Robert Borosage has an interesting article up today on the upcoming Senate re-confirmation for Ben Bernanke of the Federal Reserve coming up on December 3, 2009.
I have this 'sinking' feeling about what is going to happen during that hearing, and all indications are that 'the jig is up' and hardly anyone, with half a brain actually believes anymore that the 'financial meltdown' and soon thereafter, Great Heist of 2008, was 'an accident' or simply the outcome of the 'perfect storm' that somehow we are all suppose to believe.
That 'meme' in fact either defies all logic, or places complete responsibility at the feet of Ben Bernanke and Alan Greenspan of the Federal Reserve. I am now wondering what kind of questions the Senate will ask of Ben Bernanke, and I welcome your own suggestions.
In addition to being responsible as one of nation's top watchdogs and regulators, the Federal Reserve is also charged with pursuing price stability and maximum employment.
Now we're experiencing the highest levels of unemployment (17 percent is much more accurate than the 'fake' MSM's 10 percent) in over a quarter century, and the dollar is in deep shit. Foreclosures are at an all time high, and one in four mortgage holders owe more than they own.
Bernanke and Geithner et al may may have 'saved' Wall Street and the Bankers from 'themselves' but the very idea that they have in fact 'saved' the nation from a severe depression, and what is now becoming a 'lost decade' of jobless recovery is laughable at best. That is not what is going on here. As Borosage states:
But take another look. In the lead up to the financial crisis, Bernanke was Sancho Panza to Greenspan's Quixote, gleefully touting banking deregulation while blind to the dangers of an $8 trillion dollar housing bubble. He celebrated an economy where incomes of most Americans were declining, household debt was soaring, and inequality reached Gilded Age extremes. Once named Fed Chair, he chose not to exercise the regulatory powers he had to curb predatory lending, police the Wall Street casino, or crack down on the derivatives that Warren Buffett among others warned were financial weapons of mass destruction. Instead he scorned the worriers, and predicted steady growth -- even after the recession began. When the bubble began to burst, Bernanke was late to recognize it, consistently underestimated its impact, and failed repeatedly to get ahead of the crisis.
Forecasting the nations economic outlooks are a very essential part of the Fed's work and actually making predictive assumptions and statements are in fact part of the job description for any Fed chairman. After all, world financial markets depend on these kinds of predictions and can either soar or sour based on the Federal Reserve's take on money matters.
Here are some of the 'predictions and quotes' from Bernanke prior to the greatest transfer of wealth in our nations history:
March 28, 2007: "The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained."
May 17, 2007: "We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."
Feb. 28, 2008, on the potential for bank failures: "Among the largest banks, the capital ratios remain good and I don't expect any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system."
June 9, 2008: "The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."
July 16, 2008: Fannie Mae and Freddie Mac are "adequately capitalized" and "in no danger of failing."
Well, when the 'Levees' broke and the shit hit the fan, these statements by Mr. Bernanke show an individual who is either too arrogant and ignorant to hold on to the position of Federal Reserve Chairman, too complicit with Wall Street and the Bankers to ever be trusted again, or knew exactly what was going on around him, and let it happen anyway. I happen to believe that it was the latter, but more about that later....
The big question is: how exactly is the Senate going to 'spin the day'....helping 'Helicopter Ben' out to 'cover up' the greatest controlled fraud and epic thievery our nation has ever known? This is going to be very interesting at best and again as Borosage states:
It is simply inconceivable that in a constitutional Republic, the Federal Reserve can commit trillions of dollars to private companies with no vote of the Congress, no review, no audit, no accountability. How can the Senate even judge whether Bernanke merits reappointment without being able to look at his books? That would be like promoting someone with a four year hole in his resume during which he secretly committed a good portion of the company's capital. Are the Senators supposed to vote for Bernanke simply because Wall Street's bankers are pricing yachts again?
The problem of course is, that 'we' Democrats are heading into an election and the absolute 'outrage and fury' towards Wall Street with their continued 'billion dollar bonuses' and record profits - 'the people' (with over 15.5 million people out of work, many of whom are victims of foreclosures and the same having lost their savings, retirement and pension funds due to the 'financial meltdown') are waiting (pitchforks in hand) to see what repercussions (if any) the Senate will demand of Ben Bernanke.
That is what you call between a 'rock and a hard place.' This will be a very 'stark' test of the Senate and it may be a case of 'too little, too late' for Ben Bernanke:
It was only when he finally woke up to the spreading panic that Bernanke threw literally trillions into bailing out the banks -- but without restructuring them, without replacing many of the folks that caused the mess, without requiring that they lend to Main Street or renegotiate mortgages. Bernanke and Treasury Secretaries Hank Paulson and Tim Geithner were the creative architects of a bailout that has resulted in a far more concentrated financial sector, with major financial houses enjoying an explicit guarantee that they are too big to fail, even as they reopen the casino, start up the same games again, and mobilize to fend off any serious regulatory reform.
And that is where the problem is:
Even as they reopen the casino, start up the same games again, and mobilize to fend off any serious regulatory reform.
And that of course is the problem. To date there has been no contrition, unless you consider the 'fake' apology and admission of guilt by Lloyd Blankfein, CEO of Goldman Sachs:
"Certainly, our industry is responsible for things. We’re a leader in our industry, and we participated in things that were clearly wrong and we have reasons to regret and apologize for."
So said Lloyd Blankfein, chairman and chief executive of Goldman Sachs, last week.
You remember Goldman Sachs. They’re the Wall Street investment giant that roared back from the precipice of financial disaster earlier this year to report a 70 percent boost in earnings.
Not only has there not been any accountability or responsibility taken on the part of Ben Bernanke of the Federal Reserve, or Wall Street and the Banks, instead of showing any gratitude towards the American public for 'bailing' them out of their mess, what they have done is 'not skipped a beat' and are simply returning to their old ways without blinking an eye. That is where the real 'fury and outrage' comes from. The Banks are 'gouging' their customers in blatant usury and fees to try to make up for all the 'liar loans' and toxic debt they are still carrying, and when the former Federal Reserve Board Chairman, Paul Volcker was recently interviewed by an Italian Newspaper 'dissing' Timothy Geithner, you know 'things just ain't right in River City'...
Paul Volcker: Geithner Is Surrounded by Private Advisors
September 11, 2009 — On the eve of the anniversary of the Lehman Brothers crash, Paul Volcker is interviewed by the Italian financial daily Il Sole 24 Ore. Volcker reiterates his proposal for a return to Glass-Steagall type regulation, and hints that Treasury Secretary Tim Geithner is under the control of Wall Street.
"The influence of money and lobbies on Washington has reached a shameful level. Not to mention the fact that, since many Treasury nominees have not been confirmed by Congress, Geithner is surrounded by private advisors. Eight months into the new administration, the Treasury does not yet have a staff of [its own] officials. And this raises the question of using informal advisors who come from Wall Street. It should not happen."
On his proposals to reform the system, Volcker says:
"Banks should be treated differently from other financial institutions, and their activities should be limited. Banks should not own hedge funds or stock funds, and their trading activities should be limited. An institution that produces most of its income through trading should not have a banking license. If it wants to make trades, that's OK, but not as a bank, because banks have particular protections that should not be extended to everyone."
What are the obstacles to such a reform?
"There are a lot of people who make a lot of money in finance, and want to keep doing it."
http://www.nuwireinvestor.com/...
That is a good question: What are the obstacles to such reform? And of course Mr. Volcker answer is at the heart and soul of why the Senate or the American people should trust our current 'financial systems' or Ben Bernanke to protect the nation's money based on where it has led us to date. After all, Bernanke and Geithner are certainly not accepting responsibility, nor are they even 'pretending' to curtail the continued 'endless gambling casino and risky credit derivative swaps' that 'drove us off the cliff' in the first place.
Bernanke argues that auditing the Fed's books would represent a "takeover of monetary policy." Since the Fed is supposed to be the sober chaperone that "takes away the punch bowl when the party gets overheated," its independence is highly valued. But Greenspan and Bernanke's Federal Reserve not only didn't take away the punch bowl, it spiked the punch and joined the party. And then in the crisis, Bernanke took the Fed far beyond monetary policy in bailing out private sector companies -- big banks, insurance companies and the like. This may have been heroic, but it can't remain secret. Congress would be utterly irresponsible if it didn't demand an accounting on who got what and why.
http://www.huffingtonpost.com/...
And this is where I completely disagree with Mr. Borosage when he states that 'This may have been heroic.'
There is nothing 'heroic' at all when you take a good look at how and why the 'financial meltdown' happened. And as I stated earlier in this diary, I will never believe that this was an accident, and that Ben Bernanke was 'shocked' to have seen it coming. That simply defies all logic. It does not add up when you follow the money and evidence.
Remember a few weeks ago when Ben Bernanke was 'blaming the Banks' for not lending money? Yeah, that was bullshit too. Take a look at what is really going on (as always behind the scenes so that Americans will not get hip to the clusterfuck that 'Helicopter Ben' is in charge of...)
Truth is, Ben Bernanke is telling the Banks, NOT to lend money:
Indeed, the failure of the Administration to take bold moves early in the year now cripples it in any attempt to take bold action now. Apparently, the best we can expect now is a "Cash for Caulkers" program that will dribble money into the economy, ensuring that we do little if any better than limp along.
Likewise, monetary policymakers too are caught in the headlights. As has already been widely noted, the minutes of the most recent FOMC meeting reiterated the Fed's eagerness to reverse, not extend, policy:
...Overall, many participants viewed the risks to their inflation outlooks over the next few quarters as being roughly balanced. Some saw the risks as tilted to the downside in the near term, reflecting the quite elevated level of economic slack and the possibility that inflation expectations could begin to decline in response to the low level of actual inflation. But others felt that risks were tilted to the upside over a longer horizon, because of the possibility that inflation expectations could rise as a result of the public's concerns about extraordinary monetary policy stimulus and large federal budget deficits. Moreover, these participants noted that banks might seek to reduce appreciably their excess reserves as the economy improves by purchasing securities or by easing credit standards and expanding their lending substantially. Such a development, if not offset by Federal Reserve actions, could give additional impetus to spending and, potentially, to actual and expected inflation. To keep inflation expectations anchored, all participants agreed that it was important for policy to be responsive to changes in the economic outlook and for the Federal Reserve to continue to clearly communicate its ability and intent to begin withdrawing monetary policy accommodation at the appropriate time and pace.
Read that carefully and realize this: An apparently not insignificant portion of the FOMC believes that there is a terrible risk that banks loosen their credit standards and increase lending at a time when, even if the economy posts expected gain, unemployment remains at unacceptably high levels. Silly me, I thought increased lending was the whole point of the exercise to lower interest and expand the balance sheet. That whole credit channel thing. If not to expand lending during a credit crunch, then what else are they expecting?
I am in shock that this sentence made it into the minutes. One can only conclude that a significant portion of policymakers are simply clueless. Or, more disconcerting, they have lost all faith in the ability of financial institutions to channel capital into activities with any hope of financial returns. Has the Fed now embraced the view that they manage the economy through little else then fueling and extinguishing bubbles?
http://economistsview.typepad.com/...
That last sentence: Has the Fed now embraced the view that they manage the economy through little else then fueling and extinguishing bubbles? actually describes what the Federal Reserve has always done. Only now what has happened is that Ben Bernanke has 'overextended himself' and the deep corruption of our 'financial markets' is now standing with their pants down around their 'collective knees.' Ben Bernanke is looking like a deer in the headlights of an oncoming 10 ton Mack Truck. Truth is, these friggin idiots 'got caught' and everyone knows in the financial sectors and most especially on the entire netroots nation knowns it.
Over the past three years in my own research and reading people like: Jim Jubak, Matt Tabbi, William K. Black, Gretchen Morgenson, Nomi Prins, Dean Baker, Thomas Palley and Tim Duy and many other financial experts, I have come to the conclusion that the 'financial meltdown' was anything but an accident, and all of the above individuals agree on the same central premise behind what really happened.
What was really going on behind the scenes was a 'Heist' and a simple 'elimination of the competition.'
I have to agree with Larry Rubinoff, who I believe has the 'real reason' for what was going on behind the scenes:
I have always believed that the economic crisis that began with the so called mortgage meltdown was a pre planned event. I now believe that the planner was Goldman Sachs. I could never understand how the meltdown occurred almost overnight. Markets just don't react to that extent that quickly. What drove the mortgage market was the securitization process which was driven by the bottomless pit of investors of all shapes and sizes world wide. As an insider in the mortgage industry, what I saw was that almost overnight that endless pit of worldwide investors disappeared. I said then and I say now, "who turned off the tap?"
Further more, Merrill Lynch, Bear Stearns and Lehman Brothers were the kingpins of mortgage backed securities and Goldman Sachs insured their MBS against failure with a little help and participation from AIG. All of them, I believe, were working in concert with then Treasury Secretary Paulson (former CEO of GS) and then Federal Reserve Bank of New York (FRENY) President, Timothy Geithner (current Treasury Secretary). Both played on the same team yet they wear different color uniforms - red and blue. It becomes even more apparent when you consider that the only surviving and prospering entity is Goldman Sachs. Paulson and Geithner orchestrated the demise of Merrill and reportedly forced Bank of America to acquire them. Of course ML's stockholders got wiped out in the process. They very specifically negotiated the demise of Bear Stearns by providing $55 billion to JP Morgan who in turn purchased Bear Stearns for $250 million, less then the market value of the Bear Stearns headquarters building. You should find it interesting also that the most prominent member of the board of FRENY is Jamie Dimon, CEO and Chairman of JP Morgan/Chase. Then the demise of Lehman Brothers, a long time and hated rival of Goldman Sachs. They were simply allowed to fail and go away. Why? I suppose it is because they just did not want them around anymore in any way, shape, manor or form. Their arch rivals - gone.
If we are a country being held hostage by one of our own domestic corporations it would sound to me like this would be a treasonous act. One that should be investigated as any other person, group or government which causes harm to the United States. Our President and our Congress are constitutionally obligated to protect us. But they are not. Does that mean that Goldman Sachs tentacles reach into the White House and Congress? It seems so as I said earlier, their influence was evident throughout different administrations and different controlling political parties. The dots are connecting. Goldman's apologies, lame efforts to offer up some money to small business and comments about being one of gods angels become comical if you look at the picture developing from connecting the dots.
http://www.themortgagecorner.blogspo...
BTW, spare me the 'conspiracy theory' crap. This information is the opinion of so many respected financial people out there that its become 'common knowledge'....jeesumcrow, all anyone has to do is follow the damn time line and money. It's not quantum physics folks.
Mr. Borosage had a list of questions that he offers up to the Senate to ask Ben Bernanke on December 3rd, and there is another list of questions that I found interesting at this website:
http://cunningrealist.blogspot.com/
I welcome your own comments and perhaps 'questions' that you might want to put forward to send to your own Senators to ask Ben Bernanke at the Federal Reserve on December 3rd.
But, I just have one question that I would like to ask Mr. Bernanke, and that would be this one:
'Mr. Bernanke, could you please explain to the 15.5 million Americans who have lost their jobs, their homes and their retirement funds how in the hell did you actually ever think that you and your 'pals' on Wall Street were really going to get away with this?'
And then I would throw a pie in his face.
Thanks for your comments.