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Bernanke Blames Banks For Slow Recovery and High Unemployment . . . Then Gives Them a Pat on the Back and a Wink
As I have repeatedly written, unemployment will worsen because the too big to fails aren't lending. See this.
Bernanke just said the same thing:
Federal Reserve Chairman Ben Bernanke on Monday blamed banks for slowing the recovery and keeping unemployment high.
Despite
hundreds of billions in dollars in taxpayer bailouts, the nation's
banks have dramatically reduced their lending this year.
"Banks'
reluctance to lend will limit the ability of some businesses to expand
and hire," Bernanke said. "Because smaller businesses account for a
significant portion of net employment gains during recoveries, limited
credit could hinder job growth."
Bernanke predicted that the
unemployment rate will get worse before it gets better. "The best thing
we can say about the labor market right now is that it may be getting
worse more slowly"...
"Access to credit remains strained for
borrowers who are particularly dependent on banks," Bernanke said.
"Bank lending has contracted sharply this year...[and] banks continue
to tighten the terms on which they extend credit for most kinds of
loans."
But as I wrote in February:
The government could have forced the banks to use their bailout money for loans.
For
example, unlike taxpayers in European countries - who get voting shares
in return for their bailouts - the U.S. taxpayers have no say in the management of the companies they are giving their hard-earned money to.
And European bailouts included
provisions protecting against excessive dividends and executive
bonuses, and requiring loans to homeowners and small businesses:"Five
days before Paulson struck his deal with the banks, British Prime
Minister Gordon Brown negotiated a similar bailout — only he extracted
meaningful guarantees for taxpayers: voting rights at the banks, seats
on their boards, 12 percent in annual dividend payments to the
government, a suspension of dividend payments to shareholders,
restrictions on executive bonuses, and a legal requirement that the
banks lend money to homeowners and small businesses.
In sharp
contrast, this is what U.S. taxpayers received: no controlling
interest, no voting rights, no seats on the bank boards and just five
percent in dividend payouts to the government, while shareholders
continue to collect billions in dividends every quarter. What's more,
golden parachutes and bonuses already promised by the banks will still
be paid out to executives — all before taxpayers are paid back."Now, the Fed is begging banks to put the money into new loans or bolster loss reserves, instead of paying dividends for shareholders.
But the left hand doesn't know what the right hand is doing. For example, the Treasury Department encouraged banks to use the bailout money to buy their competitors, and has pushed through an amendment to the tax laws which rewards mergers in the banking industry.
Moreover, as the above-linked article from Huffington Post shows, Bernanke is protecting the too big to fails:
Bernanke
also touched on "too big to fail." ... Bernanke said in response to a
question, that "making banks smaller isn't going to do it."
So while Bernanke is criticizing the banks on the one hand, he
is patting them on the back with the other hand and giving them a
big wink.
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Just want to add one thing to this whole thing on us, or banks not lending, we can't lend to people who don't qualify. We are still lending quite a bit, just can't lend to unsecured people, since the equity doesn't exist, we can't lend. If there were some equity in homes or land or anything for that matter, we would be lending like crazy. But the government has controlled us by not letting us choose our own appraiser, the appraisers are scared, so they are giving much lower values. Give the bank some value, and we can lend.
what is the evidence that the problem is "banks not lending", rather than "lack of qualified borrowers"? Remember what got us into this mess: trying to replace income with debt.
Apocalypse Now
re:
"Next up, controlling air and water (carbon tax trading) and the last frontier of freedom, your body (national health care program). " I have done some study on water trading , so far only place is Australia . Water trade , like carbon offset trading will be a trillion dollar affair. How is our water going to be controlled and meted out ? Mineral aka water rights ? I know corporations have had success in this area . If they can get away with it so can Gov'ts . Please post links to this topic if you have some .
Thanx - Pondmaster
just wanted to do the math problem
the dollar
dances
on its own
now...
One could only conclude that they are actively attempting to destroy the middle class and by extension the United States of America.
Every individual with an IQ over 120 knows that the only solution is jobs, therefore every policy and bailout must promote the creation of jobs. The banks/fed/media complex convinced everyone that the health of banks leads the economy, this is false unless there is something we don't know about the TBTF derivative pyramid scheme.
They have created a stranglehold on credit (for economic & political power) just as they have created a stranglehold on oil (for economic & political power). Next up, controlling air and water (carbon tax trading) and the last frontier of freedom, your body (national health care program). Full control, absolute domination, & complete submission of the masses unless we change the system.
All wealth is relative to others, if everyone had 2 units of wealth but you had 10,000 you would be rich - it doesn't matter if this is houses, cars, oil barrels, gold bars, or currency. If they can starve out the middle class like armies used to do to cities, they can pick up assets (like houses & lands) at a bargain price.
One could only conclude that they are actively attempting to destroy the middle class and by extension the United States of America.
Everyone individual with an IQ over 120 knows that the only solution is jobs, therefore every policy and bailout must promote the creation of jobs. The banks/fed/media complex convinced everyone that the health of banks leads the economy, this is false. They have created a stranglehold on credit (for economic & political power) just as they have created a stranglehold on oil (for economic & political power). Next up, controlling air and water (carbon tax trading) and the last frontier of freedom, your body (national health care program). Full control, absolute domination, complete submission.
+1
"Banks' reluctance to lend will limit the ability of some businesses to expand and hire," Bernanke said.
Chirst, I wish this man would have a moment of clarity and rinse his mouth out with a pistol.
This might be overly simplistic, Ben, but with real un-employment running north of 20% and millions of people still fresh off the epic credit fail, maybe there isn't going to be any end demand for your credit.
Real estate recovery is the key to bank recovery. Withoutg it, the economyh will continue to suffer.
time123
admin: http://invetrics.com
When are those complete phucks in the US Senate going to stand up and refuse to confirm this phuck Bernanke for another term?
And when is the President of the United States going to open up his eyes and realize that bernanke, summers, geithner, and the US banking complex is playing him like a fool?
Mr. Head, the only ones getting played here is us. Obama is one of the boyz. All this was put in place some time ago.
I don't want to criticise you but I would ask you to consider some basic questions about the thesis that President Obama is some kind of stooge:
How else can you explain the facts that the Treasury Secretary wrote most of the mortgage-related garbage and pumped it out to the world while being the Lord over at Golden Slax? (I am referring to Hank Paulson...)
How do you explain the fact that the MIT-trained, Princeton Prof, world-renowned expert on the Great Depression just so happened to be in office at the FOMC at the time?
How can you explain the utter incompetence of a very bright Californian named Chris Cox "working" at the SEC? In that case, explain the repeal of Glass-Steagal at about the same time.
How do you explain the fact that both Obama and Hilary Clinton attended Bilderberger meetings before the election?
How is it that Larry Summers is some kind of guru for Obama and his national economic team?
How did the king of the Plunge Protection Team (PPT...) go from running the New York Federal Reserve Bank in New York to Treasury Secretary himself?
Why was Paulson having continual telephone contact with Sith Lord Blankfein while Lehman and Bear were being razed?
Seriously, if you believe all these things were a coincidence and that Obama and GWBush are some kind of hokeyo-pinochios, out-of-touch idiots, then you may be completely misguided.
Are you sure you have the right website?
You just a preaching to the choir here brother.
One thing i would add is that it doesnt matter who is in office . This is a plutocracy run by the plutocrats and their lackeys the lobbyists.
For a full explanation refer to :
http://www.youtube.com/results?search_query=george+carlin+who+controls+a...
Playing him like a fool? It's payback baby, Obama knew once elected, he would have to pony up to their every whim and desire. They say jump, he says how high?
Meanwhile the net result is simply a rearranging of the deck chairs on the titanic while they briefly prop up the markets. This will soon come to an end in my opinion.
I may never be as eloquent as others here but I am a right sided brained intuitive that somehow gets the big picture sooner and understands it better sometimes than some leftys that that have to painstakingly formulate, equate, weigh evidence and cross check results against historic essays and economic theory, and get a Bernanke doctorate in the great depression . But we seem to be drinking at the same bar so let me share this with my beer tonight.
If all the money given out was given to the American people we would be spending our way up instead of printing our way up and giving the $$$ to all those fucking egghead geniuses that fucked up the planet's economy. Any questions?
Thats how my broken record spins
Of course. So once you get to that point in your thinking, one must come to the conclusion that the powers that be aren't trying to fix the problem, at least not in the way you and I think of fixing a problem.
They will have all kinds of reasons for not doing what you suggest. All great Ponzi's have long involved details. Common sense never enters the picture.
"Federal Reserve Chairman Ben Bernanke on Monday blamed banks for slowing the recovery and keeping unemployment high.
Despite hundreds of billions in dollars in taxpayer bailouts, the nation's banks have dramatically reduced their lending this year."
----------------------------
I am so tired of the line of shit coming from the horses mouth. Turn the bastard around so at least we can get the real thing from the back end and fertilize some crops. I was reminded of the following as I listened to his speech today.
It's nearly impossible to get a person to do "A" if s/he is paid to do "B".
As long as the Fed pays the banks a handsome reward by lending to the banks at near zero and then paying them around 4% to keep the money on deposit at the Fed, what incentive do the banks have to lend to the unwashed masses? And this is deliberate, not an unintended consequence.
The banks have agreed to be the public whipping boy in exchange for risk free returns on borrowed money. As close to a sure thing you'll ever see in America. I don't know what pisses me off more, that the screwers (the banksters and other assorted ilk) are getting away with this or that the screwees (that's you and me folks, had enough yet?) can't recognize a screwing sans K-Y when they're on the receiving end.
No one is this blind. We simply don't wish to be conscious while the lobotomy is in progress. Wake me up when they're done. And remember, they promised they wouldn't take more than two scoops of brain matter this time around. Keep an eye on them for me, will ya?
Goodnight Irene.
Just wonnerin' where you got the 4% figure for interest the Fed is paying on reserves.
I read one of Dudley's speeches in which trumpets the benefits of this arrangement, but he didn't give a number.
I've had the same problem of finding the exact number from a linkable source. The Popular press has talked about 4% and some financial press has talked about prime. That was why I said around 4%.
The payoff is obviously very good or the banks wouldn't hold the reserves at the Fed. If I ever find a linkable source, I've got your ID and the "cheeks" avatar firmly in mind and will drop it on you the next time I see cheeks on ZH.
Who is that fine lady in your avatar?