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Fed to ban policymakers from owning individual stocks

cnbc.com

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Re: Fed to ban policymakers from owning individual stocks

#191

Post by [deleted] »

xboxnolifes wrote: post #87
fragmede wrote: post #74

Earlier quoted context omitted.

Listen, I know we're all senior developers working at a FAANG, making between $300k-500k/year in total compensation, but $160k/yr is a giant pile of money for many, many Americans. The fact that it's $160k + health insurance plan that qualifies as "really fucking good" makes that $160k far more than the already-above-average Joe's 160k.

I didn't realize GP was using that number too make it sound low. At first I thought the 175k number was an attempt to show how much better paid that position is compared to the rest. The fact that the average position in the source is just under 200k/year and people are reading it as a bad package seems incredibly out of touch.

[deleted]

Re: Fed to ban policymakers from owning individual stocks

#192

Post by brodouevencode »

davidw wrote: post #5
brodouevencode wrote: post #2

Does anyone think the SEC will take similar actions against elected officials? Given there have been plenty of stories about this happening it seems like it should be up for consideration.

I think Congress makes its own rules up there, no? One of my Senators is pushing for an end to trading of individual stocks: https://www.npr.org/2021/09/22/1039565467/many-believe-its-t...

I think you're right after doing some research. Getting Congress to police themselves is going to be a tough haul.

Re: Fed to ban policymakers from owning individual stocks

#193

Post by rsj_hn »

ValentineC wrote: post #190
davesque wrote: post #53

Earlier quoted context omitted.

Yeah, that all seems like a great idea. I'm sure Singapore has its issues, but sometimes I think it's funny how logically other countries seem to approach their problems. It's almost as though they actually want to solve them. In the mean time, in the US, we can't have nice things because reasons. It's sort of like how Japan has toilets with warmed seats. In the US, we don't have that because...honestly I have no ide…

> I'm sure Singapore has its issues, but sometimes I think it's funny how logically other countries seem to approach their problems. Singaporean here. Some of us think that there's a fair bit of legalised "corruption" and cronyism in the public system. :) (For the sake of avoiding any potential defamation suits that Singapore politicians are so famous for, this is entirely my opinion.)

I think there is an inevitable trade off between getting stuff done in a corrupt way, and not being corrupt but being unable to get stuff done.

And I would argue that historically you see this. Saudi Arabia modernized with a lot of corruption. The US modernized with a lot of corruption -- the period of American industrialization and modernization was called "The Gilded Age". Now there are huge bureaucratic processes, checks and balances, all sorts of oversight -- and it's extremely hard to get anything done.

Re: Fed to ban policymakers from owning individual stocks

#194

Post by huitzitziltzin »

zzleeper wrote: post #184
dogman144 wrote: post #36

Have to ask how this wasn't instituted in the first place, excluding the "well it's corruption, obviously" answers. Every single financial job in the private sector has extreme guidelines around this, the Fed is like a buyside firm with ultimate private information access.

It is instituted. I work at the Fed in a relatively junior role. I can't buy bank stock, or for any practical purposes any financial firm stock (or bonds). I can't buy funds finance-focused mutual funds or any kind. I can't buy stocks of any firm where I have any sort of insider trading, such as contractors. Lastly, there's a window around FOMC meetings where anyone with any sort of insider knowledge is prohibited to…

Fellow economist here… I would have thought this rule would be irrelevant to us! I don’t think most of us think we can beat the market. I hold index funds only. (To be clear: I think this rule is a good idea and should apply to anyone with any serious role there. I’m just a little surprised it’s binding on anyone.)

Edit: clicked on your profile. Thanks for writing reghdfe. I use it with some coauthors on a project on healthcare now.

Re: Fed to ban policymakers from owning individual stocks

#196

Post by cwkoss »

I would expect mutual funds are much more correlated than individual stocks to the effects of monetary policy.

Requiring them to trade slowly so they can't game short-term market effects from their day job makes a lot of sense.

I don't fully understand the ban on individual stocks vs mutual funds though. Is that just for ease of oversight? Is ex. tesla more responsive to monetary policy than mutual funds?

Re: Fed to ban policymakers from owning individual stocks

#197

Post by [deleted] »

cwkoss wrote: post #196

I would expect mutual funds are much more correlated than individual stocks to the effects of monetary policy. Requiring them to trade slowly so they can't game short-term market effects from their day job makes a lot of sense. I don't fully understand the ban on individual stocks vs mutual funds though. Is that just for ease of oversight? Is ex. tesla more responsive to monetary policy than mutual funds?

[deleted]

Re: Fed to ban policymakers from owning individual stocks

#198

Post by dragonwriter »

MatmaRex wrote: post #174
jrochkind1 wrote: post #156

If you read past the headline to just the first bullet point, you don't even have to go past there: > The Federal Reserve announced sweeping new rules for its top officials Thursday, banning trading in individual stocks and bonds. The top officials of the Fed. not congress people. The comments thread here is making me wonder if all HN comment threads are made up mostly of posters who haven't read beyond the headline.

You should assume that no one read the article. I certainly did not before coming to read the comments (although I have enough restraint to not comment myself on the substance of it when I do that). For better or worse, the title and the link is just a discussion prompt. The guidelines all but state that you're not expected to read it before commenting: > https://news.ycombinator.com/newsguidelines.html > Please don'…

> The guidelines all but state that you're not expected to read it before commenting:

No, noting that accusations of not reading the article are never positive contributions to the discussion is not even in the neighborhood of advocating not reading the article.

You can even point out that the article addresses a concern, as that is a useful contribution to the discussion.

Re: Fed to ban policymakers from owning individual stocks

#199

Post by thaumasiotes »

dragonwriter wrote: post #198
MatmaRex wrote: post #174

Earlier quoted context omitted.

You should assume that no one read the article. I certainly did not before coming to read the comments (although I have enough restraint to not comment myself on the substance of it when I do that). For better or worse, the title and the link is just a discussion prompt. The guidelines all but state that you're not expected to read it before commenting: > https://news.ycombinator.com/newsguidelines.html > Please don'…

> The guidelines all but state that you're not expected to read it before commenting: No, noting that accusations of not reading the article are never positive contributions to the discussion is not even in the neighborhood of advocating not reading the article. You can even point out that the article addresses a concern, as that is a useful contribution to the discussion.

> noting that accusations of not reading the article are never positive contributions to the discussion is not even in the neighborhood of advocating not reading the article.

That depends on whether you believe that accusations of not reading the article tend to cause people to read the articles.

Re: Fed to ban policymakers from owning individual stocks

#200

Post by zzzzzzzza »

jokethrowaway wrote: post #148
pessimizer wrote: post #110

Earlier quoted context omitted.

This is an example of the "you can pay people not to be corrupt" argument. It relies on people who are both willing to be corrupt, and happy to leave money on the table. It's exactly the same argument as paying for media not to include advertisements. What we should do is stop filtering for trash by having jobs that pay $174K require multi-million dollar application fees (i.e. a campaign.) That's exactly how you woul…

This is not a US only problem, virtually any country is run by a couple of political parties and their friends and they can do pretty much anything with little repercussions. I agree better pay is not the answer. The only reasonable alternative is to reduce their powers (especially reducing the amount of money they can spend and the laws they can impose on people) and spread them to local entities. Decentralisation i…

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