This page has been archived and commenting is disabled.
Ben Lied
Over the years a good number of speeches by our leaders have been marked by history. Abe said, “Four score…”, Jack said, Ask not…”, George said, “Mission accomplished…” I
think we got more of those memorable worlds today from Bernanke. His
comments will be remembered like George’s. They will stick in our minds and
thoughts for decades. And like George’s words, history will prove them
to be a lie. Ben’s lies will cost us trillions, and quite possibly our
way of life. His lie:
I am confident
that the FOMC will be able to tighten monetary conditions when
warranted, even if the balance sheet remains considerably larger than
normal at that time.
How could he possibly be “confident” that this can be done? It has never
been done before. No sane man can make such a promise when there is no
history to guide us. Bernanke is sane, therefore I conclude that he is
lying to us on this critical fact.
What economic environment would exist when “conditions warrant
tightening”? That’s simple to forecast. If inflation goes above 4% in
any 12 month period or averages above 3% in 24 months they would have to
tighten. Bernanke thinks he can sell a few trillion in Bonds in that
environment? Not a chance in hell. If the Fed said, “From now on we will be selling 100b a month”
the bond market would fold. Long-term interest rates would pass 5% in
months. 6% mortgages and competition for credit from the private sector
would collapse the economy.
Bernanke is an academic who studied the Great Depression. He has never
sat on a bond desk. He has no idea what it is like when the holders of
your paper say, “No mas”. He thinks that because there is an
insatiable demand for fixed income today the same conditions will exist
when tightening is required. He says he is confident of that. Not
possible.
For me the Grand Experiment of QE rests on the issue, “Can we get out this?”
If that is in doubt (as I strongly believe) then the policy can only be
viewed as a reckless gamble. Before Bernanke pulls the trigger he needs
to convince me and many others that his confidence is justified.
I want to hear some thoughts from others on this issue. I want to hear
from Brian Sack at the NY Fed. It is he who will have to execute what
Bernanke is so confident about. He would never soft sell that risk. He
knows full well that it can’t be done without the possibility of a
spectacular blowup. He would never use the word “confident”.
I want to hear from the primary dealers and the likes of PIMCO. Put them
on a stand in D.C. and ask if they are confident that this can be
accomplished. Not one would. Get some former Treasury Secretaries to
opine. I would like to hear from Greenspan. NO ONE would say they are
confident on the outcome. I want to see just one credible source chime
in with Bernanke on this. Just one.
Bernanke put his reputation on the line with his “confident” remark. How can anyone be so certain about an uncertain future?
»
- advertisements -
Hi Bruce,
I agree with you that Ben's confidence is misplaced, but a bigger question is, has our friend Ben gotten ANYTHING right in the past 5 years?
If we were being charitable, maybe you could give some credit for the first several 25 bps moves, but then he gave it all back and then some.
Where's Orly today? I miss her.
Probably staring at forex charts and rocking back and forth.
Um - of course the Treasury will be able to sell all the bonds it wants!
Wake up!
Bernanke will keep the funds rate low and do Q tightening, allowing banks to lock in 200 or 300 risk-free basis points using no capital whatsoever. Treasury purchases will crowd out other credit and that's that.
C'mon.
Will long rates go past 5% or 6%? Try 10%. So what? It's happened before. Maybe the author is too young to remember.
Gold to $1700.
Sadly I am old enough to remember it all. But I have no recollection of time when the Funds rate was zero and the ten year at 6.
The TBTF banks are in trouble again, but since public opinion TARP ll is not an option. SO Bernanke decides to tell the world today that our economy needs QE ll to start the growth engine. Meanwhile the bozo's in Washington refused to extend the tax cuts (for at least a couple of years). What the fuck is going on!? Is anybody home? Does anyone in a leadership position have clue? Is everyone just pursuing their own agenda? I don't think a revolutionary could have come up with a better plan to destroy our country without firing a shot (yet). I am very worried about the future...
He is not a liar. He is just dumb.
http://robvstate.com/2010/01/04/bernanke-quotes/
Should interest rates rise to 5%, the interest payments would amount to around $600 to $700 billion given the current counterfeit debt. Think about the implications of that number. What about unfunded liabilities? Aside from these facts, what if this was all planned this way? The rest is just a show. Get some popcorn and enjoy. Just a thought...
Besides, Bennie is a puppet anyway...just following orders, like a good little boy, from his masters.
There is no debt unless we agree to it.....and therein lies the answer....just Google "Credit River Decision" and there's the answer.
Bruce
I'm with you. Keep up the good work. I always read and enjoy your posts.
Government lies = Government Policies
Nothing to see here sheeple (people) / Move along
Either this country's politicians wake-up and serve the people or it's all over! Republicans and Democrats. Why can't we just flush the SEC along with Barney Franks and Christopher Dodd down the toilet? Those 3 have fucked main street for years and quite frankly, I'm sore as hell! Don't get me wrong, I like a good roll-in-the-hay but at least give us the courtesy of a reach around! Rant over.
I wonder if the disappointing 30 year auction was stage manged to yield inflation expectations.
The TBT put option action is interesting today, very high volume compared to open interest, and increasing vol and prices relative to the underlying.
The most confident person in any con is the con man
"The Sting"
If the whole thing doesn't come crashing down, and there is still a Federal reserve, those T's will be on the Fed's balance sheet until they mature.
And in an environment of perpetual roll over maturity never comes
It would be fun to connect a lie detector to Bernanke, then observe an overlay of its readings in real time while he delivers his speeches.
You know what?
After years of hard thought on the issue I have come to a realization.
All the years you thought you were the toughest prick on the block along comes a bigger and tougher one.
You can be confident all you want, (what he is really saying is he is scared shitless) someone is alway tougher and comes and kicks your ass.
PS I won't comment on the fact that these dweebs were locker prisoners when I was growing up but it is very clear that the world is in very deep trouble. No amount of pessimism is going ot prepare for the outcome here.
Kondratieff Winters are fugging duggly and that is just hte way it is. The elites are just slowing it down long enough to get out.
The problem is the retails are biting.
Guns, grub, gold and bitchez - bitchez
Easy Ben said:
"I am confident that the FOMC will be able to tighten monetary conditions when warranted, even if the balance sheet remains considerably larger than normal at that time."
He should have watched this video:
http://on.ted.com/8dez
your premise that he is sane might be incorrect. that said, he may not be lying.
Spot on, Bruce.
Bernanke always says he could sell whatever amount of bonds he wants if conditions warrant, but he never addresses the two key questions: "To whom?" and "At what price?"
"Loser"
Words by Robert Hunter; music by Jerry Garcia
If I had a gun for every ace I've drawn
I could arm a town the size of Abilene
Don't you push me baby cause I'm moaning low
You know I'm only in it for the gold
All that I am asking for is ten gold dollars
I could pay you back with one good hand
You can look around about the wide world over
You'll never find another honest man
Last fair deal in the country, sweet Suzy
Last fair deal in the town
Put your gold money where your love is, baby
Before you let my deal go down
Don't you push me baby
because I'm moaning low
I know a little something
you won't ever know
Don't you touch hard liquor just
a cup of cold coffee
Gonna get up
in the morning and go
Everybody's bragging and drinking that wine
I can tell the Queen of Diamonds by the way she shine
Come to Daddy on an inside straight
I got no chance of losing this time
No, I got no chance of losing this time
I witnessed this sentence and I can assure you it was delivered with a straight face and no hand shaking or lightening bolts in the immediate vicinity.
So it must be true.
The lightening bolts come later I fear.
http://www.youtube.com/watch?v=j_ekugPKqFw
I fear that well before that point Ben will have been hustled away (pun absolutely intended) to an undisclosed location.
Missed him by that much.
Bernanke has been wrong for 15 years.
I'm not confident.
Ben has been lying since 2005 its part of his job to protect the banks.
http://www.youtube.com/watch?v=INmqvibv4UU 2005 on the housing market and the strong economic fundamentals with Liesman and Maria
http://www.youtube.com/watch?v=V5sDKwMP6Pc&feature=related 2006 saying how the housing prices are stabalizing at 5:56
http://www.youtube.com/watch?v=Kbfa5eszd7E In 2007 telling how he is going to carry out their mandated responsibility of maximum employment and price stability at 1:23
I could post these all day long there are so many of him lying.
With "One World Government"?
I think the Ben's rabbit in the hat is described by Griffin in "A Creature from Jekyll Island": up bank reserve requirements. Griffin would nationalize the banks. Bernanke won't, but this action will decelerate any kind of inflation.
The banks are already practically nationalized, at least in terms of their losses. What needs to happen is to completely de-nationalize them, and the nation's currency. Bernanke won't do those things either.
It's not a lie if they are doing what they think is right! BULLSHIT!!!
They (Fed Chairmen) have the luxury of doing and saying what ever they want under the auspices of "what is needed at the moment"
Weather or not it has been proven or done before they can wave their magic wands and justify it as needed due to the "unprecedented situations" that we face. (Get out of Jail free card) Oh that’s what you get when you play monopoly.
Ben, stop playing games with the lively hoods of Americans
You and the rest of your team and this Administration needs to look up the word
ACCOUNTABILITY!!!
Accountability is a concept in ethics and governance with several meanings. It is often used synonymously with such concepts as responsibility,[1] answerability, blameworthiness, liability, and other terms associated with the expectation of account-giving. As an aspect of governance, it has been central to discussions related to problems in the public sector, nonprofit and private (corporate) worlds. In leadership roles, accountability is the acknowledgment and assumption of responsibility for actions, products, decisions, and policies including the administration, governance, and implementation within the scope of the role or employment position and encompassing the obligation to report, explain and be answerable for resulting consequences
If the Fed was a corporation, you would have been FIRED!!
You run an "OFF Balance sheet" arm of our Gov't.
Let’s think back to other CEO's and companies that had off balance sheet accounting issues.
Ken Lay CEO of Enron
Bernie Madoff
That’s good company, but you have your get out jail free card because of the "unprecedented situations" that we face.
Where is the Accountability!!
Excellent. You nailed the loose thread in that tapestry of bullshit, Bruce.
+1
Pithy Man Bruce.
ALWAYS worth the read. A real rarity.
"Capital must protect itself in every way...Debts must be collected and loans and mortgages ?foreclosed as soon as possible. When through a process of law the common people have lost their ?homes, they will be more tractable and more easily governed by the strong arm of the law applied ?by the central power of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principal men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd."-- ?Taken from the Civil Servants' Year Book, "The Organizer" January 1934
Bernanke is a serial lier; his lies on the housing market, subprime crisis, et al go way back. I believe he is just another sociopathic shill of the ruling elites; he does what his masters want & his enabling politicians demand. His reticence on the degree of QE caused the sell off.
He can no more predict the market reaction to the multitude of cross currents swirling around him than I can or any other man or group of men. Good luck Bernanke with that task & God help us when he fails.
In Private Banking the banker is personally liable with all his personal wealth. Bernanke can be "confident" playing with others people's money, no skin off his back.
"If inflation goes above 4% in any 12 month period or averages above 3% in 24 months they would have to tighten." Bernake is a tenured academic. He recognizes the above critera is a function of two things: time and index of inflation. Since he cant change time, he will change the index of inflation. Literally. He will redefine it so as it does not exceed the criteria.
EDIT: ipads will be brought into the CPI. Since they typically deflate in price, it will counter rise in food stuffs.
All I know is Bernanke did not look or talk confidently.
The longer he spoke the worse it got.
He is not an evil man rather simply another professor that got put in the wrong place at the wrong time and his "beliefs" in books and theory will be the end of the economy as we know it.
He is truly, all alone now.
Bull a man is judged by his deeds. This is like saying Vasili Blokhin was just in the wrong place and the wrong time and he really didn't want to kill all those people. Ben has supported this agenda for a decade, he knows what's going on.
I know but the only thing that has "died" is the dollar...
We're just getting started. How many will die and suffer when the dollar dies? Remember it's not just us dumb slobs in America, the rest of the world is also holding on to Benanke Fun Bux. He will help user in an age of want and degradation. What of the inevitable war after a currency crisis? When this is over he will have harmed far more lives.
This is akin to making a virus to destroy all wheat on the planet and saying "I only killed all the wheat on the planet, it's not like I killed a person".
Rather:
So what if I destroyed all the wheat on the planet .. you can still make cake .. albeit the non flour kind
http://www.youtube.com/watch?v=2ZBtPf7FOoM
The compassionate side of me tends to agree with you.
He was not lying, you are applying your definition on his words.
"I am confident that the FOMC will be able to tighten monetary conditions when warranted, even if the balance sheet remains considerably larger than normal at that time."
So when is it warranted? 2% a year inflation? 5%? 100%? 10,000%? 100,000,000,000%? His statement is try because it is as they see "when warranted". So maybe after we see commodity prices lock limit up every day and goods start doubling in price every week then maybe it will be time to apply the breaks, who knows.
That of course would be breaking the rules as we know them. It would also be lights out.
Rules? Ben doesn't play by no stinking rules. 35% bound .. so what. Investment grade .. ya SocGen's potatoes and sub-prime Harley's .....
Yes it would, but what forces them to play by the rules? Can we audit them and make sure their numbers are correct? Is there oversight on their policy? The Fed is answerable to no one for it's deeds. Hell correct me if I'm wrong, but under a reading of the rules isn't the Fed not allowed to by MBS? They have already tossed the rules aside in an "emergency" so how can we expect them to play by them now? Also in it's place as a funding mechanism for the power mad goons in the house and senate can we legitimately expect them to bite the hand that feeds?
+++ shameful,
just makes you want to go out and invest in capital expenditures, hire some folks, and grow your enterprise doesn't it?
just knowing the rules almost *have* to be changed on the fly makes me all warm and fuzzy...
the fed can buy anything, cars, boats, foreign debt, your life was signed away years ago, at Bretton Woods. At which point does confidence in the currency erode to a point where no foreign country wants to deal with us, (at some point the prison labor in China rebels against the deal the thugs in Bejing have made, and Google Microsoft and Apple probably, are helping keep them in line)
The reason they want to audit the Fed (Paul, etc) is because the Fed has been backstopping illegal government activity since Watergate, (checks written through a Mexican bank?) up to and including Iran/Contra. By analogy think about all the people who were claiming the Plunge Protection Team was bidding up the market. No joke, now we know that malfeasance is mere chump change, they run the entire stock market the commodity exchanges, the Primary dealers, and they front run their bond auctions through foreign surrogates, the claim against the PPT is the line from Apocalypse Now, about murder in Vietnam being like handing out speeding tickets at the Indy 500.
Think really big here, and you have about half of it