Ben Bernanke Is Creating A Disaster Once Again With Obama’s Blessing
The “Black Swan” is a theory popularized by Nicholas Taleb that says that unpredictable financial stress periodically hits the financial markets and wipes out Wall Street institutions that use models that claim that such events are so rare that they do not need to worry about them.
In the summer of 2008 Taleb wrote an article saying that Fannie Mae and Freddie Mac were on the verge of total collapse and so was the entire banking system.
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It was at this moment in time that a reporter asked Ben Bernanke about Taleb and the “Black swan.” Bernanke’s reaction got caught on camera as you can see in the above video clip.
He laughs and says he doesn’t read Taleb.
Bernanke’s own policies created the financial bubbles that led to the 2008 crash. And he laughed.
It should be obvious to anyone who is sentient that this diatribe is filled with rightwing kookery such as these later gems:
Paul Krugman had claimed that Obama and Bernanke have been heroes of the economy and the crisis is over.
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[People] are being told by people like Paul Krugman that government debt doesn’t matter
Equating Paul Krugman with Reagan and Laffer is almost as absurd as blaming Ben Bernanke for the planetary economic disaster created by the bankers.
The heroes of the article are the rightwing loons that don’t give a hang about disaster that has befallen the working class, the aged, the young and very young and the disabled while the very wealthy have profited enormously – even more than Obama and his minions, who would make those at the bottom pay for the sins of the robber barons.
Given all that, there is a very valuable point here IMO.
The distortions in the economy being wildly expanded by reliance on monetary policy to repair damage exacerbated by austerity is reminiscent of Carter’s economic foppery that gave us the Misery Index while the usual indicators of economic health looked dandy.
So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers? [..]
Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail. [..]
The top five banks — JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc [..] with almost $9 trillion in assets, more than half the size of the U.S. economy — would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.
It is outrageous that Americans are being bludgeoned with $85 billion in austerity cuts that will most likely halt any recovery while handing banking shareholders an $83 billion gift.
Warren quizzed Bernanke on that study. “I understand that we’re all trying to get to the end of too big to fail, but my question, Mr. Chairman, is until we do, should those biggest financial institutions be repaying the American taxpayer that $83 billion subsidy that they’re getting?”
Bernanke responded, “The subsidy is coming because of market expectations that the government would bail out these firms if they failed. Those expectations are incorrect.”
After some back and forth, Warren countered, “$83 billion says there really will be a bailout for the largest institutions.”
“That’s the expectation of markets. But that doesn’t mean we have to do it,” Bernanke responded.
Warren insisted that the large banks should pay for the subsidy. “Ordinary folks pay for homeowners’ insurance, ordinary folks pay for car insurance, and these big financial institutions are getting cheaper borrowing to the tune of $83 billion in a single year simply because people believe that the government would step in and bail them out. I’m just saying, if they’re getting it, why shouldn’t they pay for it?” she said.
“I think we should get rid of it,” Bernanke said. He said he agreed with her that government should address the problem of “too big to fail.”
Even worse is Blankfein’s insistence on bashing programs that are critical to middle class Americans. It’s the Blankfeins of the world that want to take your Medicare and Social Security away. God forbid we ran out of money and there weren’t any left to bail out the banks next time, right?
Then there’s my other favorite bankster, good old Jamie Dimon of JPMorgan. Dimon is the delightful fellow who ignored the warnings and ended up costing the bank, and our taxpayers, billions.
The major bank chiefs have been quite vocal about trashing the social system, just as they trashed our economy. But when it comes to helping Americans, the banks have little interest beyond their next bailout.
Mayo: I think what I hear UBS saying in the presentation is that if I’m an affluent customer I’ll feel a lot better going to UBS if they have 13.5 (percent) capital ratio than another big bank with a 10 percent ratio. Do you agree with that?
Dimon: You would go to UBS and not JPMorgan?
Mayo: I didn’t say that. That’s their argument.
Dimon: That’s why I’m richer than you. [..]
FDL New Desk‘s DSWright found Dimon’s response arrogant but indicative of something even more offensive:
Dimon is right, he did get rich having low capital ratios – which is why his form of banking is dangerous. It’s the precise reason the banks could not protect themselves during the crisis, they were over-leveraged.
“The real issue isn’t who is rich, but rather whose interests are being fairly served and whose aren’t. Dimon’s approach gives short shrift to both shareholders and taxpayers. Taxpayers still carry substantial risks for which they are not being compensated, a state that will only change when regulations are tightened, and hopefully vastly simplified.
Shareholders do badly because the kind of bank Dimon runs is prone to loss and volatility, leading markets to set a low value on the bank’s earnings.”
Mathematician Albert Einstein said that doing the same thing over and over expecting different results was the definition of insanity. Continuing to bail out these banks on tax payer’s “dime” when there is no evidence that breaking them up would harm the economy is just insane.
“Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant,” Bernanke told his students, who included a number of right-wing Republican diehards, such as Senator Bob Corker, of Tennessee, and Patrick Toomey, of Pennsylvania. “Moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run.”
Translated from Fed-speak, that meant that congressional Republicans have got things upside down. Bernanke has warned before about the dangers of excessive short-term spending cuts. But this was his most blunt assertion yet that Mitch McConnell, John Boehner, et al. should change course. “To address both the near- and longer-term issues, the Congress and the Administration should consider replacing the sharp, frontloaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the near term but more substantially in the longer run,” Bernanke said. “Such an approach could lessen the near-term fiscal headwinds facing the recovery while more effectively addressing the longer-term imbalances in the federal budget.”
Here is Ezra’s translation of Chairman Bernanke’s “Yoda Speak”:
The Dow Jones industrial average finished the day down 1.8 percent, or 243.36 points, to end at 13,102.53, its worst performance since June. The losses added to the big declines on Friday, and dropped leading indexes to their lowest levels since early September, before the Federal Reserve announced its latest monetary stimulus program.
Since the Standard & Poor’s 500 index hit this year’s high of 1,465.77 on Sept. 14, the benchmark index has fallen 3.6 percent. It finished Tuesday down 1.4 percent, or 20.71 points, to 1,413.11.
Share futures were falling even before the opening bell because of disappointing financial results from American companies. The chemical maker DuPont said Tuesday morning that its revenue was down 9 percent in the third quarter from a year ago, and that it would eliminate 1,500 jobs. The company’s stock ended down 9.1 percent.
Thomson Reuters said Tuesday that 63 percent of the companies that have reported earnings so far have given revenue figures for the third quarter that were lower than what analysts expected.
The stock market is freaking out like Bill Paxton’s panicky marine in “Aliens,” yelling “Game over, man! Game over!” All because it’s afraid of losing Ben Bernanke.
Late in the trading day on Tuesday, the Dow Jones Industrial Average was down more than 200 points, on track for its worst one-day loss since June. What had it in such a tizzy? There were lots of good reasons — third-quarter corporate earnings have been kind of awful, and Europe’s endless debt crisis continues.
Of course the idea that Bernanke might be leaving should shock nobody, really. After eight years of riding herd on the worst economic crisis since the Great Depression, all the while being accused of treason and threatened with old-fashioned Texas lynchings, did anybody really expect that Ben would want another four years of this?
Apparently so. The market indeed seems shocked and horrified by the idea that it will no longer be able to depend on what’s come to be known as the “Bernanke Put” — the implied promise that Bernanke won’t let the stock market fall too far before riding to the rescue with another helicopter-load of money.
Sounds like a combination of the continued recession at the bottom of the economic stratus is trickling up to the top, at last, and the poor dears on Wall St. are concerned that they’re losing their “sugar daddy”. Tell me again why they hate Obama?
That is the reality of the US economy and it does not bode well for a sustainable recovery, not without a boost from the government. Nobel Economist Joseph E. Stiglitz writes that “the labor market is a shambles” and it’s not going to improve anytime soon without a boost from the government:
Let’s assume that job creation continues at the rate of 225,000 jobs a month. That is only about 100,000 beyond the number required to provide jobs for the average monthly number of new entrants into the labour force. At that pace, it would take 150 months to reach full employment – 13 years, some time around 2025. The independent Congressional Budget Office is more optimistic, forecasting the return of full employment by 2018. [..]
Before the crisis, 40 per cent of all investment was in property. We had a housing bubble that left a legacy of excess capacity. Continuing weakness in the property sector is reflected in high foreclosure rates and low home prices. [..]
Finally, US states and local governments are constrained, to a large extent, by having to balance their budgets. They depend heavily on property taxes, so both revenues and expenditures have plummeted. This is why there are a million fewer public employees than before the crisis. Government as a whole is being procyclical, not countercyclical. [..]
Unfortunately, little has been done about the underlying structural problems. Indeed, the downturn, during which wages have not kept pace with inflation, has in many ways made US inequality worse.
Today the American economy faces three big risks. First, a steeper European downturn, as a result of the excessive austerity and the euro crisis. Second, complacency that the economy will recover quickly without government support. Though every downturn comes to an end, that should not be of much comfort. Third, that we accept that an unemployment rate above 7 per cent is inevitable.
If my Cassandra forecast turns out to be wrong, stimulus can be cut. But if it turns out to be right, and we do too little, we will live to regret it.
We need Congress and the President to stop listening to “Washington Consensus” and the “main stream” economists that are preaching “austerity” that will only prolong the economic decline and increase poverty.
One of the architects of the audit of the Federal Reserve was former Rep. Alan Grayson (D-FL) who is running for his old house seat. He appeared with Keith Olbermann to discuss the Bloomberg report on the secret no strings, 0% interest $7.7 trillion had out to the banks that they also reaped another $13 billion in profits. As Rep. Grayson points out it is far worse than even the Bloomberg report.
So what does the Obama administration have to say about this? Apparently not a lot. The president is too busy raising campaign money from those who benefited most from this bailout. Obama’s minions on Twitter and in so-called “progressive” blogs have rushed in to defend him against any appearance that he sides with the banks. They ignore the history of the president’s part in the dilution of the Dodd/Frank regulations which has yet to take affect. So here is a brief refresher to keep this based in reality.
Way back at the beginning of Barack Obama’s administration and in the aftermath of the 2008 Wall St/Banking meltdown, financial reform had strong bipartisan support. The original Dodd-Frank Bill contained a provision for regular audits to the end the secrecy of the Federal Reserve. It was introduced in the House by Rep. Alan Grayson (D-FL) and Rep, Ron Paul (R-TX) with strong support from on the Senate side from Sen. Bernie Sanders (I-VT) and Sen. Jim DeMint (R-SC). However, the amendment was opposed by not only Wall St. and the Federal Reserve, it was also opposed by the Obama administration so strenuously that Obama threatened to veto the entire Dodd/Frank bill if the audit was included. That amendment failed and a second one was crafted for the one time audit which was just as adamantly opposed by Obama and company.
Possibly today, but if not today then soon, the Senate will decide whether or not to follow the House’s lead and adopt a provision requiring government auditors to open up the books at the Federal Reserve. The measure enjoys a great deal of popularity on both the left and the right, but is so fiercely opposed by powerful interests that it could nonetheless become a stumbling block in the way of financial regulatory legislation.
Right now Sen. Bernie Sanders (I-VT) is trying to round up 60 or more votes to overcome a likely filibuster and include an “audit the Fed” provision in the Senate’s bill. There are just a few small obstacles: the White House, major financial institutions, and the Fed itself. Their resistance is fierce–but the measure is so popular that killing it will be difficult for them and that, in their eyes, threatens to put a grenade at the center of efforts to to tighten the rules on Wall Street. [..]
That’s why, according to the Wall Street Journal they’ll “fight to stop it at all costs.” The White House is hoping to cut off “audit the Fed” in the Senate, so that they’ll have a stronger hand when House and Senate negotiators meet to iron out the differences between their regulatory reform bills. If the Senate bill does not include Sanders’ amendment, then the House will be in a weak position vis-a-vis the Senate and White House and the provision could be easily stripped.
If Sanders prevails, then the White House will be all but out of options and President Obama will likely be left with the choice of vetoing the legislation, or signing it and raising the ire of very powerful people. Stay tuned.
Sanders’ amendment for a one time only audit prevailed and was conducted this past year that has revealed a massive handout to banks. We now know why the Federal Reserve and the banks didn’t want this audit. The question now is what is going to be done to prevent the Federal Reserve from dong this again. It’s fairly obvious what the president’s policy is, he sides with Wall St and the banks, the 1%.
As if we didn’t know that they were all lying through their teeth on the extent of the bank bail out in late 2008, we’ve just never been sure of the price tag of all those lies. Now due to the dogged diligence of Bloomberg News, we have a better picture if what was handed out to the banks with no strings, $7.77 TRILLION. TARP, a mere $750 billion, was just 2% of that and who could forget the squawking from Congress that went on about that paltry sum.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse. [..]
The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.
“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”
Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.
As expected, Obama’s Treasury Secretary, Timothy Geithner, one of the chief architects of this hand out, fought limiting the size of banks. David Dayen at FDL points this out from the article:
On May 4, 2010, Geithner visited (former Sen. Ted) Kaufman in his Capitol Hill office. As president of the New York Fed in 2007 and 2008, Geithner helped design and run the central bank’s lending programs. The New York Fed supervised four of the six biggest U.S. banks and, during the credit crunch, put together a daily confidential report on Wall Street’s financial condition. Geithner was copied on these reports, based on a sampling of e- mails released by the Financial Crisis Inquiry Commission.
At the meeting with Kaufman, Geithner argued that the issue of limiting bank size (Kaufman and Brown were working on a simple bill to cap bank size) was too complex for Congress and that people who know the markets should handle these decisions, Kaufman says. According to Kaufman, Geithner said he preferred that bank supervisors from around the world, meeting in Basel, Switzerland, make rules increasing the amount of money banks need to hold in reserve. Passing laws in the U.S. would undercut his efforts in Basel, Geithner said, according to Kaufman.
I get really offended by the bogus accounting, such as the “banks paid back the TARP” or “the Fed lost no money on its lending facilities,” which this story annoyingly has to repeat out of adherence to journalistic convention. This is all three card Monte. So what if the banks paid back loans when the central bank has goosed asset prices vis super low interest rates? That’s a massive tax on savers. And we have the hidden subsidy of underpriced bank rescue insurance. Ed Kane estimates that’s worth $300 billion a year for US banks; Andrew Haldane of the Bank of England has pencilled the annual cost as exceeding the market cap of big banks (and that was in 2010, when their stock prices were higher than now).
The Fed is most assuredly going to have losses. It hoovered up a ton of Treasuries and MBS to shore up asset prices at time when interest rates were already low. The central bank intends to sell them when interest rates rise, to soak up liquidity. Buying when interest rates are low and selling when rates are high guarantees losses. As an old Wall Street saying goes, it’s easy to manipulate markets, but hard to make money from it.
This would not have happened if Glass-Steagall had still been in place. If these details had been known, they would have gone a long way into reinstitution of that law which, for most of the last century, separated customer deposits from the riskier practices of investment banking.
It is long past time that both Ben Bernanke and Timothy Geithner resign. If they don’t do so voluntarily, President Obama should demand they do. I won’t hold my breath.
BTW, so far this morning, not a peep from the traditional MSM about this revelation.
What was revealed in the audit was startling: $16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.
In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.
Angry? Check out page 131 of the GAO Audit to see the actual amounts that each institution received.
Senator Bernie Sanders released his report on Friday and appeared with Dylan Ratigan to discuss the problems and conflicts within the Fed.
WASHINGTON, Oct. 19 – A new audit of the Federal Reserve released today detailed widespread conflicts of interest involving directors of its regional banks.
“The most powerful entity in the United States is riddled with conflicts of interest,” Sen. Bernie Sanders (I-Vt.) said after reviewing the Government Accountability Office report. The study required by a Sanders Amendment to last year’s Wall Street reform law examined Fed practices never before subjected to such independent, expert scrutiny.
The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves. “Clearly it is unacceptable for so few people to wield so much unchecked power,” Sanders said. “Not only do they run the banks, they run the institutions that regulate the banks.”
Sanders said he will work with leading economists to develop legislation to restructure the Fed and bar the banking industry from picking Fed directors. “This is exactly the kind of outrageous behavior by the big banks and Wall Street that is infuriating so many Americans,” Sanders said.
The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose “reputational risks” to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates “an appearance of a conflict of interest,” the report added.
The 108-page report found that at least 18 specific current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.
In the dry and understated language of auditors, the report noted that there are no restrictions in Fed rules on directors communicating concerns about their respective banks to the staff of the Federal Reserve. It also said many directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. The rules, which the Fed has kept secret, let directors tied to banks participate in decisions involving how much interest to charge financial institutions and how much credit to provide healthy banks and institutions in “hazardous” condition. Even when situations arise that run afoul of Fed’s conflict rules and waivers are granted, the GAO said the waivers are kept hidden from the public.
The report by the non-partisan research arm of Congress did not name but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest, including:
Stephen Friedman In 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap Fed loans. During the same period, Friedman, chairman of the New York Fed, sat on the Goldman Sachs board of directors and owned Goldman stock, something the Fed’s rules prohibited. He received a waiver in late 2008 that was not made public. After Friedman received the waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009 unbeknownst to the Fed, according to the GAO.
Jeffrey Immelt The Federal Reserve Bank of New York consulted with General Electric on the creation of the Commercial Paper Funding Facility. The Fed later provided $16 billion in financing for GE under the emergency lending program while Immelt, GE’s CEO, served as a director on the board of the Federal Reserve Bank of New York.
Jamie Dimon The CEO of JP Morgan Chase served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and was used by the Fed as a clearing bank for the Fed’s emergency lending programs. In 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns.At the time, Dimon persuaded the Fed to provide JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. He also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank.
Lets not forget who President Obama chose to replace Rahm Emanuel, Bill Daley, son of legendary Chicago Mayor Richard J. Daley (D) and brother of the more recent Mayor Richard M. Daley (D). Oh, I forgot, Geithner is also the architect of Bill Clinton’s NAFTA Agreement that Obama promised to fix and Midwest Chairman of JPMorgan Chase.
Then there is our Treasury Secretary, Tim Geithner, a protégé of Lawrence Summers and Robert Rubin, who while president of the Federal Reserve Bank of New York, played a large role in directing the Federal Government’s spending on the late-2000s financial crisis, including allocation of $350 billion of funds from the Troubled Asset Relief Program enacted during the previous administration.
None of these people should be allowed anywhere near either the Federal Reserve or the Treasury. Most of them should be in jail.
Nation Realizes Money Just A Symbolic, Mutually Shared Illusion
WASHINGTON-The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.
What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world’s largest economy.
“Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…” said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. “You know what? It doesn’t matter. None of this-this so-called ‘money’-really matters at all.”
“It’s just an illusion,” a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. “Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless.”
According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch (R-UT) finally shouted out, “Oh my God, he’s right. It’s all a mirage. All of it-the money, our whole economy-it’s all a lie!”
Dallas Fed chief calls for breakup of ‘too big to fail’ banks in New York speech
BRENDAN CASE, The Dallas Morning News – March 4, 2010
Federal Reserve Bank of Dallas President Richard Fisher traveled to New York to trumpet a message he’s told Texas audiences before: Banks that are too big to fail are too big to exist in the first place.
Speaking Wednesday at the Council on Foreign Relations, Fisher said big, systemically important banks should be dismantled before regulators have to deal with another crisis like the one that nearly brought down Wall Street and the rest of the U.S. financial system in late 2008.
“The dangers posed by too-big-to-fail banks are too great,” he said.
Fed Chairman Ben Bernanke and others have said Congress should pass a law giving regulators “resolution authority” to close down failing financial companies.
As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion
February 16, 2010
WASHINGTON-The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.
What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world’s largest economy.
“Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…” said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. “You know what? It doesn’t matter. None of this-this so-called ‘money’-really matters at all.”
“It’s just an illusion,” a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. “Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless.”
According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch (R-UT) finally shouted out, “Oh my God, he’s right. It’s all a mirage. All of it-the money, our whole economy-it’s all a lie!”
NEW YORK (CNNMoney.com) — New York Attorney General Andrew Cuomo said Thursday it was bringing civil charges against senior Bank of America executives, including former company CEO Ken Lewis, for their role in the company’s controversial purchase of Merrill Lynch…
…The lawsuit contends that the bank’s management team understated the losses at Merrill in order to get shareholders to approve the deal, then subsequently overstated the firm’s willingness to terminate the merger to regulators weeks later in order to get $20 billion of additional aid from the federal government.
Anyone know why they are not bringing criminal charges? ‘Cause I’d like to see some people go to jail. Is it that bringing criminal charges against rich people is gauche? Or something else? Oh, wells. The important thing is that it’s a friggn’ indictment of high-level wrong-doing.
