomberg TV back in July.</a> "The report says it may have gone down some with economic conditions and getting much better. The report also says if we go back to the same crisis conditions of 2008 the subsidy goes up. So I think clearly there is a too big to fail subsidy or cost of funding advantage. And I don't think it's been reduced significantly if you factor in the general economy."
Of course, for Wall Street there is a bright side. If Republicans take control of the Senate, Richard Shelby (R-AL) would take over Senate Banking. And while Shelby is a critic of Too Big To Fail, he's also a gotten more<a href="https://www.opensecrets.org/politicians/summary.php?cid=N00009920"> support (read: money) from the securities industry</a> over the last five years than any other industry.
Guggenheim also points out that if Brown were to take over the committee he might go easier on banks to show that he's not just an anti-Wall Street firebrand.
 Or he could just let it all hang out.

An Enemy Far More Threatening Than Elizabeth Warren Could Soon Have Major Power Over Wall Street

<keyword id="45366" type="PERSON" weightage="60" keywordseo="Ben-Bernanke">Ben Bernanke</keyword> testified before the <keyword id="6355284" type="ORGANIZATION" weightage="60" keywordseo="senate">Senate</keyword> Banking committee today, and for the most part, things proceeded as usual.
Until <keyword id="213453" type="PERSON" weightage="60" keywordseo="Elizabeth-Warren">Elizabeth Warren</keyword> took the mic.
Senator Warren grilled Bernanke on "<keyword id="1739404" type="ENTERTAINMENT" weightage="60" keywordseo="Too-Big-To-Fail">too big to fail</keyword>" and the subsidy economists have calculated big <keyword id="6368751" type="PERSON" weightage="60" keywordseo="Banks">banks</keyword> get from the American taxpayers through preferential borrowing costs.
Here's what she said <a href="http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-.html">(via Bloomberg):</a>
"Now we have a double problem which is the big banks ... have gotten bigger and at the same time ... investors believe with too big to fail out there, that it's safer to put your money into the big banks and not the big banks, effectively creating an insurance policy for the big banks .... Last week <keyword id="29740" type="CITY" weightage="60" keywordseo="Bloomberg">Bloomberg</keyword> did the math on it and came up with the number $83 billion, that the big banks get in what is essentially a free insurance policy... So I understand that we're all trying to get to the end of TBTF, but my question Mr. Chairman is, until we do, should those biggest financial institutions be paying the American tax payer that $83 billion subsidy they're getting."
Bernanke responded that those subsidies are coming from the market's expectation that the government will bail out banks, when in reality, the government has figured out a way to wind them down. He also added that the government wiped out the shareholders at AIG.
To which Warren countered, "excuse me Mr. Chairman, but you did not wipe out the shareholders at the big banks ... Whatever you say, Mr. Chairman, $83 billion says there will be a bailout for financial institutions."
Eventually she pushed Bernanke until he said, "I think we should get rid of it."
The Bloomberg calculation Warren was talking about was in an editorial from last week. Here's the bit you need to see.
<a href="http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-.html">From Bloomberg:</a>
Lately, economists have tried to pin down exactly how much the subsidy lowers big banks’ borrowing costs. In one relatively thorough <a href="http://www.imf.org/external/pubs/ft/wp/2012/wp12128.pdf" title="Open Web Site">effort</a>, two researchers -- Kenichi Ueda of the <a href="http://topics.bloomberg.com/international-monetary-fund/">International Monetary Fund</a> and Beatrice Weder di Mauro of the University of Mainz -- put the number at about 0.8 percentage point. The discount applies to all their liabilities, including bonds and customer deposits.
Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.
The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo &amp; Co. and Goldman Sachs Group Inc. - - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits...In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the <a href="http://topics.bloomberg.com/u.s.-economy/">U.S. economy</a> -- would just about break even in the absence of corporate welfare...
Very disconcerting. Obviously Warren isn't pleased. Watch her express that to Ben Bernanke in the video below <a href="http://www.bloomberg.com/news/2013-02-26/bernanke-says-u-s-must-end-too-big-to-fail-bank-subsidy.html">(via Bloomberg):</a>

Elizabeth Warren Grilled Ben Bernanke On The Subsidy For 'Too Big To Fail' Banks

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="http://en.wikipedia.org/wiki/File:Pi%C3%B1ata.jpg">Wikimedia Commons</a></div>Over the last week, Washington politicians on both sides of the aisle have started voicing their support for limiting the size of <keyword id="42111" type="COMPANY" weightage="60" keywordseo="Wall-Street">Wall Street</keyword> banks.
Yesterday, after Attorney General <keyword id="127300" type="PERSON" weightage="60" keywordseo="Eric-Holder">Eric Holder</keyword> testified that the <keyword id="99225" type="ORGANIZATION" weightage="60" keywordseo="Justice-Department">Justice Department</keyword> held off in prosecuting some banks because they were too big, the pile-on has gotten larger.
Holder was testifying in a <a href="http://www.c-span.org/Events/Atty-Gen-Holder-Faces-Senators-on-Judiciary-Cmte/10737438568/">Senate Judiciary Committee hearing</a> about HSBC. Last year, the bank paid a <a href="http://www.reuters.com/article/2012/12/11/us-hsbc-probe-idUSBRE8BA05M20121211">$1.9 billion fine</a> for laundering money for Mexican drug cartels, suspected Middle Eastern terrorists and more. Congress wanted to know why no executives were prosecuted criminally for those actions.
Holder said he wouldn't discuss HSBC's case specifically, but he admitted that size was a deterrent in prosecuting banks.
 <a href="http://www.ft.com/intl/cms/s/0/ecb0ced2-86b0-11e2-b907-00144feabdc0.html#axzz2MrRyCT7Z">From FT:</a>
“That is a function of the fact that some of these institutions have become too large,” Mr Holder said...
The size of large banks “has an inhibiting influence – impact on our ability to bring resolutions that I think would be more appropriate”, Mr Holder told lawmakers. “And I think that is something that we – you all – need to consider.”
In isolation, these comments are significant enough. Holder is probably the most senior Obama official who's ever come out and said that Wall Street's so big that its above the law.
On top of '<keyword id="1739404" type="ENTERTAINMENT" weightage="60" keywordseo="Too-Big-To-Fail">too big to fail</keyword>,' we now have 'too big to, jail.'
But what's more, Holder's comment is not in isolation. Over the last week Congressional banking hearings in the House and the Senate have been the stage of confrontations between witnesses and politicians demanding answers about 'too big to fail.'
First it was <keyword id="213453" type="PERSON" weightage="60" keywordseo="Elizabeth-Warren">Elizabeth Warren</keyword> confronting Ben Bernanke. She said that because investors believe in 'too big to fail', big banks have a free insurance policy. Because of that insurance policy, Wall Street banks are seen as safer bets, and that means more money for them.
"Last week Bloomberg did the math on it and came up with the number $83 billion that the big banks get in what is essentially a free insurance policy," Warren said to Bernanke. "So I understand that we're all trying to get to the end of TBTF, but my question Mr. Chairman is, until we do, should those biggest financial institutions be paying the American tax payer that $83 billion subsidy they're getting."
The next day, in the House of Representatives, <a href="http://www.businessinsider.com/capuano-asks-bernanke-too-big-to-fail-2013-2">Mike Capuano (D-MA) followed Warren's lead</a> and asked about 'too big to fail' when he got his shot at Bernanke as well.
A few days later a bipartisan duo of Senators joined Warren and Capuano's cause. Senators Sherrod Brown(D-OH) and David Vitter (R-LA) both <a href="http://www.businessinsider.com/sherrod-brown-safe-banking-act-2013-3">gave big presentations on the floor of the Senate about ending "too big to fail.</a>
From Brown's presentation <a href="http://www.brown.senate.gov/newsroom/press/release/brown-delivers-major-address-on-efforts-to-end-too-big-to-fail-policies">(the full text is on his website):</a>
Just about the only people who will not benefit from reining in these megabanks are a few Wall Street executives.
Congress needs to take action now to prevent future economic collapse and future taxpayer-funded bailouts.
I want to thank my colleague, Senator Vitter, who recognizes this problem and is joining me in doing something about it.
I am pleased to announce today that we are working on bipartisan legislation to address this “Too Big to Fail” problem.
It will incorporate ideas put forward by Tom Hoenig, Richard Fisher, and Sheila Bair.
Tea Party politicians have been outspoken about the size of Wall Street banks for a while, but Vitter is no Tea Partier. He's a mainstream Republican joining with Democrat on this issue.
And there's evidence that other rank and file conservatives could join him. When Marco Rubio went to visit with Blackstone's Steve Schwarzman, conservative thinkers from Peggy Noonan to James Pethokoukis said that the GOP should be moving away from Wall Street, not closer to it.
<a href="http://www.realclearpolitics.com/2013/03/03/what_rubio_should_have_told_wall_street_303175.html">From Noonan on what Rubio should have said to Schwarzman:</a>
"I'm going to steer this party away from Wall Street and toward what used to be called Main Street and doesn't have a name anymore. Our economy won't take off again until our pigsty of a tax code is cleaned up. People have to feel everyone's being treated fairly, that the rich aren't calling the shots and gaming the system. And all future growth could be stymied if you guys make a half-trillion-dollar wrong bet tomorrow because some trader in London was high as a kite on Ambien. That could bring down the system the way it crashed in '08. So we have to change the system. Too big to fail is too big to live.”
This morning, the Senate Banking Committee is meeting for a session called <a href="http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&amp;Hearing_id=66d5f8e5-2ea1-48e1-adb6-5b514960ba8d">“Patterns of Abuse: Assessing Bank Secrecy Act Compliance and Enforcement.”</a> You can bet that Holder's comment will come into play there.
Wall Street's ears should be burning.

All Of The Sudden, Bashing Wall Street Is Becoming A Hot Bipartisan Pastime In Washington

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Reuters</div></div></div>Stocks rallied and oil prices fell on Tuesday after the big news before the market open that Saudi Arabia, Russia, Qatar, and Venezuela agreed to freeze oil production was met with a lackluster market response. First, the scoreboard:<ul><li>Dow: 16,196.4, +222.6, (+1.4%)</li><li>S&amp;P 500: 1,895.6, +30.8, (+1.6%)</li><li>Nasdaq: 4,436, +98.4, (+2.3%)</li><li>WTI crude oil: $29.10, -1%</li></ul><h2>Production Freeze</h2>Saudi Arabia, Russia, Qatar, and Venezuela <a href="http://www.businessinsider.com/the-saudi-and-russian-oil-ministers-are-meeting-and-crude-oil-is-ripping-higher-2016-2">agreed to freeze oil production</a>. Not cut it, but at least keep it steady at near-record levels. The market was unimpressed. After oil prices had their <a href="http://www.businessinsider.com/february-12-crude-oil-rally-2016-2">14th-largest one-day rally ever on Friday</a> following <a href="http://www.businessinsider.com/opec-meeting-tweet-from-wsj-2016-2">headlines suggesting</a> coordination on a production cut could be coming, the market reaction Tuesday was muted. "Buy the rumor, sell the news," or so the old adage goes. But of course aside from the market reaction there are the practical implications of this move which, to many analysts, are sort of whatever. <a href="http://www.businessinsider.com/why-the-oil-production-freeze-might-not-be-a-game-changer-2016-2">Analysts at Barclays wrote that</a>, "these developments officialize what is already happening." Which is to say that Venezuela, Qatar, and Russia were already going to be hard-pressed to grow oil production this year and so announcing a freeze is sort of head-faking the market into thinking they are doing something. Julian Jessop at Capital Economics also noted that Iran is likely to increase oil production as sanctions against the country are lifted, which suggests that total global oil production could increase this year anyway. So really, nothing was accomplished?Turning to the US oil markets, <a href="http://www.businessinsider.com/the-end-of-shale-oil-2016-2">Ian Shepherdson at Pantheon Macro wrote</a> that it seems the end may be near for US shale production - which grew about 15% a year when oil prices were at their peak - but just declined from their year-ago levels earlier this month for the first time in four-and-a-half years. "We don't know how far U.S. shale production will now fall," Shepherdson wrote. "But with U.S. crude oil inventories standing at about 60 days of consumption, nearly 20% above their long-term average, the outlook is bleak."<h2>Break Up The Banks</h2>Neel Kashkari, the new president at the Minneapolis Federal Reserve, <a href="http://www.businessinsider.com/neel-kashkari-first-speech-at-minneapolis-fed-president-2016-2">wants to break up the big banks</a>. In a speech Tuesday at the Brookings Institution - Kashkari's first as Minneapolis Fed president - Kashkari said, "given the enormous costs that would be associated with another financial crisis and the lack of certainty about whether these new tools would be effective in dealing with one, I believe we must seriously consider bolder, transformational options.""Transformational options" include breaking the big banks up. Kashkari said banks should be broken into, "smaller, less connected, less important entities" and the largest banks ought to be turned into, "public utilities by forcing them to hold so much capital that they virtually can't fail."Of course, then they can't really succeed, right? Kashkari was in charge of the Treasurys TARP program in the wake of the financial crisis, and so he certainly got a very close look at the financial system and the stress this sector put on the entire US economy and its taxpayers. And it seems he is not loathe to repeat this experience. Kaskahri added (emphasis mine):Given the scale of job losses, home foreclosures, lost savings and costs to taxpayers, there is widespread agreement among elected leaders, regulators and Main Street that we must solve the problem of TBTF. We know markets make mistakes; that is unavoidable in an innovative economy. But these mistakes cannot be allowed to endanger the rest of the country. When roughly 1,000 savings and loans failed in the late 1980s, there was no risk of an economic collapse. When the technology bubble burst in 2000, it was very painful for Silicon Valley and for technology investors, but it did not represent a systemic risk to our economy. Large banks must similarly be able to make mistakes-even very big mistakes-without requiring taxpayer bailouts and without triggering widespread economic damage. That must be our goal.And by coming out this strongly on an issue that, frankly, isn't much discussed by current Fed officials, Kashkari continues the tradition of thought-provoking and conventional-wisdom-challenging commentary from the Minneapolis Fed. Narayana Kocherlakota, who had served as Minneapolis Fed president until the end of 2015, <a href="http://www.businessinsider.com/fed-dot-plot-negative-interest-rates-2015-9">was in favor of negative interest rates</a> in his final months in office and had been by far the most aggressive "dove" - or Fed official arguing for easier monetary policy - in his last couple years on the job. Elsewhere in central banking news, <a href="http://www.businessinsider.com/bernanke-on-feds-interest-rate-payments-to-banks-2016-2">former Fed chair Ben Bernanke explained</a> why the Fed paying interest on excess reserves isn't a "subsidy" to big US banks. Larry Summers - who was once considered for the top job at the Fed - <a href="http://www.businessinsider.com/summers-time-to-kill-the-100-bill-2016-2">came out against the $100 bill</a>. <h2>Who Knows: Stock Market Edition</h2>"Our portfolio advice has been pretty horrendous lately," <a href="http://www.businessinsider.com/adam-parker-says-market-like-bizarro-world-2016-2">writes Morgan Stanley's chief equity strategist Adam Parker</a>. "As my 90-year old Latin teacher used to tell the class in 1985, 'son, you are in left field, without a glove, with the sun in your eyes.'"Parker admitted his failures in a note to clients on Monday. "For those who follow our portfolio, we did quite well over the five years from 2011-2015," Parker added. "But, our portfolio just had its worst month in 61 months in January, and things have not improved in February. The market is down more than we thought it would be. Our biggest sector bet has been financials (particularly credit cards). As an investor recently said to us at a conference, 'I am doing a lot of things, just nothing with confidence.' Doing the opposite of what we recommended would have been better."This is refreshing!Parker has long been one of the most cerebral strategists on Wall Street, <a href="http://www.businessinsider.com/adam-parkers-market-forecast-guess-2016-1">writing earlier this year</a> that he had no idea where the market was headed and <a href="http://www.businessinsider.com/morgan-stanleys-adam-parker-market-outlook-2015-9">telling investors last September</a> that everything they thought was true is, in fact, worthless. Citi's Tobias Levkovich, meanwhile, <a href="http://www.businessinsider.com/investors-predictions-have-been-wrong-2016-2">found that everything investors thought would happen</a> this year went the other way. "In these contexts, it is not at all shocking to comprehend the level of consternation about portfolio positioning," Levkovich wrote.Which sort of all goes to the theme we've been hammering at here on BI: Markets. The markets are very much unsettled and the outlook is cloudy at best but let's admit it: things look bad. Markets are behaving in ways no-one thought they would and concerns about liquidity, about central bank policy, and the future of Western finance all have market participants anxious, to say the least. The actual economic data, particularly in the US, however, indicate that while things aren't great, they are not terrible. And the biggest question on everyone's mind - "Are we heading for recession?" - <a href="http://www.businessinsider.com/us-recession-odds-2016-2">looks very much like it will be answered with "No."</a> At least based on the received data so far. Or as Dan Loeb wrote in his <a href="http://www.businessinsider.com/dan-loeb-market-outlook-2016-2">fourth quarter letter to investors</a>: "This is a Wall Street recession." Horrendous portfolio advice and outcomes, then, is abundant. <h2>Buffett, Streamed</h2>This year, Warren Buffett's Berkshire Hathaway <a href="http://www.businessinsider.com/yahoo-finance-live-stream-berkshire-hathaway-annual-meeting-2016-2">annual meeting will be streamed on Yahoo</a>. And while I very much enjoyed my weekend in Omaha last year, investors around the world will now be able to watch Buffett's riveting seven-hour question-and-answer session with shareholders and journalists wherever they choose. (Disclosure: I own a few Berkshire B shares so that I can attend the annual meeting. And while I have no plans to sell them or buy more anytime soon, I guess that whole reason for owning this stock is sort of moot now.)We're reasonably confident that tens of thousands of Berkshire faithful will still flock to Omaha for the meeting, but once again, the internet makes amazing experiences possible for free. (I know, I know, there's the cost of an internet connection and a computer and so on but you get the point.)<h2>Recession Watch, 2016</h2>Over the weekend <a href="http://www.businessinsider.com/us-recession-odds-2016-2">Akin Oyedele wrote a great piece</a> on why it's getting harder and harder to say the US economy is heading for recession. And the basic view is that with consumer spending solid, consumer confidence holding up, and labor market gains continuing, the main driver of US GDP growth - consumer spending - appears to be far less in danger than financial market gyrations would otherwise imply. Which is fine: markets sometimes get nervous about things that need not take down the "real" economy. But in a note to clients on Monday, BNP Paribas made it pretty clear they're tired of being asked the question. "Clients often ask us the probability of another US recession," the firm wrote. "We generally answer '100%,' but fight giving a precise timing. The fear of recession is one reason the Fed has been so cautious in normalizing its interest rates. Paradoxically, the long wait may have actually increased the probability of another recession in the next few years."And look, we could get into the whole debate around whether the Fed is going to cause the next recession by raising interest rates when the economy can't handle higher rates - though as BNP noted this sort of rush to get rates higher seems to be brought on by the Fed's own aversion to raising rates over the last several years - but really, we're talking about metaphysics here. Which is not helpful. We'll never been this close to the year 1985 again and we've never been closer to the next recession and other assorted self-evident truths are merely idle exercises here. There will be another US recession. Asking about it will not make it so. <h2>Additionally</h2><a href="http://www.businessinsider.com/stocks-still-expensive-after-market-drop-2016-2">The stock market is still expensive</a>. <a href="http://www.businessinsider.com/millennials-marrying-later-could-mean-buying-bigger-diamonds-2016-2">Bank of America thinks</a> millennials waiting longer to get married means they will be richer and spend more on engagement rings. This is a complicated view.<a href="http://www.businessinsider.com/groupon-stock-up-40-on-alibaba-investment-news-2016-2">Groupon bought a big stake in Alibaba</a>. <a href="http://www.businessinsider.com/goldman-says-short-gold-2016-2">GOLDMAN: Short gold, man</a>. The UAE is kind of (but not really) <a href="http://www.businessinsider.com/uae-giving-basically-away-oil-to-india-2016-2">giving away oil</a>.Uber is <a href="http://www.businessinsider.com/uber-ceo-travis-kalanick-on-irrational-funding-2016-2">losing an insane amount of money</a> ($1 billion) in China each year. <a href="http://www.businessinsider.com/mark-zuckerberg-favorite-books-2016-2">Mark Zuckerberg's book recommendations</a>.<a href="http://www.ft.com/intl/cms/s/0/af9a76a4-d4ca-11e5-8887-98e7feb46f27.html">Apple bonds</a>. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/pluto-and-charon-moon-love-story-2016-2">Pluto and its moon Charon have something that doesn't exist anywhere else in the solar system</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="dpN2ZudzrH_ry0UkEnNf2WpZYP4qtqEk" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

STOCKS RALLY, OIL SINKS: Here's what you need to know

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="http://www.ustream.tv/federalreserve">Federal Reserve / USStream</a></div>The <keyword id="136502" type="ORGANIZATION" weightage="60" keywordseo="FOMC">FOMC</keyword> <a href="http://www.businessinsider.com/march-fomc-meeting-2013-3">just released the statement</a> from its March meeting.
To sum it up, <keyword id="6355253" type="ORGANIZATION" weightage="60" keywordseo="Federal-Reserve">Federal Reserve</keyword> bond buying is still full speed ahead at $85 billion per month, but the FOMC notes that fiscal policy has become somewhat more restrictive since the last meeting (i.e., sequester).
The FOMC also <a href="http://www.businessinsider.com/fomc-economic-forecasts-2013-3">updated its economic forecasts</a>. The Committee now thinks unemployment will fall faster than previously expected.
Below is a live blog of Bernanke's presser and Q&amp;A.
--------------------------------------------------
2:30 PM: Bernanke begins.
2:31 PM: Bernanke says the housing sector has seen further gains, payrolls are growing faster, and inflation is running below target, but unemployment, of course, remains elevated.
2:33 PM: Most on the FOMC see inflation eventually rising to target and agree that quantitative easing is supporting job creation.
2:35 PM: It bears emphasizing that the Committee views its actions in the context of monthly purchases, as opposed to total purchases.
2:37 PM: Asset purchases under quantitative easing are in order to increase near-term economic momentum.
2:38 PM: The employment situation has improved, but fiscal policy has become somewhat more restrictive.
2:39 PM: Q&amp;A begins.
2:39 PM: The lack of quantitative thresholds for QE is due to the fact that it is a complex issue. Not only does unconventional monetary policy affect the economy, but it's also important for financial market stability. The Fed may adjust the rate of purchases from month to month at some point in the future.
2:40 PM: We will be looking for sustained improvement across a range of labor market indicators in a way that is taking place throughout the economy. We are looking at the outlook for future conditions as opposed to current conditions, which will allow us to look past short-term shocks or programs.
2:41 PM: The problem with having a single criterion for adjusting asset purchases is that it's "all-or-nothing." That would be very difficult for the markets to understand and anticipate. As we make progress toward our ultimate objective of substantial approvement, we may adjust the pace of asset purchases. We won't do it every month, or frequently.
2:43 PM: "Substantial improvement" means broad based improvement in a range of indicators – a period in which the labor market is doing better and we perceive it to be stronger. If the outlook worsened, we could bring purchases back to the "previous level."
2:44 PM: At each meeting, we will look at progress that has been made since the last meeting, trying to determine if there's been enough change to shift our policy stance.
2:46 PM: It's a difficult situation in Cyprus. In a financial sense, it's bigger than it is in a GDP sense, as its banking system is so much larger than its economy. The vote failed, and markets are up today, so I don't think the impact has been enormous.
2:47 PM: We at the Fed don't have an estimate for what is too big to fail or the subsidy banks gain from being too big to fail. There is some evidence of market discrimination. I never meant to imply that the TBTF problem is solved and gone. It's still here. But we're working on making progress toward it, with Basel capital rules and Dodd-Frank regulation.
2:49 PM: I don't have a strong view on term limits for central bankers. The President always has the option of appointing or re-appointing Fed chairmen, and Congress can confirm or deny. So, term limits are redundant.
2:51 PM: I have a relative that is unemployed. I come from a small town in South Carolina that has taken a big hit from the recession. The home I was raised in had just been foreclosed upon when I visited there last. I think it's very important that we act to address unemployment, and I think that most would agree that the Fed has been fairly active in that regard.
2:53 PM: We have not been able to agree on what guidance we should give on asset purchases. As we go forward, we have to factor in the efficacy of those purchases, which is another issue. As we move forward in time, we'll be learning more about how effective the policy is, and the risks arising from it. I agree that it would be more effective if we could give numerical guidance.
2:55 PM: Capital is an important element in addressing too big to fail. One of the things that will be proposed is surcharges on the largest banks (they will have to hold more capital as a percentage of assets than smaller banks). That should equalize their cost of funding with other banks and make a failure safer, because the risk is more limited.
2:58 PM: The tightening of credit in mortgage markets – our sense is that it's gone too far. Some tightening is obviously needed. We are now seeing much higher credit quality requirements on potential borrowers. That does have some effect on monetary policy. One of the most powerful tools we have is bringing down mortgage rates – stimulating home buying and construction-related industries.
2:59 PM: The number of borrowers underwater on their mortgages goes down as house prices go up, and this is providing an improvement in credit quality for those people. I don't want to overstate it, but higher prices are bringing more people into the mortgage market.
3:00 PM: We are not targeting asset prices or measuring our success by the stock market. While the Dow may be hitting a high, it's in nominal terms and not real terms. I don't think it's all that surprising that the market would rise, given the increased optimism in the economy, and profits are high.
3:02 PM: CBO estimates that putting together the fiscal cliff, the sequester, and other cuts, fiscal restraint is cutting something like 1.5 percentage points off of economic growth. We take as given what the fiscal authorities are doing. The economy is weaker than it would be otherwise. Monetary policy cannot offset fiscal restraint of that magnitude. The final outcome in terms of jobs will be worse than without that fiscal restraint. However, long-term, it is important to put the country on a sustainable fiscal path (not necessarily in the short term).
3:05 PM: There's been some disconnect in the short run between unemployment rate changes and growth. We are just going to have to measure developments in the economy and see what happens. We're not necessarily projecting strong growth, but the unemployment rate outlook is considerably lower than per the previous forecasts.
3:06 PM: The reason for publishing the severely adverse scenario from the stress tests is because that is the ultimate test. If they can survive the severely adverse scenario, they can survive a less stressful adverse scenario. The severely adverse scenario is mostly a scaling up of the adverse scenario. We found generally that banks can sustain an increase in long-term interest rates. One reason is that it increases their franchise value – net interest margins will rise over time.
3:10 PM: The reason we define "price stability" as 2 percent inflation is because if you're at zero inflation, you're very close to a deflation scenario. We haven't contemplated changing that, but it's currently being debated in academic circles, and we'll see what comes out of that.
3:14 PM: I think the issue Cyprus faces is that there is a pretty big financial hole in the sense that there is a fiscal issue and a bank restructuring/recapitalization issue. They are looking for resources where they can find them. There is the issue of setting a precedent that could reduce confidence in banks in certain periods. It's a very tough issue, and finding the resources to solve the Cyprus problem – there's probably no easy way to do it.
3:16 PM: The reason for the spring slump we've been observing each year could be due to statistical issues with seasonality. However, that should have washed out by now. If we see another similar slump, there could be more fundamental basis for it.
3:18 PM: I don't think a bank run in Cyprus has direct implications for the U.S. economy unless depositors in other countries lose confidence. I'm not aware that there is any evidence that is the case at this point. I consider a deposit tax to be extremely unlikely in the U.S.
3:20 PM: Labor force participation has been declining on a trend-like basis in the U.S. for a while, mostly due to demographic factors – the aging of the population and the fact that female participation is starting to decrease a bit. There's a trend underlying this, and there are some people who have left the labor force because they've been discouraged and can't find work. As the economy strengthens, they could re-enter the labor force. I doubt in the near term that we will see an increase in labor force participation because of that underlying downward trend.
3:22 PM: Monetary policy is a very blunt instrument. If you are raising interest rates to pop an asset bubble, you may also at the same time be throwing the economy into a recession, which kind of defeats the purpose of monetary policy. If the economy is weak, it's difficult to contemplate raising interest rates a lot to counter something in the financial sphere.
3:25 PM: I've spoken to the president a bit, but I don't really have any information for you on my future at this juncture. I don't think I'm the only person in the world who can manage the exit." There is no single person who is essential to that. Regarding my personal plans, I will certainly let you know when I have something more concrete.
3:27 PM: Q&amp;A concludes.

You Searched For "tbtf" and got 13 results

A Congressman Followed Elizabeth Warren's Lead And Pummeled Bernanke On Too Big To Fail Today

Linette Lopez

Jon Stewart Misfires In 'Too Big To Fail' Segment

Linette Lopez

This is the official list of banks that are too big to fail

Mike Bird

NY FED PRESIDENT: Some Big Banks Are Just Morally Bankrupt

Linette Lopez

Minneapolis Fed president Neel Kashkari thinks we need to break up big banks

Myles Udland

Here's a super-quick guide to what traders are talking about right now

Akin Oyedele

Washington Insiders Are In Awe Of The Number Of Wall Street Lobbyists Descending On The City Right Now

Linette Lopez

Two Senators Just Introduced A Bill That Could Neuter Wall Street

Linette Lopez

An Enemy Far More Threatening Than Elizabeth Warren Could Soon Have Major Power Over Wall Street

Linette Lopez

Elizabeth Warren Grilled Ben Bernanke On The Subsidy For 'Too Big To Fail' Banks

Linette Lopez

All Of The Sudden, Bashing Wall Street Is Becoming A Hot Bipartisan Pastime In Washington

Linette Lopez

STOCKS RALLY, OIL SINKS: Here's what you need to know

Myles Udland

Ben Bernanke Takes Questions At Federal Reserve Press Conference

Matthew Boesler

Popular Keywords

Buying Guides