Ron Paul asks John McCain a question about the Working Group. I have a question tool

[markvee]

Tim Russert challenged John McCain on knowledge of the economy, drawing upon this quote from a Wall Street Journal article

Link to article: http://www.opinionjournal.com/editorial/feature.html?id=110007600

McCain: I'm going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated.

and presumably other quotes such as this one from a Baltimore Sun interview:

Link to article: http://weblogs.baltimoresun.com/news/politics/blog/2007/12/mccain_he_wants_people_to_tell.html

McCain: The issue of economics is something that I've really never understood as well as I should. I understand the basics, the fundamentals, the vision, all that kind of stuff, but I would like to have someone I'm close to that really is a good strong economist. As long as Alan Greenspan is around I would certainly use him for advice and counsel.

Here is a link to the debate clip with transcript below.

Debate clip: http://www.youtube.com/watch?v=aUnYTnhQzEs

Transcript:

RUSSERT: Sen. McCain, you have said repeatedly, “I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated.” Is it a problem for your campaign that the economy is now the most important issue, one that, by your own acknowledgement, you are not well versed on?

SEN. MCCAIN: Actually, I don't know where you got that quote from. I'm very well versed in economics.
I was there at there at the Reagan Revolution. I was there when we enacted the first, or just after we enacted the first tax cuts and the restraints on spending. I was chairman of the Commerce Committee in the United States Senate, which addresses virtually every major economic issue that affects the United States of America.
I'm very well versed on economics, and that's why I have the support of people like Jack Kemp, people like Phil Gramm, people like Warren Rudman, people like Doug Holtz-Eakin, people like Marty Feldstein. That's why I have a strong team around me that respect my views and my vision. And that's why The Wall Street Journal, in a survey of economists recently, that the majority of economists thought that I could handle the nation's economy best.
And I have been a consistent fighter to restrain spending and to cut taxes. And my credentials and my experience and my knowledge of these economic issues, I think, are extensive. And I would match them against anybody who's running.

I guess that McCain thinks that the Wall Street Journal misquoted him.

Later in the debate, Ron Paul asks McCain a question. Here is the clip and transcript below.

Debate clip: http://www.youtube.com/watch?v=rJ1OB2iLxcY

Transcript:

REP. PAUL: My -- my question is for Senator McCain.
This is an economic question that I wanted to ask. It has to do with the President's Working Group on Financial Markets.
I'd like to know what your opinion is of this and whether you would keep it in place, what their role would be, or you would get rid of this group. And if you kept the group, would you make sure we would see some sunlight and know what they're doing and how they're being involved in our markets?

SEN. MCCAIN: Well, obviously we'd like to see more sunshine.
But I as president, as every other president, rely primarily on my secretary of the Treasury, on my Council of Economic Advisers, on the head of that. I would rely on the circle that I have developed over many years of people like Jack Kemp, Phil Gramm, Warren Rudman, Pete Peterson and the Concord group. I have a process of leadership, Ron, that is sort of an inclusive one that I have developed, a circle of acquaintances and people that are supporters and friends of mine who I have worked with for many, many years.

REP. PAUL: So you'd get rid of the group?

SEN. MCCAIN: You remember back in 1982 when Phil Gramm -- Phil Gramm and Warren Rudman and Gramm-Latta and all of those people got the first real tax cuts done, the real -- first real restraints in taxes. I was there. You were there. And I rely on those people to a much larger degree than any, quote, "formal" organization, although the secretary of Treasury is obviously one of the key and important posts that I would have.

McCain looked confused in the clip. I don’t think that he answered the question but rather admitted that he would be a puppet and listed some of his puppet masters, including the secretary of the Treasury who is the chair of the Working Group on Financial Markets.

Here is the wikpedia entry on the Working Group.
From: http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

The Working Group on Financial Markets (also, President's Working Group on Financial Markets or the Working Group) was created by Executive Order 12631, signed on March 18, 1988 by United States President Ronald Reagan.
The Group was established explicitly in response to events in the financial markets surrounding October 19, 1987 ("Black Monday") to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence".

As established by Executive Order 12631, the Working Group consists of:
• The Secretary of the Treasury, or his designee (as Chairman of the Working Group);
• The Chairman of the Board of Governors of the Federal Reserve System, or his designee;
• The Chairman of the Securities and Exchange Commission, or his designee; and
• The Chairman of the Commodity Futures Trading Commission, or her designee.

"Plunge Protection Team"
One theory regarding the Working Group refers to it as the Plunge Protection Team. This theory claims that the Working Group is a scheme to manipulate U.S. stock markets in the event of a market crash by using government funds to buy stocks, or other instruments such as stock index futures.
The term "Plunge Protection Team" was originally the headline for an article in The Washington Post by staff writer Brett D. Fromson, published on Sunday, February 23, 1997. He did not invent the term. It was added later by a copy desk editor as a sensational nickname for the Working Group.

I tried to find the minutes of this group but rather came across this article by John Crudele of the New York Post.

Link to article: http://www.nypost.com/seven/1129200...rys_missing_minutes_mystery_378734.htm?page=0

Crudele: In essence, the Treasury's Freedom of Information officials said that the Working Group - affectionately nicknamed the Plunge Protection Team - doesn't keep records of its meetings.

I think the lack of minutes may be lack of sunlight to which Ron Paul referred.

My question is:
Can anyone describe an action taken by the Working Group or taken on the advice of the Working Group?

Details of this action with links would be appreciated.

Thanks in advance.

 

[TQM]

you're

welcome.

http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm

They developed the "Red Book" to help out in emergency situations for the SEC. Sounds really scary to me.

 

[TQM]

more found here

http://www.gata.org/node/4458

Imagine - the Working Group wants to keep America competitive.

 

[markvee]

welcome.

http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm

They developed the "Red Book" to help out in emergency situations for the SEC. Sounds really scary to me.

From your link: http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm

In the event of a financial crisis, each federal agency with a seat at the table of the Working Group has a confidential plan. At the SEC, for example, the plan is called the "red book" because of the color of its cover. It is officially known as the Executive Directory for Market Contingencies. The major U.S. stock markets have copies of the commission's plan as well as the CFTC's.

Going to Plan A

The red book is intended to make sure that no matter what the time of day, SEC officials can reach their opposite numbers at other agencies of the U.S. government, with foreign governments, at the various stock, bond and commodity futures and options exchanges, as well as executives of the many payment and settlement systems underlying the financial markets.

"We all have everybody's home and weekend numbers," said a former Working Group staff member.


Thank you for providing a link that describes the Red Book. Do you have a link to a site where I can read the Red Book, or does the confidentiality of the plan preclude the public from reading it?

 

[markvee]

http://www.gata.org/node/4458

Imagine - the Working Group wants to keep America competitive.

From your link: http://www.gata.org/node/4458

With just two years to make his mark, new Treasury Secretary Henry Paulson is focusing much of his attention on making American financial markets more competitive.
So far, his efforts have mainly involved meeting and jawboning.

I am looking for details on an action taken with respect to financial markets not for a description of meeting and jawboning.

 

[TQM]

Hank Paulson

has a long history of activism and service to his nation. It's ridiculous to suggest he's "jawboning."

http://en.wikipedia.org/wiki/Henry_Paulson

Now I'm going to stop doing your research for you. I suggest your time would be better spent educating yourself than these fishing expeditions.

You hope to find some hidden cabal of evilmongers surrounding the President, who are unelected and control the world. The idea of it attracts you so much that you can't let go of it. You're sure it must be true, whether it is this group or that, you know if you fish long enough, you'll get your moment of glory.

Really, it's sad.

 

[markvee]

Hank Paulson has a long history of activism and service to his nation. It's ridiculous to suggest he's "jawboning."

The word "jawboning" was used in the article that you cited in your previous post, here:

http://www.gata.org/node/4458

Why did you cite the article if you think that the use of the word "jawboning" in the article was ridiculous?

I'm assuminng "jawboning" means talking, without minutes being recorded (according to the NY Post article), and not acting.

The wiki link to Hank Paulson's biography does not describe actions by the Working Group.

I am still interested if anyone can describe an action taken by the Working Group on Financial Markets.

 

[TQM]

look, you're an idiot.

The article didn't suggest that that's all he or they are doing. You did.

I've linked you to two articles now as to actions taken, mostly dealing with preparedness in case of emergencies, which, shouldn't surprise you, fool, because that's their mandate.

 

[markvee]

The article didn't suggest that that's all he or they are doing. You did.

Here is the entire article. I have bolded “jawboning” and a few parts that refer to the Working Group.

It is difficult to tell from the article whether the Working Group is working on changes to the Sabanes-Oxley law. There is also mention of studying risk of hedge funds or derivatives.

Has the Working group produced a report on with the Sabanes-Oxley law or the the risk study since this article was written in 23-Oct-2006?

TQM, if you decide to answer this question, please provide a link that includes the full text of an actual Working Group document and not more newspaper articles and wiki references. Thank you.

Here is the article:

Paulson Pulls for U.S. Markets
Treasury Chief Aims to Tweak
Rules Some Say Are Crippling
The Nation's Competitiveness
By Deborah Solomon
The Wall Street Journal
Monday, October 23, 2006

WASHINGTON -- With just two years to make his mark, new Treasury Secretary Henry Paulson is focusing much of his attention on making American financial markets more competitive.

So far, his efforts have mainly involved meeting and jawboning. He is well-positioned to help tweak some rules, but his power could wane next year if Democrats make significant gains in the November elections.

Since taking the reins in July, the Wall Street veteran has reinvigorated the President's Working Group on Financial Markets, which had languished. He also has backed a private-sector effort to recommend changes to laws and rules that critics say handicap U.S. financial markets. And he raised business hopes that the government will ease a controversial rule created by the Sarbanes-Oxley law in response to corporate scandals.

Mr. Paulson is chairman of the Working Group, which coordinates government policy on financial markets and includes the heads of the Federal Reserve, Securities and Exchange Commission, and Commodity Futures Trading Commission. Mr. Paulson has insisted that they meet about every six weeks. Before his arrival, the group met every few months and sometimes as infrequently as once a quarter.

"The issues that are natural for the President's Working Group to deal with are issues that he has thought a lot about while he was on Wall Street and to which he clearly has wanted to devote a lot of attention while he's here in Washington," said Randal Quarles, who recently stepped down as Treasury undersecretary for domestic finance.

The Working Group is a significant lever to influence policies outside the Treasury's bailiwick. The committee is "where he can have influence over the process and can shape the debate," said Rob Nichols, president of the Financial Services Forum, a group of chief executives from that industry that met with Mr. Paulson and President Bush last week. Mr. Nichols, a former Treasury spokesman, said Mr. Paulson talked about "what we can do to keep the U.S. economy competitive and keep the capital markets competitive."

Mr. Paulson's efforts are a response to a growing business concern that the regulatory and legal environment puts U.S. capital markets at a global disadvantage. Mr. Paulson often points out that more initial public offerings of stock are being issued on exchanges outside the U.S. Business leaders complain that the costs of doing business in the U.S. are increased by provisions of Sarbanes-Oxley, class-action lawsuits and a state and federal law-enforcement crackdown on corporate misbehavior.

The U.S. Chamber of Commerce on Friday held a public forum in Washington to publicize such issues. "If our capital markets become less competitive, the cost of capital rises, [stock] listings, and investment opportunities go overseas," said David Chavern, the chamber's chief of staff.

Mr. Paulson is having the Working Group look at the systemic risk posed by hedge funds and derivatives, and the government's ability to respond to a financial crisis, officials said.

He has ordered his chief of staff, Jim Wilkinson, to oversee the creation of a Treasury command center to track markets world-wide and serve as an operations base in a crisis. The center would revive a market-monitoring room closed in a 2003 budget cut. Mr. Wilkinson has relevant experience: A former spokesman for the U.S. in Iraq, he was a White House aide during the Sept. 11, 2001, terrorist attacks.

Mr. Paulson, a former chief executive of Goldman Sachs who declined to comment for this article, has said the regulatory pendulum "may have swung too far" in response to corporate scandals. He is expected to sound the capital-markets-competitiveness theme in future speeches. He also has emphasized restraining the growth of federal spending, but that will require congressional cooperation, a particular challenge if Democrats take control of one or both houses of Congress.

The secretary doesn't need much congressional cooperation on other priorities, including persuading China to keep moving toward market capitalism and shoring up the competitiveness of U.S. capital markets through rule changes.

Much depends on his persuasiveness. The Treasury's jurisdiction is limited. The controversial Sarbanes-Oxley rule -- which requires that companies assess their internal controls to ensure their financial reporting is accurate and reliable -- was crafted by the SEC and the Public Company Accounting Oversight Board. Both plan revisions before the end of the year.

Mr. Paulson, aware of the ticking clock on the Bush presidency, wants to move quickly. He told the organizers of the private Committee on Capital Markets that he wanted recommendations by next month.
"He explained what the political cycle was and that Treasury would be thinking about this issue come the new Congress in January, and if we were going to have an impact on that process, we would want to get this out by end of November," said Hal Scott, a Harvard Law School professor who heads up the panel.

The committee includes business leaders and academics but not consumer or shareholder-rights activists. It will draft a report looking at legal-liability issues, the Sarbanes-Oxley rule, shareholding rights and the regulatory process, including whether the SEC should weigh costs and benefits more explicitly before adopting rules. Mr. Paulson didn't help create the group, but he called it "important to the future of the American economy and a priority for me."

Gary Gensler, an assistant secretary for financial markets in the Clinton Treasury, said Mr. Paulson should be careful how he wields his power.
"I think that we have very competitive markets and have had for a very long time," Mr. Gensler said. "That's not to say it's not worth looking, but I think the hallmark of the U.S. markets is efficiency tied with a set of clear rules. ... There's always pressure that comes from groups to roll something back. What would be a mistake, though, is to think we need some wholesale changes."

 

[markvee]

I've linked you to two articles now as to actions taken, mostly dealing with preparedness in case of emergencies, which, shouldn't surprise you, fool, because that's their mandate.

The other article is below. Again, I’ve highlighted what I think is the most significant part, namely the creation of the Red Book. The details of Oct. 29, 1929 and Oct. 19, 1987 refer to events preceding the creation of the Working Group.

Here is the text of the second article:

Plunge Protection Team
By Brett D. Fromson
Washington Post Staff Writer
Sunday, February 23, 1997; Page H01
The Washington Post

It is 2 o'clock on a hypothetical Monday afternoon, and the Dow Jones industrial average has plummeted 664 points, on top of a 847-point slide the previous week.

The chairman of the New York Stock Exchange has called the White House chief of staff and asked permission to close the world's most important stock market. By law, only the president can authorize a shutdown of U.S. financial markets.

In the Oval Office, the president confers with the members of his Working Group on Financial Markets -- the secretary of the treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The officials conclude that a presidential order to close the NYSE would only add to the market's panic, so they decide to ride out the storm. The Working Group struggles to keep financial markets open so that trading can continue. By the closing bell, a modest rally is underway.

This is one of the nightmare scenarios that Washington's top financial policymakers have reviewed since Oct. 19, 1987, when the Dow Jones industrial average dropped 508 points, or 22.6 percent, in the biggest one-day loss in history. Like defense planners in the Cold War period, central bankers and financial regulators have been thinking carefully about how they would respond to the unthinkable.

An outline of the government's plans emerges in interviews with more than a dozen current and former officials who have participated in meetings of the Working Group. The group, established after the 1987 stock drop, is the government's high-level forum for discussion of financial policy.

Just last Tuesday afternoon, for example, Working Group officials gathered in a conference room at the Treasury Building. They discussed, among other topics, the risks of a stock market decline in the wake of the Dow's sudden surge past 7000, according to sources familiar with the meeting. The officials pondered whether prices in the stock market reflect a greater appetite for risk-taking by investors. Some expressed concern that the higher the stock market goes, the closer it could be to a correction, according to the sources.

These quiet meetings of the Working Group are the financial world's equivalent of the war room. The officials gather regularly to discuss options and review crisis scenarios because they know that the government's reaction to a crumbling stock market would have a critical impact on investor confidence around the world.

"The government has a real role to play to make a 1987-style sudden market break less likely. That is an issue we all spent a lot of time thinking about and planning for," said a former government official who attended Working Group meetings. "You go through lots of fire drills and scenarios. You make sure you have thought ahead of time of what kind of information you will need and what you have the legal authority to do."

In the event of a financial crisis, each federal agency with a seat at the table of the Working Group has a confidential plan. At the SEC, for example, the plan is called the "red book" because of the color of its cover. It is officially known as the Executive Directory for Market Contingencies. The major U.S. stock markets have copies of the commission's plan as well as the CFTC's.

Going to Plan A

The red book is intended to make sure that no matter what the time of day, SEC officials can reach their opposite numbers at other agencies of the U.S. government, with foreign governments, at the various stock, bond and commodity futures and options exchanges, as well as executives of the many payment and settlement systems underlying the financial markets.
"We all have everybody's home and weekend numbers," said a former Working Group staff member.

The Working Group's main goal, officials say, would be to keep the markets operating in the event of a sudden, stomach-churning plunge in stock prices -- and to prevent a panicky run on banks, brokerage firms and mutual funds. Officials worry that if investors all tried to head for the exit at the same time, there wouldn't be enough room -- or in financial terms, liquidity -- for them all to get through. In that event, the smoothly running global financial machine would begin to lock up.

This sort of liquidity crisis could imperil even healthy financial institutions that are temporarily short of cash or tradable assets such as U.S. Treasury securities. And worries about the financial strength of a major trader could cascade and cause other players to stop making payments to one another, in which case the system would seize up like an engine without oil. Even a temporary loss of liquidity would intensify financial pressure on already stressed institutions. In the 1987 crash, government officials worked feverishly -- and, ultimately, successfully -- to avoid precisely that bleak scenario.

Officials say they are confident that the conditions that led to the slide a decade ago are not present today. They cite low interest rates and a healthy economy as key differences between now and 1987. Officials also point to SEC-approved "circuit breakers" that were introduced after 1987 to give investors timeouts to calm down.

Under the SEC's rules, a drop of 350 points in the Dow would bring a 30-minute halt in NYSE trading. If the Dow declined another 200 points, trading would cease for one hour. No additional circuit breakers would operate that day, but a new set would apply the next trading day.

Despite these precautions, today's high stock market worries officials such as Fed Chairman Alan Greenspan, who in a speech in early December raised questions about "irrational exuberance" in the markets. Because the market declined following Greenspan's speech, government officials have become even more reluctant to comment on these issues for fear of triggering the very event they wish to forestall, according to policymakers.

A Brewing Concern

Greenspan had expressed similar thoughts a year ago at a confidential meeting of the Working Group. Treasury Secretary Robert E. Rubin and SEC Chairman Arthur Levitt Jr. also are concerned about the stock market's vulnerability, according to sources familiar with their views.

The four principals of the group -- Rubin, Greenspan, Levitt and CFTC Chairwoman Brooksley Born -- meet every few months, and senior staff get together more often to work on specific agenda items.

In addition to the permanent members, the head of the President's National Economic Council, the chairman of his Council of Economic Advisers, the comptroller of the currency and the president of the New York Federal Reserve Bank frequently attend Working Group sessions.

The Working Group has studied a variety of possible threats to the financial system that could ensue if stock prices go into free fall. They include: a panicky flight by mutual fund shareholders; chaos in the global payment, settlement and clearance systems; and a breakdown in international coordination among central banks, finance ministries and securities regulators, the sources said.

As chairman of the Working Group, Rubin would have overall responsibility for the U.S. response, but Greenspan probably would be the government's most important player.

"In a crisis, a lot of deference is paid to the Fed," a former member of the Working Group said. "They are the only ones with any money."

"The first and most important question for the central bank is always, 'Do you have credit problems?' " said E. Gerald Corrigan, former president of the New York Federal Reserve Bank and now an executive at Goldman Sachs & Co. "The minute some bank or investment firm says, 'Hey, maybe I'm not going to get paid -- maybe I ought to wait before I transfer these securities or make that payment,' then things get tricky. The central bank has to sense that before it happens and take steps to prevent it."

 

[markvee]

(continued)

1987: A Case Study

The Fed's reaction to the 1987 market slide, which Corrigan helped oversee, is a case study in how to do it right. The Fed kept the markets going by flooding the banking system with reserves and stating publicly that it was ready to extend loans to important financial institutions, if needed.
The Fed's actions in October 1987 read like a financial war story.

The morning after the 508-point drop on Black Monday, the market began another sickening slide. Corrigan and other Fed officials strongly discouraged New York Stock Exchange Chairman John Phelan from requesting government permission to close the market. Phelan was concerned that if the market continued to erode, the capital of the NYSE member firms would disappear. Corrigan feared a shutdown would cause more panic.

"It was extraordinarily difficult around 11 o'clock," Corrigan recalled. "The market was at one point down another 250 points, and that's when the debate with Phelan took place."

Simultaneously, Corrigan and other central bank officials spoke privately with the big banks and urged them not to call loans they had made to Wall Street houses, which were collateralized by securities that could no longer be traded and whose value was in question.

A final critical moment came that day when the Fed decided not to shut down a subsidiary of the Continental Illinois Bank that was the largest lender to the commodity futures and options trading houses in Chicago. The subsidiary had run out of capital to provide financing to that market.
"Closing it would have drained all the liquidity out of the futures and options markets," said one former top Fed official involved in the decision. Investors use stock futures and options to hedge positions in the underlying stock market.

Recognizing the crucial role of banks if another financial crisis should strike, the Office of the Comptroller recently conducted an internal study of what damage a market decline would inflict on U.S. banks. The OCC declined to discuss the study or its conclusions.

At the SEC, one big worry is how to cope with an international financial crisis that begins abroad but quickly rolls into U.S. markets.

"We worry about a U.S. brokerage firm that is dealing with a Japanese insurance company, where we don't know how they are run or regulated," a SEC source said. To improve its ability to react in a crisis, the SEC and the Fed have begun joint inspections with their British counterparts of U.S. and British financial institutions with global reach.

The most drastic -- and probably unlikely -- move the SEC could take in a crisis would be to propose a market shutdown to the president. That would require a majority vote of the commission. If a quorum couldn't be mustered, the chairman could designate himself "duty officer" and go to the president or his staff.

"Closing the market is, of course, the last thing the commission wants to do," said a source familiar with the SEC's planning. "During a time when people are extremely worried about their investments, you are cutting them off from taking any action. . . . The philosophy of the commission is that markets should stay open."

Just the Facts

Gathering accurate information would be the first order of business for federal regulators.

"Intelligence gathering is critical," Corrigan said. "It depends on the willingness of major market participants to volunteer problems when they see them and to respond honestly to central bank questions."

The SEC, CFTC and Treasury have market surveillance units. They monitor not only the overall markets, but also the cash positions of all the major stock and commodity brokerages and large traders.

The regulators also are hooked into the "hoot-and-holler" system used to notify participants in all financial markets of trading halts. The hoot-and-holler system alerts traders and regulators when a halt is coming.

Relying on Quick Action

In the event of a sharp market decline, the SEC and CFTC would be in constant contact with brokerage and commodity firms to spot early signs of financial failure. If they concluded that a firm was going down, they would try to move customer positions from that firm to solvent institutions.

At least this team of crisis managers already has been through the Wall Street wars. Greenspan was Fed chairman in October 1987. Rubin has served as the co-head of investment bank Goldman Sachs & Co. Levitt has been both a Wall Street executive and president of the American Stock Exchange.

"I think the government is in good shape to handle a crisis," said Scott Pardee, senior adviser to Yamaichi International (America) Inc., a Japanese brokerage subsidiary, and former senior vice president at the New York Fed. "A lot depends on personal relationships. You have a number of seasoned people who have gone through a number of crises. So if something happens, things can be handled quickly on the phone without having to introduce people to each other."

Consider what happened at 11:30 p.m. Dec. 5, when Greenspan made his comments about irrational exuberance. Alton Harvey, head of the SEC's Market Watch unit, was called at home by officials of Globex, a futures trading system owned by the Chicago Mercantile Exchange. U.S. stock futures trading in Asia had fallen to their 12-point limit, they said.

Harvey immediately alerted his direct superior as well as his opposite number at the CFTC. More senior SEC and CFTC officials were informed as well. But there wasn't much to be done until the morning. So Harvey went back to sleep.

REACTING TO A PLUNGE

After the market crashed on Oct. 29, 1929:
* The Federal Reserve provided loans and credit to financial systems.
* President Hoover met with business, labor and farm organizations to encourage capital spending and discourage layoffs; he also promised higher tariffs.
* Federal income taxes were reduced by 1 percent by the end of the year.
After the market dropped 22.6 percent on Oct. 19, 1987, the Federal Reserve:
* Encouraged the New York Stock Exchange to stay open.
* Encouraged big commercial banks not to pull loans to major Wall Street houses.
* Kept open a subsidiary of Continental Illinois Bank that was the largest lender to the commodity trading houses in Chicago.
* Flooded the banking system with money to meet financial obligations.
* Announced it was ready to extend loans to important financial institutions.
What would happen today during a stock drop would depend on the particulars. Here are current guidelines:
* If the Dow Jones industrial average falls 350 points within a trading day, NYSE trading would be halted for 30 minutes.
* If the DJIA falls another 200 points that day, trading would stop for one hour.
* If the market declines more than 550 points in a day, no further restrictions would be applied.
SOURCE: The New York Stock Exchange, "The Crash and the Aftermath" by Barrie A. Wigmore

 

[TQM]

The development of a red book,

sounds wise, no?

 

[markvee]

I don’t have all the details of the Red Book.

I don’t have a problem with a world phone book of individuals involved in financial markets provided that participation in the phone book is voluntary by the individuals.

The Red Book is supposed to contain home and weekend numbers, so people should be able to refuse participation for the sake of their own privacy.

I think that individuals should guard their privacy and that government should be transparent.

I don’t know whether or not participation in the Red Book is voluntary, and I have linked a newspaper report of a lack of minutes being recorded for meetings of the Working Group.

 

[fuji]

McCain gave the right answer in the first two quotes.

The notion that the president is supposed to be an expert on every aspect of how the nation is run is ridiculous. If you could find such a person they would be such a nerd that you wouldn't want them to be president.

A good president is three things:

1) Good at judging who to listen to
2) Someone who can cut to the chase and make a decision
3) A good communicator

A technocrat president who tries to run everything himself, know everything himself, is bound to make some catastrophic mistakes, miss the big picture, and fail to explain to people what he or she is doing.

 

[markvee]

First and foremost, I think that a president should know and uphold the Constitution.

Secondly, the president should understand the government’s role in the monetary system.

McCain recently professed to be well versed in economics, in contrast to previous quotes reported in the newspapers.

Ron Paul asked McCain about the Working Group, which potentially impacts the economy, created by Executive Order of the president.

From McCain’s answer, I’m not sure that he was aware of the existence of this group, much less that the Secretary of the Treasury is the chair of this group.

I think that McCain’s lack of knowledge will make him susceptible to manipulation. I don’t know whether this manipulation will be in the direction of my own opinions or not.

Ron Paul opinions on the Working Group, the Fed, etc are clear. If these opinions do not sit well with your own opinions then you may choose not to vote for him, but at least you know what you are getting.

I think that Ron Paul criticizes the Working Group for a lack of transparency and that Ron Paul would ultimately eliminate the Working Group based on his support of free markets and his distain for central planning. I asked for input on the actions of the Working Group to test Ron Paul’s opinion because I could not find much information on Working Group activities from an Internet search.

Ron Paul on the Working Group and the Fed: http://www.youtube.com/watch?v=A4kxTkhwR_Q&feature=related

 

[basketcase]

When is ron going to wake up and realize what his democratic opposite, Denis the UFO boy discovered and just go home.

 

[markvee]

Dennis Kucinich realized that he was out of money and needing to save to fight for his Congressional seat. Ron Paul does not have this problem by virtue of having plenty of money. Mike Gravel does not have this problem by virtue of not having a seat in the Congress to save. So there are still 2 peace candidates in the running.

Dennis Kucinich is another victim of ad hominem argument, every idea he ever had wiped out because he admitted to seeing an object, which he could not identify, flying through the sky.

 

[basketcase]

Peace Candidate. I like that.

 

[markvee]

I like describing Kucinich as a peace candidate rather than a UFO boy candidate because I think that, for Kucinich, the campaign was more about peace than about UFOs. Kucinich's campaign slogan was "Strength through peace".

Ron Paul and Mike Gravel also deserve to be described as peace candidates because, like Kucinich, they are advocating immediate and complete withdrawal from Iraq.

 

[basketcase]

I think isolationist is more apt.