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the fed is screwing around with us, just like they always do. stiglitz did get that much right:
Does anyone remember me ranting at the time of the TARP's passage about an obscure little sentence that allowed Bernanke to set the reserve ratio on the banks to zero?
Well, Bernanke's Congressional testimony yesterday garnered a footnote on the issue, specifically:
Given the very high level of reserve balances currently in the banking system, the Federal Reserve has ample time to consider the best long-run framework for policy implementation. The Federal Reserve believes it is possible that, ultimately, its operating framework will ALLOW THE ELIMINATION OF MINIMUM RESERVE REQUIREMENTS, which impose costs and distortions on the banking system.
Right. The cost is that you have to actually have something called "capital" behind your loan book, and you had a velocity limiter as well.
This is simply unbelievable. To call such a thing a "distortion" is the worst sort of outrage to come from a central banker.
Reserve requirements have largely become a quaint subject since Greenspan effectively eliminated them by allowing almost-unlimited marketing and use of "sweep accounts." But nonetheless they remain one of the checks and balances on potential bank runs destroying a firm's cash position without warning.
The sheer lack of recognition and understanding that we're in this mess almost exclusively due to excessive leverage in all parts of our financial system is beyond ridiculous - especially for an agency that now wants to be granted even more power of oversight and "regulation." http://market-ticker.denninger.net/a...-Bernanke.html
seriously, geithner and bernanke should be in jail where they can do no more damage to us. i hope everyone sees what is going on here, and understands that THIS POSES A GREAT DANGER TO OUR COUNTRY.
the fed is screwing around with us, just like they always do. stiglitz did get that much right:
Does anyone remember me ranting at the time of the TARP's passage about an obscure little sentence that allowed Bernanke to set the reserve ratio on the banks to zero?
Well, Bernanke's Congressional testimony yesterday garnered a footnote on the issue, specifically:
Given the very high level of reserve balances currently in the banking system, the Federal Reserve has ample time to consider the best long-run framework for policy implementation. The Federal Reserve believes it is possible that, ultimately, its operating framework will ALLOW THE ELIMINATION OF MINIMUM RESERVE REQUIREMENTS, which impose costs and distortions on the banking system.
Right. The cost is that you have to actually have something called "capital" behind your loan book, and you had a velocity limiter as well.
This is simply unbelievable. To call such a thing a "distortion" is the worst sort of outrage to come from a central banker.
Reserve requirements have largely become a quaint subject since Greenspan effectively eliminated them by allowing almost-unlimited marketing and use of "sweep accounts." But nonetheless they remain one of the checks and balances on potential bank runs destroying a firm's cash position without warning.
The sheer lack of recognition and understanding that we're in this mess almost exclusively due to excessive leverage in all parts of our financial system is beyond ridiculous - especially for an agency that now wants to be granted even more power of oversight and "regulation." I'm Gonna Throw Up (Bernanke) - The Market Ticker
seriously, geithner and bernanke should be in jail where they can do no more damage to us. i hope everyone sees what is going on here, and understands that THIS POSES A GREAT DANGER TO OUR COUNTRY.
What Ben wants is to get the velocity up!! I don't think they realize that debt has risen to the point that the only way to get growth is to get the debt down first and then to have growth after.
bernanke is flat out lying. denninger had another good call today:I suppose they expect me to believe this:
During congressional testimony, House Financial Services Committee Ranking Member Spencer Bachus asked if the Fed was aware of Lehman's "accounting gimmicks."
"We did not have that information," Bernanke replied. The Fed "had only a couple people in the company to make sure" Lehman repaid money it borrowed from the central bank's primary lender credit facility, he said.
That's funny - the report says that FRBNY had all the information. Now they may not have acted on it, but that's not the same thing as not knowing about it.
Oh wait - he did say that:
"We were not charged with supervising the company, clearly it was a very troubled company," Bernanke said on Wednesday. "We had no authority to require them to do anything."
So if you know someone's going to rob a bank, and you sit back and let them do so because you have "no authority to regulate them", and in fact you trade with them, are you complicit in whatever they pull?
Now there's a good question.
An even better one is whether we should hand regulatory authority to someone who refused to blow the whistle on whatever irregularities it may have observed (like, for instance, gaming the PDCF, being told by Citi they had no good collateral - which I presume means they turned immediately to The Fed with the same garbage, and in fact announcing false "test transactions" that were in fact real transactions)?
After all, if you're the "uber-regulator" and the primary institution charged with overall banking system stability and clearing, you don't have any sort of responsibility to blow the whistle when those who are dealing with you are lying, do you? (end)
we are living in upside down land now, but thank goodness there are still some men who are willing to call out the lying and the deception. i can't believe that the mainstream media doesn't seem very interested in the looting of america.
bernanke is flat out lying. denninger had another good call today:....
we are living in upside down land now, but thank goodness there are still some men who are willing to call out the lying and the deception. i can't believe that the mainstream media doesn't seem very interested in the looting of america.
It is called regulatory capture. The banking system is using the fed to regulate itself. Hmm how well does this work? 1929 comes to mind. I hope we figure out how to deal with it before we waste two decades like Japan has.
isn't it funny that our congress can pass some mandatory health care tax (even though our president opposed it when he ran for office, see business section for video) yet still has done nothing about the federal reserve's unwillingness to disclose where OUR money went.
one might reasonably think that some of our elected officials are crooks and don't want us to find out what happened to the money. i am very glad to see that the federal reserve has LOST THEIR APPEAL under the freedom of information act and now must disclose bailout details.
isn't it funny that our congress can pass some mandatory health care tax (even though our president opposed it when he ran for office, see business section for video) yet still has done nothing about the federal reserve's unwillingness to disclose where OUR money went.
one might reasonably think that some of our elected officials are crooks and don't want us to find out what happened to the money. i am very glad to see that the federal reserve has LOST THEIR APPEAL under the freedom of information act and now must disclose bailout details.
thank you elected officials for nothing.
Well said. I would be less circumspect but you get bonus points for being PC.
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