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Per Declassified Testimony, Bernanke Blames Blogosphere For Itemizing Disastrous Consequences Of His Actions, Says Goldman Is A Utility
Following loud complaints by Zero Hedge over the weekend about the retention of Bernanke's FCIC testimony from the public's eye, yesterday the commission caved and agreed to release Bernanke's November 17, 2009 89-page closed session confidential transcript, in which, among other things, Bernanke complains about the... blogosphere. Arguably, among the most amusing comments are the circumstances which bring Bernanke to lament the surge of alternative media. On page 68, the Chairsatan, in responding to a question of why nobody could predict the disastrous consequences of Vissarionovich Jr's actions, we see another face of Bernanke - that of the man who deflects his gross incompetence which almost destroyed civilization as we know it... to those who worry too much: "I think there were people -- there were people saying -- including people at the Fed but others as well -- saying, in the year before the crisis, that risk was being underpriced, that spreads were very narrow, that markets seemed ebullient, that liquidity was, in some sense, excessive. There were -- you know, the way I would put it is, I think there were people -- not necessarily the same people -- identifying various parts of the problems. You know, there were people who were concerned about derivatives, there were people that were concerned about subprime mortgages, there were people concerned about the overall credit environment, there were people who were concerned about off-balance-sheet vehicles. But I think notwithstanding the claims of one or two people out there who are now sort of living on the fact that they, quote, anticipated in the crisis, I would still say that the interaction of these things, the “perfect storm” aspect was so complicated and large, that I was certainly not aware, for what it’s worth -- and it could be just my deficiency -- but I was not aware of anybody who had any kind of comprehensive warning. There are people identified -- and the trouble is -- and particularly in this blogosphere we live in now -- at any given moment, there are people identifying 19 different problems, crises." So there you have it: the next time the entire financial system collapses, which should be within a few years at most, and unless Mars bails the Earth out, this will be the last collapse, it will be the blogosphere's fault again, for identifying too many problems again, and for supposedly 'shouting wolf' when it has been right all along.
Some other highlights from Bernanke's declassified testimony which is a must read:
On the question of which banks were safe, and why JPMorgan, better known as the Fed's right hand and gold price suppression bank, was safe, when even Goldman wasn't:
Chairman Angelides: Can I ask a quick follow-up to what he said?
So what you said earlier, J.P. Morgan out of 13 was in a different position. Was there something that they saw or did that was definitively different in terms of market practice as an institution?
MR. BERNANKE: So J.P. Morgan was never under pressure, to my knowledge.
Goldman Sachs, I would say also protected themselves quite well on the whole. They had a lot of capital, a lot of liquidity. But being in the investment banking category rather than the commercial banking category, when that huge funding crisis hit all the investment banks, even Goldman Sachs, we thought there was a real chance that they would go under.
So I think the answer is that there were folks like Jamie Dimon, who -- you know, there is this classic thing that Chuck Prince said about having to dance when the music is playing. But that was exactly the wrong attitude. I mean, basically, if you were thinking about a longer-term -- a longer-term stability to your company, you want to think about what you have to do to make sure you’ve got plenty of reserves and protection against bad events and so on.
So there were some -- obviously, this -- to quote somebody else, Buffett: “When the tide goes out, you see who is swimming naked.” This was the thing that really separated the sheep from the goats. And the really strong people who really protected themselves came out better, and the ones who were relying on the general boom to sweep them along, they were exposed.
Most notable, is Bernanke's statement that any financial reform has to provision for the failure of Goldman, and more notably, says that Goldman is really a utility company under the current regime.
I just want to say this as strongly as possible -- the reform will be a failure if we could not contemplate the failure of Goldman Sachs. That is, there needs to be a system by which Goldman Sachs will go bankrupt and Goldman Sachs’ creditors could lose money. If we don’t have that, then we might as well treat them as a utility, because that’s what they are.
Odd: even "backward" Europe has that system now and it was just used. Furthermore, they don't bail out every single bank with the FDIC's assistance.... We do. Does that mean Goldman IS a utility? And if so, why did the bank just have a near-record bonus payout year?
Full transcript:
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FUCK YOU Bernanke! You lied under oath in 2009. You should be behind bars.
Yeah. I dream of the day one of these bastards gets led out of Congress in leg irons -- just a dream though.
Bernanke isn't stupid, just dysfunctional -- like a brilliant lab rat which can outperform 99% of other rats in a maze. Never been outside the lab and wouldn't last past his first encounter with an alley cat or car. It is not ironic that so many Ivy League people are like this -- it is actually a consequence of the lifetime of focussed maze training it takes to get there. Since they are disconnected from reality (real environmental feedback) they rely on other similarly credentialed (and dsyfunctional) peers for reassurance.
<Start Sarcasm\>The lack of understanding is very apparent across the blogosphere - simply stated there are not enough PhDs in economics to provide an intelligent 'understanding' of the complicated subject matter unlike the Federal Reserve who we all know & trust - When ZH refers to the Federal Reserve's fiat creation or Sack's POMO as bad they are simply misinformed...King Ben indicated that he has not monetized the debt to Congress & we KNOW he would not openly commit treason - ohhh yee of little faith & understanding - As a matter of fact, the Federal Reserve has updated Newton's Philosophiae Naturalis Principia Mathematica & it is evident that the Chinese are responsible for gravity as well as airplane crashes - Life is soooo simple when you let Ben do the printing' </End Sarcasm>
Got this from Jesse's blog.
"In addition, any economist will tell you that when the free market fails a black market emerges. The blogs are the black market of information."
David B. Collum, Cornell University”You all don't get it. Its Bush's fault.
Where the hell is the MSM? Sorry, I forgot there is no such thing.
The problem with Bernanke's BS is the blogosphere did identify the problems and the Fed identified none of the problems........not only that they fail completely in learning anything from the 1998-2001 easy money policy and proceeded to do it again in 2003+. Tell me one time anyone at a Fed board meeting made any actionable suggestion that there was a problem (because there was...and several of them) and what was the boards action to such suggestion??? They are serverly incompetent to work in their chosen field of complex systems.
Here is the call by Ben in 2007, note that these comments were courtesy of Reuters, a MAIN STREAM NEWS AGENCY...Reuters does not question the calls by Ben or Tim but they definitely should have. I know when I read Ben's comments that there would be 'no spill over to other sectors of the economy from the housing sector', I believed that he was definitely wrong...and, I too am a nobody.
"Friday, March 23, 2007 4:39 p.m. EDT
Bernanke: No Long Impact from Subprime Crisis"
...and little Timmy, at the time head of the NY Fed, chimed in...
"As of now, though, there are few signs that the disruptions in this one sector of the credit markets will have a lasting impact on credit markets as a whole,"
http://archive.moneynews.com/money/archives/st/2007/3/23/164110.cfm
they were/are just trying to read from the scripts provided to them.
They have to say what they are told or they don't get the rewards after a decade or so of "selfless" pub(e)lic service!
Really now, get with the program comrade.
Does Bens eyes seem to keep darting left and right keeping escape routes in view?
in my opinion more like a rat looking for the next chunk of cheese.
That's funny. Guy is the head of an institution that has monoply over the world reserve currency, but blames people who own web hosting plans.
Apparently, they do not use 60-70 years old readings such as Hayek, Mises or Menger in Princeton.
"was not aware that anybody had any kind of comprehensive warning."
I didn't have any kind of comprehensive warning either but I was in a panic to sellreal estate in 2006 and 2007 before the market crashed. Why was I scared?
BECAUSE REAL ESTATE PRICES DON'T GO UP 200%- 300% IN 6 YEARS WITHOUT TROUBLE AHEAD!!!!"
He's "book smart" but couldn't figure out how to tie his shoe if his shoe lace broke and didn't have a spare.
The great irony about capitalism is that it demands continuous growth. Unchecked growth is eventually always self destructing. (Think of humans with growth hormone issues that cause a person to be 8 feet tall - these people die young.) We are watching the end of capitalism. Unless we figure out quickly how to exploit the planets or some other untapped growth component, global capitalism will implode. I say, Good riddance.
http://www.youtube.com/watch?v=2NhlwRFgkyk
where is your signature, I am a chumba
Utility, bitchez†
Without the bloggers, no one would know the truth. I think that Bernanke reads them regularly, saw how bearish they were and decided to stick it up their asses by buying the market every day to prove them wrong.
This guys ego is unmatched. He believes his completely untouchable and will do whatever he wants
Guilty as charged
www.DerivativesColapse.com (www.siv0.com)
www.FinancialBlackmail.com
www.JoeSixPack.me
www.RevokeTheFed.com
www.Gold-Silver.US/forum
while reading those quotes I couldn't tell if this was a real interview or from the Daily Onion.
So... this is not a spoof?
In other words,
"And I would have gotten away with it, if it weren't for those meddling kids!"
Lenin, Stalin, Khrushchev and Brezhnev are all travelling together in a railway carriage. Unexpectedly the train stops. Lenin suggests: "Perhaps, we should call asubbotnik, so that workers and peasants fix the problem." Stalin puts his head out of the window and shouts, "If the train does not start moving, the driver will be shot!" But the train doesn't start moving. Khrushchev then shouts, "Let's take the rails behind the train and use them to construct the tracks in the front".(A hint to Khrushchev's various reorganizations.) But it still doesn't move. Brezhnev then says, "Comrades, Comrades, let's draw the curtains, turn on the gramophone and pretend we're moving!"
IIRC being oblivious to a problem does not make for a good excuse. Deflecting from your own ineptitude rarely makes for a satisfactory explanation.
I think the record is pretty clear about what went on leading up to the crisis of '08, and I believe those who were suggesting that there was a problem in the housing market demonstrated that when housing prices started rising in excess of CPI and ownership started elevating from historic trends that a problem was forming.
Claiming back in '05 that there was no housing bubble was disingenuous and akin to now claiming that his credit creation / monetization (inflation) is not causing prices to rise.
Failing now to understand the magnitude of what will come, I can only hope, will be his undoing. Unfortunately for us, by that time it will be just that much worse.
When was the internet switch finished being installed? right after this made its way to the Oval office?
Thanks for Playing!!!
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...you realize he's a satirical character, right?