Mr. Market to Bernanke– STOP LYING
By Daniel at 21 October, 2008, 8:26 am
What a freak show we had in Congress this morning with Bernanke and then Paulson’s “wham-bam-screw-you-taxpayer” speech.
Let’s start with Bernanke’s “testimony”.
How many times was he asked a specific question - in his professionally-claimed role as an economist - that he refused to answer?
And for each refused answer, the DOW fell 25 points.
When asked why Countrywide “the primary dealer” was allowed to continue while Countrywide “the home loan folks” were allegedly ripping people off and writing loans that were allegedly fraudulent, Ben sidestepped the question with a claim that they’re “not the same company.”
Uh, Ben. Both firms owned by the same holding company = same firm. Sorry. Both are under the same umbrella, both are wholly-owned subs, and that sort of c*** won’t wash with the market or America any more.
Bluntly, you were skewered and exposed as head of The Fed who knowingly and willingly let Countrywide deal with you as a primary dealer while their mortgage lending arm was robbing America blind.
The other ugly was your refusal to address the fact that these banks that are being “helped” have put $70 billion of this money toward bonus pools - all discretionary pay - which means that about 1/3rd of the funds supposedly-loaned will in fact go straight into the pocketbooks of the employees of these firms. “Increase lending”? Bull.
Regulatory discipline by The Fed, and by extension, you? Zero.
Protection of the American Taxpayer (and homeowner) under your watch? Zero.
Willingness to rip off America to the tune of several trillion dollars in phantom “house price appreciation”, with The Fed urging Americans to take out ARMs and otherwise impoverish themselves, then demanding that Congress bail out you and your friends when the predictable consequences of those exhortations come home to roost? Absolute.
Your culpability? Total.
Thanks for the admission, and I hope you have a spare pair of underwear at your office. It looked like you needed them.
Unintended consequences of your interference? Many. Like, for example, the fact that Fannie and Freddie’s spreads continue to blow out, which means that mortgage rates are going north while you continue to claim that this bailout is for “Main Street.”
Tell that to home buyers who are faced with rapidly rising mortgage interest rates.
The talking heads on CNBC are all over the field this morning saying that we’re in “better shape now than before.”
Oh really? Look at the national debt lately? What happens when Congress keeps being goaded by you (Bernanke and others) to keep cutting checks they don’t have the money to cash, forcing more borrowing, ultimately throwing Treasury borrowing costs to the moon and forcing either extraordinarily severe austerity measures on our government or worse, a US Sovereign default?
Impossible?
Uh uh.
Don’t you believe that for a second.
Again - $2 billion a day is required from foreign creditors just to keep us afloat. Take that away for any reason whatsoever and an instantaneous $800 billion dollar hole appears in our federal budget.
Current estimates for FY08 (now) are that we will run well north of $1 trillion in budget deficit. FY09’s estimates are now north of $2 trillion (!) from some sources, and nobody has a credible estimate under $1 trillion.
The total Federal Budget is $3 trillion annually.
Think this one through folks. We will obtain from new borrowing and foreign money about 2/3rds of our total Federal Budget in FY08, which is up from about 30% in FY07, or a clean double. In FY09 our total borrowing and external funding will be equal to all federal expenditures by current estimates.
God Help Us if anything goes wrong with either of those processes; this is rapidly rising into “supercritical” territory in that any disruption is likely to lead to an immediate and catastrophic sequence of events in the capital markets, up to and including a federal government funding collapse.
Paulson, for his part, dissembled as well.
In fact I believe he lied outright - he implied that the 9 banks that “took the money” were volunteers. Uh, no Hank. We have multiple credible media reports that the CEOs were essentially locked in the Treasury building and told to sign up, and that not all of them were willing participants. Does Treasury have to literally use guns to exercise force?
I think not.
Will there be full disclosure? Nope - Treasury won’t tell us if a bank is denied access to their TARP. And while he continues to say that this will “permit banks to continue lending that will support our economy”, not one word was said about the fact that $70 billion of the $250 already committed is apparently going to pay bonuses, nor is there any legal or other guarantee that any of this capital will be loaned out.
In short: Stop lying Hank and Ben.
The market is tired of this c*** and so are The American People. We’ve had it with the incessant fraud, lying, concealment, self-dealing and failed policies, all of which you have created, fostered, supported, and in the case of Paulson, cleared $500 million in personal profit from.
You will not get trust to return to the financial system as a whole nor will investors return to the market until we have the truth from everyone involved, including you, on what has happened along with who is responsible.
Those individuals, agencies and organizations must take responsibility for their malfeasance and misfeasance.
We the people want to see those institutions responsible cut off from federal assistance, whether it be the discount window, the alphabet soup or your new TARP.
We want to see perp walks - lots of them - maybe even including YOU Hank for your part in creating this mess, and we want to see disgorgement of the ill-gotten gains that the executives (including you Hank) garnered via the advocacy and practice of policies that led to this bubble and the economic damage you have done to this nation.
‘Nuff said.
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