[lbo-talk] Wall Street Rules

Doug Henwood dhenwood at panix.com
Fri Jun 23 09:30:53 PDT 2006


On Jun 23, 2006, at 12:02 PM, Ira Glazer wrote:


> For this reason, it was striking to see a piece ("Confusion From
> the Fed Head") in the Washington Post's Outlook section in which
> Richard Yamarone, an investment analyst, matter of factly asserted
> that Wall Street controls the Federal Reserve Board of Fed. As Mr.
> Yamarone put it, "The Fed chairman may be appointed by the
> president and confirmed by the Senate, but his real bosses are on
> Wall Street."
>
> This statement is an incredible indictment of the U.S. political
> system.

Yes - but it's not just "politics," narrowly defined. If Wall Street thinks the Fed is too loose, investors will dump bonds and drive up long-term interest rates. Stocks would almost certainly follow down the drain. So there would have to be some quasi-appropriation of the financial markets to change this political fact.

Doug



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