Sarrera gisa, ikus ondokoak:
Zazpi gezur politika ekonomikoan (Warren Mosler-en aurkezpena, 2015)
Zazpi gezur politika ekonomikoan (ingelesez eta espainieraz)
Warren Mosler: zazpi gezur politika ekonomikoan (bertsio laburtua)
Warren Mosler-ek: Politika ekonomikoaren gezurrak
Bosgarren gezur inuzentea (Warren Mosler)
Warren Mosler: 8garren gezurra politika ekonomikoan
Segida:
7 DIF audio book:
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WARREN MOSLER | Modern Monetary Theory
7 Deadly Innocent Frauds, read and written by Warren Mosler
The 7 Deadly Innocent Frauds of Economic Policy (read by me)
6 Videos
https://videos.files.wordpress.com/u7q0fGoT/seven-deadly-innocent-frauds-audio-book-2.mp4
(24:40 m)
https://videos.files.wordpress.com/YIyd0Lmi/seven-deadly-innocent-frauds-audio-book-3.mp4
(22: 51m)
https://videos.files.wordpress.com/Hm8yL1Yz/seven-deadly-innocent-frauds-audio-book-4.mp4
(2: 19 m)
https://videos.files.wordpress.com/p614Lv1b/seven-deadly-innocent-frauds-audio-book-5.mp4
(21.09 m)
https://videos.files.wordpress.com/ks4Y8QXu/seven-deadly-innocent-frauds-audio-book-6.mp4
(38: 10 m)
oooooo
Warren Mosler | Deep 6 The Financial Sector
youtube.com
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Warren Mosler | Deep 6 The Financial Sector
(https://www.youtube.com/watch?v=urXHOddxwAE)
Presented 17 July 2024 | MMT Conference | Leeds University
Transkripzioa:
0:07
[Applause]
0:11
who you came up with a bid off I had
0:12
never heard that
0:14
so
0:18
Amer all right proposals to gut the
0:21
financial sector now a lot of these are
0:24
proposals for Scotland so somehow one
0:27
fits in the other uh number one
0:30
permanent zero rate policy again I don’t
0:34
like why not and you know about the
0:37
univers UMKC buaro right I went through
0:40
that there’s always a zero
0:43
rate eliminate tax advantage savings
0:47
incentives what’s that all about uh
0:51
chapter six in the seven deadly inoc and
0:54
frauds that um out there there’s this
0:58
understanding in Congress
1:00
it’s a deadly innocent fraud that we
1:02
need savings to have money for
1:04
investment which is completely backwards
1:06
savings is the accounting record of
1:08
investment cation of investment to
1:11
savings you know it’s just backwards but
1:13
they have it backwards and
1:16
uh we’re going to eliminate those
1:19
because when they put on tax advantage
1:22
savings incentives in the US you put
1:25
money in your pension fund is before tax
1:28
money so you earn a dollar to pay 30
1:31
cents in taxes or you can put the whole
1:32
dollar in savings until the end it’s
1:34
compelling not to spend your money so we
1:37
have all these tax incentives not to
1:39
spend your money what does that mean it
1:41
means there has to be deficit spending
1:44
on the other side or else they exp poos
1:49
when we look at last year’s numbers the
1:51
income and the savings won’t be there
1:54
somebody has to spend more than their
1:55
income to create the savings that you’re
1:58
going to put away so but what it does is
2:00
it creates that’s what’s creating these
2:03
giant pools of savings the 40 trillion
2:06
under management by asset managers that
2:08
are doing all the damage so what we’re
2:10
trying to do is cut off the source cut
2:13
this stuff off at source my idea has
2:17
always been rather than pay out a dollar
2:19
then try and Claw back claw it back
2:21
don’t pay it out to begin with okay and
2:24
that’s the whole thing set
2:25
around requiring public companies to
2:28
offer unlimited new shares that price
2:30
that’ll be above their current market
2:32
share that will end stock market
2:35
appreciation in terms of price investors
2:38
will still get more value through
2:40
earnings and dividends which is what the
2:43
whole investment theory is all based on
2:45
anyway not price speculation and it
2:47
eliminates vast uh numbers of people
2:50
involved in uh the fact that stocks
2:53
trade all you know go
2:54
up
2:56
um full bank deposit insurance overdraft
3:00
and F and also that would That’s The
3:05
Logical conclusion of anybody looking at
3:07
banking system from a clean sheet of
3:09
paper versus what we have now it
3:11
eliminates another big chunk in the
3:13
financial
3:15
sector okay direct employment in the
3:19
financial sector over 3 million people
3:22
these are Big
3:24
Numbers over a million employed in
3:27
capital markets
3:32
how much do they make 98,000 to 180,000
3:35
average salaries these are large numbers
3:37
even to the
3:41
US cost with the financial sector now I
3:44
look at real compliance costs not the
3:48
money legal
3:50
expenses you can look at the numbers JP
3:52
Morgan I don’t know 10 billion dollar a
3:54
quarter or some crazy thing but what’s
3:56
behind that all the people getting paid
3:58
for that the lawers all the clerks all
4:00
the people teaching them in school the
4:02
professors their educations uh all the
4:05
court cases paper Court won’t just give
4:08
you a file you know they have to print
4:10
everything you know how many trees to
4:12
cut down to these courts it’s crazy and
4:15
uh but all the associated legal expens
4:18
all the anxiety associated with getting
4:20
sued by the IRS or having to do all this
4:23
stuff all the medical attention you all
4:25
goes wet on any expenses
4:29
staggering costs here all gone
4:32
educational expenses energy
4:34
consumption massive amounts of energy
4:37
consumption and all this from everything
4:40
from all angles I’m going to raise
4:41
through this little bit regulatory
4:43
expenses government expense Monitor and
4:45
regula all this stuff um just think
4:49
about what all the regulation behind the
4:50
stock market all the regulations behind
4:52
that all the banking Regulators
4:55
computational resources I don’t remember
4:57
what that is computers
5:00
data science huh data
5:03
Cent data Cent are using more energy
5:05
than the whole
5:07
city
5:09
um proposed permanent zero rate policy
5:12
what does that mean the banking systems
5:15
cost of funds is zero how do you do it
5:17
by the way you just when the government
5:19
deficit spends it credits accounts and
5:21
then money just stays in those accounts
5:22
it’s really simple you don’t sell bonds
5:25
and you don’t pay interest on the
5:26
accounts Japan’s been doing it for 30
5:28
years right and and there are no bad
5:31
effects it’s one of the nicest places to
5:32
live in the world and U uh no issues
5:37
about what might happen if we didn’t
5:39
have government securities except you
5:40
eliminate you know whole armies of bond
5:43
Traders and that whole cottage industry
5:45
that’s spawn around it and and think
5:47
about the income distribution issues
5:49
that started that this thing feeds right
5:53
because of the tens of millions of
5:54
dollars a year these managers are making
5:57
to do something that doesn’t need to be
5:58
there they could be out curing cancer
6:01
doing something
6:02
useful um so cost of funds is zero it
6:06
doesn’t mean all interest rates at zero
6:08
rates are risk adjusted in Japan the
6:11
cost of funds is zero but more you do is
6:13
are at 3% okay maybe a corporate loan
6:16
it’s a risky business might be 5% the
6:18
market figures that out but their cost
6:20
of funds is zero you’re not giving the
6:23
banks free money or anything like that
6:25
that’s their cost of money to make money
6:27
they have to find a a borrower and then
6:29
compete with the other Banks and the
6:31
spreads get compressed I could show you
6:33
a chared bank interest margins it’s not
6:37
much and it’s th and it goes down okay
6:39
so it’s not about giving anything to the
6:41
banks okay Bank lending prices risk
6:44
adjustment unlimited overdrafts for
6:46
member
6:48
banks okay and the reason for that
6:53
is the way it works
6:56
now AR
6:59
I’ve got my make a payment to you and
7:01
I’ve got my money in a bank and I write
7:04
a check and give it to you and you
7:06
deposit it in your bank and the check
7:08
clears you’ve heard the word
7:10
clear how does it get how does money
7:14
disappear from my account and get into
7:16
his account your account what happens
7:19
nobody takes a wheelbarrow and runs
7:21
across the street or something B nothing
7:24
have what they do is both banks have an
7:27
account in a Third Bank which is called
7:30
a clearing Bank the central bank it’s
7:32
between the banks I have an account
7:34
there your bank has an account my bank
7:37
has an account there your bank has an
7:39
account there so when I write a check
7:41
what happens is they said the Federal
7:43
Reserve or the ECB the central bank will
7:46
subtract the money from my bank account
7:48
and add it to your bank’s account and
7:51
now both Banks you know have the correct
7:53
information and they can account for
7:56
everything and however neither have any
8:00
money in our account to begin with
8:01
neither bank has any
8:03
money my account is now negative and the
8:06
other bank’s account is
8:08
positive and what happens today in the
8:10
market to reconcile that is I have my
8:13
bank has to go to your bank and borrow
8:15
the money back and then the
8:18
FED lends you know because once the
8:20
money is borrowed then it goes from your
8:22
bank it’s Lo back to my bank and both
8:24
banks are back to
8:26
zero okay so I I pay you my bank has to
8:30
borrow the money from your bank you know
8:31
to clear this thing that’s how it works
8:34
so who’s doing all this borrowing and
8:36
lending back and forth between Banks
8:38
that’s called interbank
8:40
lending these people don’t come cheap
8:42
okay and there’s thousands of them we
8:44
have 4,000 banks in the United States
8:46
you got all these people tied up and
8:48
doing this it doesn’t have to be that
8:49
way the central bank can just say one
8:52
bank’s negative and the other’s positive
8:53
and just leave it like that you don’t
8:56
have to have do all this other stuff
8:58
these aren’t gold coins or anything
9:00
right and uh and if you just leave it
9:03
there what does that mean okay it means
9:06
my Banks borrowing it from the FED
9:08
instead of borrowing it from your bank
9:10
so what it doesn’t matter it’s never
9:13
mattered and this way to do things is
9:15
how Banks and Emerging Markets start
9:18
until they’re sophisticated enough to
9:20
start having interbank people doing it
9:22
the other way spending money on
9:24
compliance and everything else so
9:26
there’s anyway you don’t want to hear
9:28
any more about it
9:30
so unlimited overdrafts to bank numbers
9:32
it doesn’t mean um Banks can now borrow
9:36
all they want and lend all they want
9:38
lending is not constrained by how much a
9:40
bank can borrow there’s not a line of
9:42
borrowers at a bank waiting for them to
9:44
get the money have you ever got your
9:46
bank and say okay wait in the line we
9:48
don’t have the money yet of course okay
9:51
the bank lending is constrained by
9:53
people borrowing by credit worthy
9:56
borrowers when that they can wory
9:59
borrower borrows money and what you do
10:02
is sign a promissary note and the bank
10:04
buys that note from you and puts the
10:07
that number of dollars or pounds in your
10:10
account and then that note is an
10:12
asset okay and then if you want to take
10:14
that money out it has that asset to
10:16
borrow money you can borrow it just as
10:18
easily from the Central Bank through a
10:20
overdraft as it can from another bank
10:22
get back the funds that you just moved
10:24
out
10:26
anyway unlit over Justice there’s no Mor
10:29
has there’s no operational anything
10:31
associated with it nobody would ever
10:33
know the difference no treasury security
10:36
is longer than 3 month bills bonds no
10:38
bonds I’m in the no bonds but for the US
10:42
institutionally
10:44
specific the treasury can decide whether
10:47
it wants to do 30-year bonds 10e bonds
10:49
or three Monon bills it makes that
10:51
decision it’s called debt management so
10:53
I can just decide to go to three-month
10:54
bills it doesn’t require any legislation
10:57
any approval by anybody El it’s just a
11:00
policy change so if the treasury
11:01
secretary says we’re only going to go
11:03
three Monon bills it’s done three Monon
11:05
bills don’t get traded they don’t have
11:07
this huge industry out there supporting
11:11
million dollar salaries and all that
11:13
they’re just like regular cash the way
11:15
they Ed so for institutional Simplicity
11:18
we just say nothing longer than
11:20
three-month bills and it can get done
11:21
tomorrow it doesn’t have to wait and go
11:23
through this whole Bing process and
11:25
everything else uh and it’s with a zero
11:28
rate policy so the interest is going to
11:30
be zero on all those and in fact
11:32
treasury bills tend to trade at a lower
11:34
rate you have zero rates like Japan or
11:37
like we had in the US it was not
11:39
uncommon for treasury bills to trade at
11:41
negative interest rates uh the FED will
11:45
have a bid for longer data security so
11:47
that the long-term treasury Securities
11:49
out there there’s not going to be any
11:51
market so we don’t need any bond Traders
11:54
and they’ll eventually mature that used
11:56
to be what the joke back when I was in
11:59
trust what’s the difference between
12:01
bonds and bond
12:03
Traders the bonds eventually mature
12:09
right so the outstanding bonds will just
12:12
be there to be sold to the FED at near
12:14
zero range maybe five days point so
12:16
there’ll be no money no incentive for
12:18
anybody to be out trading bonds anymore
12:20
and so this is getting rid of this per
12:24
permanent zero rate policy with couple
12:26
of operational things with it it’s
12:28
getting rid of big chunk of the
12:30
financial sector now what’s wrong with
12:34
the financial sector in 1976 I was
12:36
working at a Savings Bank Manchester we
12:40
I was paid $140 a week we left at 4:00
12:43
every day and play golf we took in
12:46
deposits at 5% loan about mortgages at
12:49
8% there were 2.6 million housing starts
12:52
that year the population was less than
12:54
200 million people today with 350
12:58
million people and the financial sector
13:02
now 30% of GDP uh S&P earnings back then
13:06
was under 5% it’s just us guys running
13:09
the stupid Savings of loans for no money
13:12
easy easy thing uh today with this
13:15
massive financial sector housing starts
13:18
just came out today 1.4 million with
13:20
almost double the population and it’s
13:22
you know it’s like picking up it’s
13:24
looking good right the financial sector
13:27
doesn’t add anything to financing any
13:29
anything real in the real world all you
13:31
need is a couple of Clerks people walk
13:33
in they qualify under the rules you give
13:35
them the load and they walk out you
13:36
don’t need all this other stuff around
13:38
it that we have and it’s staggering in
13:40
is you know size complexity and eating
13:44
up real resources using up real energy
13:47
that can either be not used or deployed
13:49
somewhere
13:51
else real Gams eliminates in Bank
13:54
lending eliminates trading of Treasury
13:56
eliminates interest expense you know
13:59
about that I don’t have to say anymore
14:01
1.2 trillion a year eliminates tens of
14:04
thousands of those employed in this
14:06
aspect of the
14:07
fin eliminate tax advantage savings
14:10
incentives we talked a little bit about
14:12
it uh for every entity that spent less
14:14
than its income and other spent more
14:16
than its income or else the numbers
14:18
wouldn’t be there tax advantages provide
14:21
incentives to not spend income this
14:24
income can’t be realized without
14:26
spending by another enti all these
14:28
people are against big deficits they’re
14:30
in favor of big savings conscent you
14:33
know they’re creating their own thing
14:34
that they don’t
14:36
like public and private deficit spending
14:38
are the source of investment funds for
14:41
the financial sector so this is all
14:44
loans creates deposits investment
14:46
creates savings and that all gets
14:50
um is a source of the funds the 40 50 60
14:54
trillion dollar under management getting
14:57
seriously large fees
14:59
paying people seriously large amounts of
15:01
money and being fed upon they’re the
15:04
whales okay they’re not the Sharks the
15:06
sharks are the Wall Street groups that
15:08
hire the best of them pay them 10 times
15:10
as much to call their old buddies to
15:12
make sure they get the business off of
15:15
them and make their uh money off of
15:18
those this sector those are the 40 to 60
15:21
trillion dollar whales at the sharks of
15:23
Wall Street or feeding out you just cut
15:25
off the food supply it all goes away you
15:27
have it like done anything personally to
15:30
anybody it’s just not there
15:32
anymore um eliminating tax advantage
15:35
eliminates the savings desires because
15:37
they’re created by taxes facilitating
15:40
the deficit spending gra the funds that
15:42
support the financial sector so we’re
15:44
going to take away and support by
15:46
changing the savings rules and then it
15:48
just goes away instead of leaving
15:51
everything in place letting them make
15:53
you know hundreds of billions of dollars
15:54
and trying to figure out how to tax tax
15:57
transactions taxes which never happen
15:59
happens not going I’m against it but you
16:01
know it’s not going to happen it just
16:03
doesn’t
16:05
happen real games from eliminating this
16:08
the reversal of the rapid growth of the
16:10
then Contracting bases of savings
16:13
transitions tens of thousands of
16:15
financial professionals to other sectors
16:17
it’s a huge brain drain these guys gone
16:19
to Wharton and LSC they’re the top
16:21
people out there instead of curing
16:23
cancer they doing this stuff okay this
16:25
makes no sense at all from a public
16:27
purpose point of VI real inv vment will
16:29
continue to create its own savings both
16:31
through the banking system and private
16:33
funding markets it’s not going to
16:34
interfere at all with real investment in
16:37
fact you get all these people now doing
16:40
other things you’ll see you know the
16:42
real investment that we like expanding
16:47
exponential total assets andal is higher
16:49
than the value of assets under
16:52
Europe 47 trillion Us in 2022 I sure you
16:56
it’s gone up substantially
17:00
uh require public corporations to offer
17:02
unlimited new shares at a fixed price
17:05
but a seal it puts a ceiling on the
17:07
price of the stock if the Stock’s at 10
17:11
and but the company has to issue
17:13
unlimited shares at 20 it’s never going
17:15
to go above 20 once the price is 20 now
17:18
you’re buying new shares from the
17:19
company they’re offering them at 20 it’s
17:22
not going to go to 21 because you can
17:23
buy new shares from them it’s giving the
17:25
company money which will earn in you
17:27
know interest initially
17:29
of course under zero rates it’s not
17:30
going to very much interest but it’s
17:32
there as an asset of the company it’s
17:33
not taking anything away from them if
17:35
that’s means the return on Equity isn’t
17:38
high
17:39
enough to attract investors you’re not
17:41
going to pay
17:42
20 because when you buy it you know what
17:44
happens to the company and if that
17:46
causes it and if you make a mistake and
17:47
buy it and you have to sell it at 18 or
17:49
something well that’s your problem at 18
17:52
somebody’s buying it because it’s a good
17:53
investment based on what’s going on in
17:55
there the investment is based on the
17:57
earnings of the company and ability to
17:59
eventually give you back more money than
18:01
you started MC and so that’s what
18:04
investment is all about that’s how the
18:06
investment models work you know private
18:08
equity and everywhere else so in the
18:10
stock market thing that it turns into a
18:12
casino so we take away the casino aspect
18:14
of it it takes away all the people
18:17
servicing the casinos right uh and not
18:21
that these people have any political
18:22
aways but to the extent that they do
18:24
that goes away and I think that might be
18:27
very helpful
18:29
uh and this existing investors and
18:32
purchase at the lower price benefit for
18:33
new sh so no nobody gets hurt investment
18:36
works out the way it’s supposed to work
18:37
out the incentive to speculate on Price
18:40
is largely eliminated which means all
18:43
that stuff goes through which is the
18:45
important thing trading in stocks is
18:47
dramatically reduced BuyBacks are
18:50
largely and eliminated all these all
18:52
this financial manipulation goes away
18:54
when you don’t have something to
18:56
manipulate just take away the toys
19:00
okay real gains from capping stock
19:03
prices tens of thousands of people
19:05
directly and indirectly and while the
19:06
stock trading lose their livelihoods and
19:09
be redeployed to useful
19:11
endeav anybody any environmentalists
19:14
have any ideas where people could get
19:15
redeployed
19:17
to okay massive quantities of real
19:20
resource and consumption all these guys
19:21
have computers they don’t have like the
19:24
cheap ones okay they don’t have the ones
19:26
that burn 10 watts of power they’re
19:27
looking at the 50s
19:29
75s our the load on the grid would
19:33
probably drop in half without this mass
19:36
of quantities of real resour SE can be
19:39
redirected or
19:42
curtailed banking proposals full Deposit
19:44
Insurance eliminate the need for money
19:46
market funds you know all those money
19:48
market funds instead you just put your
19:50
money in the bank why don’t people do
19:52
that other they’re worried about
19:53
security and the money market funds that
19:55
collateral treasuries okay once if you
19:58
have full Deposit Insurance you put your
20:00
money in the bank they’re saying what
20:01
about the Pension funds who need
20:04
government bonds or whatever put their
20:05
money in the bank if it’s government
20:06
insur that is a Government Bond okay
20:09
nice and simple and again 30 years this
20:12
has been going on in Japan with no bad
20:14
side effects so I don’t want to hear
20:17
about need these to be termined prices
20:19
and asset values I was there before any
20:22
of that was there I first started to
20:24
word up treasury Longs we got along
20:26
perfectly well without
20:30
unlimited collateralized borrowing from
20:31
the discount window we talked about this
20:33
eliminates liquidity issues and
20:35
interbank training you know if I call if
20:38
if I write a check to one of you guys
20:41
money goes from the FED changes the
20:43
money from my back to your bank and
20:44
yourbank won’t lend me the money because
20:47
I don’t know why the guys AR playing
20:49
golf won’t answer the phone there have a
20:51
banking crisis like svb that’s all they
20:53
are liquidity crisis had nothing to do
20:55
with their assets and quality of
20:57
earnings you know it’s like if the
21:00
president’s uh Bank America if somebody
21:03
sees his wife with a City Bank charge
21:05
card and starts a rumor Bank America is
21:07
in trouble he’ll be gone tomorrow that
21:09
happened in 2008 with wov they were gone
21:12
the next day with 40 billion in net
21:14
worth that fed had to liquidate him
21:15
because nobody would lend back the money
21:18
that depositors were moving around
21:20
because everybody was petrified okay
21:23
that all goes
21:25
away eliminate Financial assets is qual
21:28
collateral eliminate state sponsored
21:31
financial leverage you can take your
21:32
stocks down go to bank and borrow
21:34
against them you can take your bonds go
21:36
to bank and borrow GI that’s speculation
21:39
that needs speculation I buy stocks
21:41
borrow the money to pay for it I don’t
21:42
have to put up very much I can buy twice
21:45
as many or 10 times as many depending on
21:47
The Leverage isues right why are we
21:50
doing this now an individual wants to do
21:52
it for somebody else that’s one thing
21:54
but when it’s through the banking system
21:55
this is state sponsored speculation is
21:58
the point the public purpose behind that
22:01
just don’t allow
22:03
it um the attention of agency issu
22:07
mortgage back
22:09
Securities okay this is a little more
22:11
interesting this is what PJ was talking
22:12
about before so when you take out a
22:18
mortgage whoever holds that whoever
22:21
loans you the money has a
22:23
risk it’s not just the risk of your
22:26
house there’s a risk because rates go
22:31
down you’re going to pay it off and
22:33
refinance so he thought he had a 30-year
22:35
mortgage and all of a sudden he’s got a
22:37
onee mortgage and if he was counting on
22:40
that because he had promised somebody
22:42
like a pension fund a 30-year return
22:44
something like that he’s in trouble okay
22:47
in the reverse happens if interest rates
22:49
go up something he thought that was
22:51
going to pay off over 67 years the more
22:54
might stay out there for 30 years and
22:56
now rates are higher and he money St and
22:58
it get replace at lower R right right so
23:03
um yeah so so what What DJ is saying is
23:08
if if I got an investor and I buy a 7%
23:10
mortgage because rates that’s what they
23:12
are today all of a sudden rates go back
23:14
to where they were mortgages are 3% you
23:16
paay it off now I’m stuck in the cash I
23:18
got to reinvest it at 3% because the new
23:21
mortgages are three now I put a three
23:23
instead of a seven well that’s not what
23:24
I wanted when I went to seven vice versa
23:28
put on a 7% mortgage today I think it’s
23:30
going to be a six or seven or eight year
23:32
mortgage because that’s payoff R go to
23:35
10 I’m going to be stuck with this thing
23:37
forever so so I have a risk it’s called
23:40
convexity Fancy name it just means
23:43
you’re backwards on this so because of
23:45
that I have to get a higher yield to
23:47
make up for it so today the 10-year note
23:50
treasury might be 4 and a half% but I
23:52
want seven on a mortgage because I’ve
23:54
got this rist I don’t know if it’s going
23:55
to be a one year or 30 year and it’s
23:59
whatever it is I know it’s going to be
24:00
working against me if it happens it’s a
24:02
one year it’s because you know rates
24:05
came down and now I’m stuck reinvesting
24:06
at the low rate to 30 I’m stuck with my
24:08
BX it’s a lose lose for me so the
24:10
question is how much higher do I have to
24:12
charge
24:13
you you know to make up for that so
24:15
mortgages are always more expensive than
24:18
you’d expect just looking at rates in
24:21
newspaper something because the lender
24:23
taking this risk now you’re getting a
24:26
benefit rates go down you get the low r
24:28
it’s great FR go up got them plenty of
24:30
people now with 3 and half% rates going
24:32
great seven so you’re getting the
24:35
benefit they getting the L if the
24:37
government the FED who bought all these
24:39
mortgages or if the mortgages have been
24:41
funded by them to begin with they can
24:43
loan them
24:44
back they don’t care about that
24:47
con okay so what happens to a a private
24:51
sector lender who has all these
24:53
mortgages he has to do what’s called
24:56
hedging is rates starting to go down he
25:00
has this stuff he’s like oh my God rates
25:03
are going down I’m going to lose all
25:04
these I’ve got to sell and fr start
25:07
goinging up it’s like you know I have it
25:10
right the box so they’re always like
25:12
buying and selling like crazy to try and
25:15
offset this risk that they have they
25:17
have complex financial analysis that use
25:20
computers that use energy to try and
25:22
figure out this risk it’s an enormous
25:24
business servicing these guys because
25:26
they’re buying and selling all the time
25:28
try and hedge this risk it all goes
25:30
anyway it all goes away if the
25:31
government holds it they don’t care you
25:34
pay it off fine money goes into the
25:36
government if they have it for 30 years
25:39
they have it for 30 years they don’t
25:40
care they don’t have a funding cost on
25:43
the other side so it serves public
25:45
purpose to retain mortgages to have
25:47
mortgages all held by a government
25:49
agency rather than the private sector if
25:52
it’s in the private sector it causes
25:54
volatility it causes a whole herd of
25:57
people they have to buy and sell all the
25:59
time moving markets more than they
26:01
otherwise mooved to try and mitigate
26:03
this
26:04
risk okay and so you don’t want that and
26:08
with the Federal Reserve having bought
26:09
all those mortgage back Securities the
26:11
volatility in the treasury market and
26:13
the interest rate markets went way down
26:15
which was a good thing nobody I’ve never
26:17
seen them write it up but
26:20
anyway real gains from banking composers
26:23
eliminates tens of thousands of people
26:25
directly and indirectly in current Bing
26:27
activities can be redeployed to useful
26:29
Endeavors that’s
oooooo
