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#2: "I don't like pirating films but there are a lot of movies on the list that there is literally no other way to get a hold of (as in movies that have never even been released on VHS, let alone DVD) and even the torrent sites failed me on a few of them (if there's anything I've learned in the last couple of years it's that pirating films is only easier if you're after mainstream films). I really had to scrounge the depths of the internet to find all of them but eventually I managed to turn every one of them up."

I wonder how many of those hard-to-find films still have active copyrights?

Pretty much all of them. Not that it matters.

Cinephile torrent sites like karagarga are, by far, doing the most and most important film preservation work in the world. The things you can find there are incredible.

So nice to see that Prof. Cowen is more than ready and willing to highlight more research that supports an average is over worldview.

If only someone could perform a study to see whether an attraction to eugenics as a way to frame policy is due to nature or nurture.

You seem like an intelligent person.
Stop pissing into the wind. Do something useful with your time.

#1 - The Fed doesn’t need an audit. It and the FRBanks need to be subject to bank examinations as are the Federal Home Loan Banks, some of which were in dire financial condition during the recent crisis.
The Federal Housing Finance Agency (FHFA) annually examines each Federal Home Loan Banks (FHLBs) and the Office of Finance. They designate a separate examiner-in-charge for each FHLB and the Office of Finance who serves as the principal point of contact for the management of examination issues at the assigned FHLB. Annual examinations are conducted by an examiner-in-charge and a team of examiners plus financial analysts, economists, et al.

How can an organization with the ability to expand its balance sheet without limit ever be in dire financial condition?

If its assets become worthless (a lot of which probably are).

That is precisely why there needs to be some control.

Because until the 1989 S&L crisis and the recent housing bubble (which the Fed fed) burst, the conventional wisdom was that RE prices never decline.

Has nothing to do with the Fed. That's simpleton, lunatic BS, Shaw.

The Fed's assets are mostly 3 month Treasury bills. QE has added to that mostly longer term Treasury bonds. On top of that the Fed has purchased some more private assets like mortgage backed securities (usually of the highest quality so it would take more than a simple decline in overall real estate prices to wipe them out).

But let's play the game. Suppose fracking unleashes large numbers of random monsters from deep underground resulting in massive real estate destruction. Even worse, these monsters are attracted to the houses of those with very high FICO scores and insurance loopholes do not cover monster attacks. As a result the Fed's mortgage back securities become worthless. Likewise suppose the US, after being taken over by lunatic Tea Party types declares a general debt default making many of the Fed's bonds and bills also worthless.

So what?

Unlike most normal banks, the Fed creates its own money so it doesn't have to borrow from depositors or the general market. If the Fed's balance sheet suddenly shrank dramatically, it would be sort of like your wife throwing away a winning lottery ticket you brought a year ago and totally forgot to check. Sure it would hurt your financial position but it wouldn't have any real impact on your day to day life. There's no one the Fed needs to pay back and even if there was it could print the money needed to do so.

What would be bad about the destruction of the Fed's balance sheet would be that the Fed would lose the ability to easily pull cash out of the economy if it wanted too. When the Fed sells assets or simply waits for them to mature it trades the assets for cash from the economy. It can then choose to keep the cash to itself thereby draining liquidity from the economy. If the Fed buys a lot of bad assets it could lose this ability and be stuck with an economy that has too much cash with no way to get rid of it all.

Even in that case, what exactly would an audit of the Fed accomplish in terms of prevention? I presume the purpose of an audit would be to ensure a proper accounting of all the Fed's assets. That wouldn't prevent assets that once were exceptionally safe from suddenly losing a lot of market value. And if that did happen wouldn't you have a lot of inflation? If prices were inflating both home prices would be rising and cash should be flowing into the Treasury from taxes. Why exactly would mortgage backed securities AND Treasury bonds become worthless? If anything the Fed need only hold onto them and collect the cash as they mature.

Boonton: reliably wrong.

So much magical thinking. Money means nothing unless people believe it does, so Boonton's point is vacuous.

Do either of you have any actual criticism?

That would require actual thought.

Rand Paul transparently wants more Republican political control over monetary policy. The political wheel always turns. Does he really want more Democrat control over monetary policy when it's their turn to govern again?

Is it really 'transparent'? His father was after the same thing for, what, 40 years? Sounds like, just perhaps, a principled stand? Maybe? Maybe, just maybe, as principled as Mr. Obama's gay marriage evolution? No. Couldn't be. Wouldn't fit your priors.

Yes it is transparent because there is no other purpose.

The Fed is, apparently, the Shroedinger's Cat of the Financial realm.

#4 Tao's role in laying the foundation for a formal understanding of compressed sensing just shows how truly awesome he is. The fact that he did it in a few days when Candès had come to him for help trying to explain an apparently anomalous computational result makes it all the more awesome.

All I'd add to 1. is that if you really think the Fed is an abomination immune to meaningful reform, why bother auditing it?

Paul pere definitely believed the Fed was beyond reform. Paul fils, as far as I could ever tell, is an opportunist who has lived off his father's political capital for his entire career in public life, and needs to throw his father's supporters red meat from time to time.


"We are– I’ll be blunt– audited out the wazoo. Every Federal Reserve Bank has a private auditor. We have our auditor of the system. We have our own inspector general. We are audited. What he’s talking about is politicizing monetary policy."

Privately auditing yourself is not really meeting the need for public disclosure. If they are already revealing everything they need then the proposed audit is merely a one-off irksome burden of the type that the Government wouldn't think twice about inflicting on a private firm.

So, I'm unsympathetic to the complaints about it.

What is the substantive argument against auditing the Federal Reserve?

"The Audit the Fed bill would change the law again, and allow the GAO to examine and criticize all monetary policy decisions without restriction."

Apparently this bill is less about going over the books, more about looking over the shoulders of the FOMC and Monday Morning Quarterbacking them.

It's the GAO's mission to critically examine government agencies accounting. So, that doesn't seem like a substantive objection to me.

This isn't about auditing their accounting, this is about auditing their _policy._

The argument against the bill is that an independent central bank is less bad than one controlled by a political body. It's not even dependent on whether or not you like who is in office: It's like civilian control of the military. The government gives the specialized group a goal, that group decides how best to achieve it. Don't like the methods or results? Pull a Lincoln and replace the general, don't pull an LBJ and start personally picking out bombing targets.

This audit bill sounds suspiciously like a way to pull an LBJ and try to micro manage the specialists.

I'd love to know more about those off balance sheet assets the Fed bought up back in 2008-2010 or so. But it doesn't sound like this bill is addressing anything like that, and hell, I haven't really looked. There might just be the answer I want already out there.

Your analogy is flawed. LBJ knew what policies his generals were following and the strategies, operations and tactics they were deploying to accomplish them. He was directly over riding their actions which is the commonly considered flaw in LBJ's actions.

Furthermore, a better analogy would be the President of the US. From the point of view of the Congress, the President is an independent actor. He does his own thing and Congress can't easily fire him if he isn't doing what they want. However, they certainly can examine his policies and comment publicly on them.

No one really knows precisely what the Fed is doing. I see no substantial reason why their actions should be secret. At least not several years after the fact.

" LBJ knew what policies his generals were following"

Congress knows exactly what the Fed is doing. Rand Paul just disagrees with the policies and the analysis and maybe the facts behind the policies and wants to over-ride them so the analogy to LBJ is apt.

Source, JC, otherwise one might be inclined to believe that you just disagree with Paul's politics.

The Federal Reserve is already audited. And it's balance sheet is a matter of public record.

Privately auditing yourself is not really meeting the need for public disclosure.

Almost no audits are publically disclosed. Individual and company audits by the IRS are private affairs between them and the IRS. Only publically traded companies are required to be publically audited every year but then their audit is only released in *summary* form. The nitty gritty details are private between the auditing company and the board of directors.

What is the substantive argument against auditing the Federal Reserve?

Being that the Fed is already audited the obligation is on the supporters of the bill to make their case for a different type of auditing in addition to what is already done. On top of that, given the statements made by many of the bills backers, I think those supporting the law have an obligation to demonstrate that this is really an ideologically neutral request and not an attempt to sneak in their monetary theories under the cover of a neutral sounding 'audit' of the Fed. That is a pretty valid concern IMO since many proposing the bill have also failed to convince many voters and policymakers that their monetary ideas rise enough above the level of rubbish to merit serious consideration.

" the supporters of the bill to make their case for a different type of auditing in addition to what is already done."

Sure, the supporters of the Bill need to get enough votes in Congress. I agree with this.

"That is a pretty valid concern IMO since many proposing the bill have also failed to convince many voters and policymakers that their monetary ideas rise enough above the level of rubbish to merit serious consideration."

The fact that they don't convince everyone of the need for it is hardly a substantive reason. That's seldom true of any action or vote in Congress. They merely need to convince a majority of Congress.

Furthermore comments like:

"and not an attempt to sneak in their monetary theories under the cover of a neutral sounding ‘audit’ of the Fed."

How the hell would that work? In what fashion can they sneak their monetary theories into the Fed via an audit. Monetary theories aren't a secret agent that can somehow infiltrate the Fed and take over.

JWatts you are right - you can't sneak in your monetary theories via an audit. But you can sneak in your monetary theories with the proposed "audit" which is in fact a very different animal from a proper audit.

This proposal is mind-blowingly toxic not just because its going to introduce destructive monetary policy as a way of placating congressional jackasses but also because its abuse of the English language is going to mess up the whole concept of auditing.

What exactly is this 'audit' going to show or examine? The Fed's balance sheet is here, ( I see about $2T in Treasury bonds and $2T in agency bonds (Freddie Mac type bonds). The lending to banks through the discount window amounts to $0.002T and is backed by collateral of a bit over a billion. The Fed's balance sheet is huge but is remarkably plain and simple. Unlike a Wall Street investment firm whose business is crafting complex financial plays, the Fed's purpose is to create money. They need to be able to buy and hold a type of asset that is very simple and has a huge, deep market.

So 'audit' this and make sure the accountants at the Fed properly recorded the correct serial numbers of their Bonds into their database but beyond that what exactly would an audit be looking at?

"Almost no audits are publically disclosed. Individual and company audits by the IRS are private affairs between them and the IRS."

Boonton already failed logic here.

These are not the assets your looking for.

Not only is the audit a dumb idea, we should make any public discussion of the Federal Reserve subject to regulation by the FEC. That oughta help the real-experts be even MORE independent.

There is no good argument against auditing the Fed. That's why it is, in fact, audited "out the wazoo."

There is an excellent argument against idiots like Rand Paul sticking their noses in to politicize the Fed and disguising their intentions by misusing the word "audit."

While talking about what the Fed does in public is a bad idea. do hope for the sake of national security that someone is making sure the Federal Reserve economists are taking extra doses of flouride, corn sugar, ebola vaccines, flu shots and Monsanto brand GMO insecticide corn. Just to make sure they are healthy enough to make correct decisions.

The only list I'm interested in viewing is a list of the most shitty lists that people take seriously.

#5 unless they used twins separated at birth, I can bogus
that is because twins, besides genes share parents and a lot of social/environmental education (and likely have similar academic one as well if not by subject by level) which would likely result in similar attitudes towards money.

It always adds to the discussion when you comment on something without reading it.

Perhaps you should try to put some effort into understanding how MZA/DZA twin studies work before commenting. The entire basis of these studies is that the comparison between the two sets allows us to separate genetic and environmental factors.

I would, if the link wouldn't return a "Our checks indicate that this address may not be valid because: 404 Not Found ( [301 Moved Permanently]--> If this is indeed the case, please notify [email protected] (Anki Helmer)"

As such, I'm left to what the referring article and others I've found online says about the study and those don't really show any convincing discrimination between social and genetics influences. If you could provide for those parts, i'd be grateful, but otherwise, for teh information freely available, still calling bogus.

In fact, genetic identity might mean identical twins process the same way, or in a much similar way than fraternal twins, the social inputs they are given, rather than having a innate genetic tendency to behave the same way towards money.

Be snarky as you wish, you two, that always help, right?

That was an interesting article on Terence Tao. But at least now we know why he is not at Harvard - he married one of his students.

Should Harvard make him a job offer, would they apply their No-Banging-Students policy retrospectively?

It would be a shame because the one thing that article did not talk about but made very clear is the importance of a good - and very traditional by the looks of it - family life. Both to happiness and to the children's welfare.

His parents are lovely and surprisingly normal people and their attitude towards education/life is the opposite of the stereotypical Chinese (tiger mother) approach. It's not surprising that he has a happy and traditional family life.

#4 And then there are orgy primes, a cluster of related sexy cousin primes that stick closely together.

#5 "The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets"

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