Fed Up Quotes

“I preferred Warren Buffett’s definition: “It’s like most trends—at the beginning it’s driven by fundamentals; in the end, by speculation. It’s just like the old adage: ‘What the wise man does in the beginning, the fool does in the end.’” By all measures of the data, the fools had piled in.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The sign greets visitors in the Norsk language, which translated to English reads: “Theory is when you understand everything, but nothing works. Practice is when everything works, but nobody understands why. At this station, theory and practice are united, so nothing works, and nobody understands why.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Theory is when you understand everything, but nothing works. Practice is when everything works, but nobody understands why. At this station, theory and practice are united, so nothing works, and nobody understands why.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“My concern is with the transmission mechanism for activating the use of the liquidity we have created, which remains on the sidelines of the economy,” Fisher said. “I posit that nonmonetary factors, not monetary policy, are retarding the willingness and ability of job creators to put to work the liquidity we have provided.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“These people gang up academically on naysayers,” he told me. “If it’s not in their models, they shut it out.” Any challenge from outside was rejected.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“One researcher involved with the study said that a survey of economists revealed that more than a third admitted to “searching for control variables until you get the desired results.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The Fed’s relatively enhanced standing among the public has been aided by the fact the Fed has always paid a great deal of attention to soothing the people in the media and buying up most of its likely critics.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“At 6 P.M. Paulson and Bernanke briefed members of the House and Senate leadership. They had little choice, Bernanke explained. AIG was one of the ten most popular stocks in Americans’ 401(k) accounts. The Fed would have to loan AIG $85 billion.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The basic task performed by the credit rating agencies was to strip derivatives of their individuality. Whether it was David Bowie pioneering securities derived from the perpetual value his music had created or a 30-year conventional mortgage, once a credit rating had been assigned, investors were agnostic. Bowie’s AAA-rated royalties and the AAA mortgage on the house next door were interchangeable, or as Gorton said, “informationally insensitive.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“This was classic regulatory arbitrage. Bank managers were not unaware of the risks they courted. Wall Street has simply never kowtowed to regulations that pull the plug on profitable businesses. They always find their way around them.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The Economist wrote that the Fed was “taking the unprecedented (and, some say, disturbing) step of financing up to $30 billion of Bear’s weakest assets. This could cost the central bank several billion dollars if those assets fall in value.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Gambling has been fed by knowledge that, if disaster struck, someone else—borrowers, investors, taxpayers—would end up bearing at least some of the losses,” wrote the Economist. At every stop on the securitization gravy train, investment banks generated big fees for themselves. They had no incentive to tap the brakes.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“At Bernanke’s bidding, the Board of Governors held an emergency telephone conference on Friday, March 14, at 5 A.M. and voted to authorize the New York Fed to loan up to $30 billion to JPMC to bail out Bear Stearns. The transaction was carried out by the New York Fed’s SOMA through a newly created entity called Maiden Lane LLC. (The New York Fed is bordered by a street with that name.) The New York Fed loaned Maiden Lane about $28 billion to purchase approximately $30 billion in toxic assets from Bear Stearns. JPMC lent Maiden Lane about $1.15 billion for a ten-year term, accruing interest at the primary credit rate plus 450 basis points.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The financial markets had been subjected to overreaching intervention in one form or another since Greenspan assumed leadership of the Fed. Less intrusive Fed policy would have allowed for the price discovery so essential to market functionality and the prevention of the boom-and-bust cycles that so worried von Mises in his day.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The transformation of my role at the bank began on February 7, 2007, when HSBC Holdings announced that its bad debts for the previous year would total more than $10.5 billion—20 percent over expectations—due to problems in its portfolio of subprime mortgage derivatives.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Rosenblum had joined the Chicago Fed in August 1970, when the Fed was under the disastrous leadership of Burns, who had written a definitive book on business cycles. Pressured by President Richard Nixon, Burns would institute policies that resulted in double-digit inflation.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Usually an upbeat affair, the BCA conference in 2006 proved disturbing. Harvard professor Niall Ferguson asked a strange question: Why hadn’t the recent assassination of a Russian central banker, a Thai coup d’état, and a North Korean nuclear bomb test triggered a stock market rout?”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Called before Congress during the ongoing implosion of Wall Street in October 2008, Greenspan, his upper lip visibly quivering, admitted that he was shocked to discover a defect in his free-market model of the economic system. He didn’t acknowledge, however, that there was nothing free market about the Fed and its fixing of interest rates.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The big surprise: in his dissertation Greenspan addressed housing bubbles. “There is no perpetual motion machine which generates an ever-rising path for the prices of homes,” he wrote. It’s too bad he didn’t believe his own words.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“In 1996, my first year on Wall Street, the New York Times wrote a story pointing out that IBM, which had employed more than two dozen in-house economists in the 1970s and ’80s, had canned them all. Many other major corporations like General Electric had done the same, preferring to use commercial services. Why? Because high-paid economists’ predictions were unreliable.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“A letter published in the Times of London on March 30, 1981, signed by 364 prominent economists, predicted that Margaret Thatcher’s stringent fiscal policies would be disastrous. The UK’s spectacular economic turnaround proved they were dead wrong.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Economist John Kenneth Galbraith in 1978 famously predicted that General Motors so dominated the auto business that other companies would be foolish to try to compete. At the time, the unionized GM held 46 percent of the market. But other auto companies eroded its dominance over the next three decades. In 2008, GM was rescued with a government bailout. By 2014, the auto giant commanded just 17 percent of the market.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The Federal Reserve has always advertised itself as being above politics, impervious to outside influence. This is, of course, nonsense. The chairman is appointed to a four-year term by the president of the United States and must be confirmed by the Senate. Members of the Board of Governors are appointed to staggered fourteen-year terms by the president and are also approved by the Senate. It is common for governors to be appointed to an unfilled term if someone resigns before the end of their tenure. But the governors cannot be removed for their policy views—not by the chairman, or the president, or Congress. They have complete and total immunity.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“As a reminder, among other things, the FOMC sets the fed funds interest rate, the rate at which commercial banks lend reserve balances to each other on an uncollateralized basis in the overnight market.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Setting monetary policy is the job of the Federal Open Market Committee (FOMC), composed of the seven members of the Board of Governors in Washington and the presidents of the twelve District Banks.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“The Fed’s fingerprints were all over this boom, and not just because of Greenspan’s low interest rates. In 1993, in response to initiatives by the Clinton administration to make housing more affordable for minorities and the poor, the Boston Fed produced a widely circulated paper called “Closing the Gap: A Guide to Equal Opportunity Lending.” “Lack of credit history should not be seen as a negative factor” in obtaining a mortgage, the Boston Fed guide noted. As an effort to counter “unintentional” racism in lending markets, the guide sanctioned lowering traditional mortgage-lending standards. Not enough saved for a down payment? No problem. The Boston Fed’s PhDs encouraged banks to allow loans from nonprofits or government assistance agencies to go toward a borrower’s down payment, though such borrowers are more likely to default on their mortgages. The Boston Fed distributed more than ninety thousand copies of this remarkably naïve guide. The mortgage industry, anxious to extend its reach and generate fees, embraced its suggestions.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“Banks traditionally profited by capturing the difference between the interest rate at which they made loans and what it cost them to borrow. With rates so low, they had to make up what they were losing on that spread with volume, or trash their lending standards to charge higher interest rates to subprime borrowers.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“I worked for one of those who pushed back against the majority. He was the lone member of the FOMC who voted against the professor’s theories at that fateful meeting. He fought the good but lonely fight, and I, in my capacity as trusted adviser, waged many a battle with him. But the sad truth is we lost the people’s war. In a world rendered unsafe by banks that were too big to fail, we came to understand the Fed was simply too big to fight. I wrote this book to tell from the inside the story of how the Fed went from being lender of last resort to savior—and then destroyer—of America’s economic system.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“By mid-2015, only 62.6 percent of adult workers were employed or actively looking for a job, the lowest in nearly four decades. The so-called shadow unemployment rate is estimated to be as high as 23 percent. Many of these people will never come back into the workforce.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America

“With interest rates on CDs near zero, the average boomer household would need $10.6 million in principal to safely earn $15,930 in interest, the annual income at the federal poverty-line level for a family of two.”
― Danielle DiMartino Booth, Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America