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Guest Post: Bernanke Nomination By The Numbers And What Saves Him
Submitted by Jim Bianco of Arbor Research
Bernanke Nomination By The Numbers And What Saves Him
A milestone in Bernanke’s nomination was reached this morning …. the Sunday political talk shows. John McCain came out this morning against Bernanke. So here’s what we know. As of this morning (noon CT, January 24) …
Bernanke needs 60 votes to end a filibuster of his nomination (known as cloture). After cloture, he then needs 51 to be reappointed. So, the bogey is 60 for cloture.
Senators that announced they will vote for Bernanke
- 27 (19 democrats, 8 republicans). The bold names are those that voted for Bernanke in the Senate Finance committee. 16 in the committee voted “aye”. So, Bernanke picked up another 11 senators since the committee’s vote.
Senators that announced they will vote against Bernanke
- 16 (4 democrats, 11 republicans, 1 independent). The bold names are those that voted against Bernanke in the Senate Finance committee. 7 in the committee voted “no”. So, Bernanke lost another 8 since senators since the December 17 committee vote.
Analysis
So far 41 Senators have publicly declared for or against Bernanke. 63% (27) are for and 16 (37%) are against. Remember he needs 60 of 100 votes, so this is very close.
Additionally, since the December 17, 2009 Senate Finance committee vote, Bernanke has picked up an additional 11 votes and lost another 8 votes. Or, Bernanke picked up 58% of declared Senators and lost 42% since he passed the Senate Finance committee. Again, very close to the 60 of 100 he needs.
Senators that announced they are undecided about Bernanke
- 20 (13 Democrats, 7 Republicans) have publicly said they are undecided about Bernanke. No one on the Senate Finance Committee is undecided. But, we can be fairly sure many of these Senators have serious reservation about Bernanke despite Obama’s endorsement and winning approval from the Senate Finance Committee. Expect a majority, if not a solid majority, of these undecided Senators to vote “no” unless something happens in the next few days to change the political dynamic (such as a stock market crash as discussed below).
Senators that have announced nothing about Bernanke
- Above we identified the position of 63 Senators on Bernanke (for, against or publicly stated they are undecided). That leaves 37 that have said nothing about Bernanke. 21 are democrats, 15 are republicans and 1 independent. Given how this issue was moved front and center on Friday, expect a lot of these Senators to publicly take a position in the next 72 hours.
Conclusion
Bernanke’s reappointment vote is coming down to the wire, it is going to be close. Recall that Bernanke was reappointed in August by Obama and the Senate Finance committee approved him on December 17. Now with seven days until his term expires, his nomination has gone from a sure thing to in doubt.
And, if you think this is not political, consider the 36 senate senate up for election in December:
- 8 said they would vote “aye” (5 democrats, 8 republicans)
- 9 said they would vote “no” (3 democrats, 6 republicans)
- 4 are publicly declared undecided and all are retiring and not running again ( 2 republicans and 2 democrats)
- 15 have made no public statements, all are running for reelection (8 democrats, 6 republicans)
In other words, senators up for reelection are saying “no” at a rate of 47%, not enough to get Bernanke reappointed let alone achieve 60% for cloture. Party affiliation does not matter.
Thank the MA senate election and the desire of Senators to not support something that is unpopular. Is Bernanke unpopular? The following is from a CNBC survey taken in December. Bernanke was about as popular as Bernie Madoff. Do you want to say yes to a guy this unpopular if you’re in a tight reelection race?
What Saves Bernanke?
In the last 18 months, the threat or an actual stock market crash seems to force Congress to do unpopular things. In September 2008, after TARP failed to pass its first vote, the stock market crashed 777 DJIA points that day. All that week everyone from Warren Buffett on down hyperventilated that failure to pass TARP would mean destruction in the financial markets. A week later it passed.
In January 2009 it was learned that Tim Geithner had a “tax problem.” Everyone from Warren Buffett on down hyperventilated that failure to approve Geithner would mean destruction for the financial markets. Geithner passed Senate confirmation even though six other Obama nominees withdrew because of similar tax problems (including former Senate majority leader Tom Daschle).
Friday the stock market was down 220 DJIA points in part on fears that Bernanke might not get reappointed. We disagree with this analysis. We believe the market is down on fears the administration has no “plan B” if Bernanke goes down and it will take months for them to find a new Fed chief when the critical exit strategy needs to be formulated and implemented. As noted above, Bernanke is not that popular so we do not believe it is about him. It’s about consistency and continuity. However, this might be a distinction without a difference.
Again everyone from Warren Buffett on down is hyperventilating that failure to approve Bernanke would mean destruction for the financial markets. The question is if this threat and 220 DJIA point decline is enough to push Bernanke over the finish line. Or, do the markets have to get significantly worse this week to scare the Senate into approving Bernanke?
Our guess is that Friday’s action is not enough as there are too many other cross currents between bank taxes, new banking rules (the “Volcker rule”) and the impact of the MA senate race to say last week’s decline was all about Bernanke.
In other words, if Bernanke does not pass, the markets get worse as the next Fed chief is months away and cannot be as dovish as “helicopter Ben” and his two trillion balance sheet. If the markets do not get worse, Bernanke does not pass as the sense of urgency dissipates.
Unless Friday was enough to scare the Senate to approve Bernanke, and we do not believe it was, it seems like the Bernanke situation is near-term bearish.
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Once McCain announced he was voting against, the obvious conclusion is that the White House has the votes it needs.
Astute observation.
+11
Did they do a "commencement ceremony" at that moment? One with say...goats and virgins?
"In the last 18 months, the threat or an actual stock market crash seems to force Congress to do unpopular things."
I.E. Banker Blackmail, and or Racketeering.
I thought there were laws against such things?
there are but those would be enforcing the laws are being blackmailed
since 2000 jim sinclair has been spot on
I have been telling you for months that there is a war going on between the Banksters and Daddy Warbucks. This is best understood as the desire to bring the power of the Federal Reserve into the Oval office, not by trusting an appointee but by absolute control over the appointee. Failing that the plan is to emasculate the Fed.
My understanding as well. And although the war between banksters and daddy is not staged, they still have the same master.
Kreso
daddy warbucks is whom?
Is there an ETF on Ben?
Yes. Its called XLF.
For all this defense of Bernanke, saying he "prevented the next Great Depression", I would like an honest answer on what exactly he did to prevent the next Great Depression?
So far as I can see, he:
-Bailed out AIG so they could pay 100cents on the dollar on their CDO positions, when other transactions were settled for 40 cents on the dollar by other counterparties. i.e., when the Financial Guarantors settled their CDO positions for 40 cents on the dollar, which AIG was negotiating, those settlements did not set off a panic. In fact they were praised in the press. Also, as an insurance company, each separately licensed insurance company had their own capital/claims paying ability, so a collapse of the holding company would not have endangered the policyholders of the individual units. So, no, the AIG bailout did not "prevent the next Great Depression".
-Lowered interest rates to zero. Sure that helps lending, but honestly, any idiot could have done that. The Japanese have been doing it for decades, it is pretty much a no-brainer.
-Bought 300B of Treasuries. What did that accomplish? Did it really keep interest rates down? Arguably it raised interest rates, as the flood of money unleashed the reflation trade. So rather than preventing a Great Depression, buying Treasuries may have done nothing but increase our debt costs, putting us further in the hole.
-Bought 1.25T of agency MBS and 200B of agency debt. He did this to supposedly keep mortgage rates down. No doubt he did that (though arguably if Treasury rates were not increased by his QE mortgage rates might not be much higher than they are today, just the spread would be higher). And he is buying almost no FHA/Ginnies, which, with full faith and credit of the US government, don't need his support. So basically all he has done is keep Fannie and Freddie relevant. Did this really prevent the Great Depression? Had the government let Fannie and Freddie flounder, and instead given unlimited support to the FHA, would the result been much different? I would argue not much. Bernanke's agency purchases have done nothing but reward the agencies.
-TALF? Too inconsequential to prevent much.
What did prevent the panic in the fall of 2008? Arguably the FDIC did much more than Bernanke. They guaranteed all interbank lending. that was HUGE, as it prevented banks initiating runs on each other. They increased the deposit insurance limits, and implemented a voluntary non-capped deposit insurance program. This was also huge in preventing banks runs by the public. And of course there was TLGP.
And then there was TARP which was the equity complement to the TLGP debt guarantees.
So on the face of it, it is unclear to me exactly WHAT Bernanke did to prevent the Great Depression II. All he seems to have done is bailout Wall Street and Fannie/Freddie, and destroying the dollar and savers.
Some hero.
+10
On the hypothetical that BB is defeated, what;s the ebst guess on how the Fed engineers an extension of the mortgage buying program beyond expiration?
If he gets defeated I doubt his successor will have the balls to continue the MBS program, and the resulting lack of liquidity will suck the life out of the current equity bubble.
Seriously, though, to my other point, exactly which of his moves prevented the second Great Depression? After all, that is what his supporters claim.
I don't think any of his moves slowed down the panic. It was almost entirely the full faith and credit of the US government, through the FDIC and/or the Treasury, that provided the systemic guarantee programs. All Bernanke's programs either were for the benefit of individual institutions or their counterparties (i.e. bailouts). None of these programs actually prevented a systemic collapse, that was all the government's doing.
great post..true, I think the most helpful was backing interbank lending and upping 250k bank back and their backing of money markets, that is something we learned from great depression, although we forgot the regulate anything you have to backstop part, so this action was unecessarily costly, as Ms. Bair knows. It is good to let debt that can't be serviced to clear if you want to get on with your economy but backstopping panic to keep basic functions going, even while things do deflate, seems basic and mainstream reasonable, not exactly genius stuff.
Also, all things Fed and US Govt did, even if you believe they were helpful, they were hugely inefficient...100 cent on the dollar AIG, TARP as opposed seizure or straight up failures...really, we need banks, but do we really need THE investment banks we had, they could have been wiped out and if they had some organizational, infrastructural value to their traders, client realtionships, accoutants, someone, say buffet could have bought the remaining org and kept it trading our whatever god's work they do that is apparently so irreplacable.
And has he saved us from Great Depression? lets check back in a year, two or 5. We could still crash hard and have tons of Govt debt on top of that...
Epic Fail
gfi, that quote irks me to no end too. why? because it's waaaaaaaaaaaaaay too early to make the proclamation that he prevented anything.
as an aside, is this the new math?
"8 said they would vote “aye” (5 democrats, 8 republicans)"
I'll take the other side of this trade gladly. You can expect almost all democrats in the undecided and no comment lists to rally to the president and party. Only maybe Nelson will not vote for him. That's 34 more before you add any Republicans. The writer is going to have to make compelling arguments for specific senators who are going to go against the White House here to make this forecast credible - starting with Republicans, who thus far are only around 50% in opposition.
Nice piece, Jim. Thank you for summarizing for those of us trying to keep score at home.
I still say the very fact that this has become controversial and high-profile is damaging to BB's reappointment in and of itself. Remember that Volcker only had 16 total no votes in 1983 after jacking up rates through the roof. When was the last time anybody gave a hoot about the Fed Res Chair position -- at the time of reappointment? He's toxic because he's on the radar screen and people actually have an opinion.
I thought it would end like this...
Relax man, after that long long life...
Smile man, smile at us; At our greedy, unfaithful life and at this crazy meaningless world we are living in... Look how age withers us while we have drowned in our rapacity, life wasting, and disloyalness...
Once upon a Time in America - Final
http://tinyurl.com/yaswju9
I hope Dr. Bernankenstein gets hit by a bus.
Obama has suspicious number of letter-writing fans named 'Ellie Light'
This is off-topic a bit, but interesting. Someone by the name 'Ellie Light' has submitted somewhat idential pro-Obama letters to the editors of numerous papers across the country, listing his/herself as a resident of those paper's circulation area. Could this be a stealth 'Chicago Machine' campaign by the O administration?
A common phrase in each: “It’s time for Americans to realize that governing is hard work, and that a president can’t just wave a magic wand and fix everything,”
Here's a link to the Cleveland paper's article about this: http://www.cleveland.com/open/index.ssf/2010/01/letter_writer_claims_diverse_r.html
this has cia written all over it....thank you
for pointing this out...contrary to my previous
opinion declaring bernanke a done deal it may be
much closer than i thought....
i can only hope that the criminal dies of a heart
attack watching c-span re-runs of his flatulent
deceitful testimonies before the bought and
paid for whores of CONgress....
Oh I think I hear Tecumseh beating his drum about to throw down some bad rocks.
okay what's that about...Obama admin election machine would not use same name if sending multiple letters in, maybe same words, but not same name...so this was obviously a message.
Just sounds like a fanatic to me. There are plenty of BO apologists left who think he can do no wrong.
Just forwarded this to my Senator. Folks fight back !!!
Dear Senator McConnell,
I was very disappointed when I saw you this morning on TV stating that the Fed Chairman Ben Bernanke will be re-confirmed to his post. This means that you will enable him to continue his corrupt tactics of robbing the middle class of America. His zero percent interest rates inflated these bubbles and stuffed the pockets of the Wall Street Bankers with huge profits, financed by the taxpayer. He took huge amounts of toxic assets off of their books and jammed them to me and my children. Banks are making astonishing profits with zero percent interest rates by investing in low-risk treasury bonds and I am stuck with paying huge taxes to service the interest on these bonds. As a result of this corrupt scheme I, as a taxpayer, end up financing the huge risk free profits of the Wall Street. This is criminal !!! I was very disappointed when you did not voice your opposition to the re-nomination of this corrupt official. I considered myself a Republican until today, when I saw this morning on the national television a very substandard performance of a Senior Republican Senator. I am ashamed of my party. I promise you that you and your party will never receive my vote ever again. Very disappointed former Republican.
I just sent this to McConnel. I had also previoiusly written my 2 Senators.
This communiqué is in regards to the question of Ben Bernanke’s reappointment as Federal Reserve Chairman. The Federal Reserve’s website overview contains the following primary objectives:
· supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers
· maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
And from 12/3/09 WSJ:
“. . . we also didn't know then how complicit Mr. Bernanke was in Mr. Greenspan's monetary decisions. Now we do, thanks to the release of the Federal Open Market Committee transcripts from 2003. They show (see "Bernanke at the Creation," June 23, 2009) that Mr. Bernanke was the intellectual architect of the decision to keep monetary policy exceptionally easy for far too long as the economy grew rapidly from 2003-2005. He imagined a "deflation" that never occurred, ignored the asset bubbles in commodities and housing, dismissed concerns about dollar weakness, and in the process stoked the credit mania that led to the financial panic”
http://online.wsj.com/article/SB10001424052748704107104574572160340353006.html?mod=djemEditorialPage
On 2 of 4 critical mandates, he has failed. Any credit he is given cleaning up the mess is negated by his role in facilitating the crisis in the first place. And his “solution” of egregious money printing has debased the currency and punished savers.
Many share my sentiment. Rasmussen reports that only 21% support Bernanke’s reappointment.
http://www.rasmussenreports.com/public_content/business/general_business/november_2009/just_21_favor_bernanke_s_reappointment_as_fed_chairman
As Leader of the Senate for Republicans, I ask that you cast your vote reflecting the overwhelming majority and vote AGAINST Bernanke’s reappointment.
Thank you for your thoughtful consideration.
Good stuff !! I hope he pays attention to his constituents …
yeah, I, along with half the people I know in MN told Amy Klobuchar not to vote for bailout, that worked out well.
I had a Klob aid tell me she would not support Public Option because of costs... I said what, the start up costs for something that by legislation is supposed to charge premiums to cover costs ala post office and stamp prices, yeah, that sounds sooo costly. I said, hey, if Amy has an ideological opposition to govt involvement in health insurance, objection to PO makes sense...but COST? now she concerned about puny PO costs after TARP?!?!?!
Franken aid at the MN State Fair in Aug told me the govt was going to make money on TARP, it would all be paid back with interest. He said this like he was some type of smarty in the know type above we simple, ignorant rabble. When I mentioned AIG, TALF etc, his eyes glazed over.
Face it our Congresspeople are idiots and corrupt, they get all their advice from Wall Street. Congress is easier to scare into submission then even the general public sheeple.
Sent long letters (nearly 10,000 characters) to both of my KY senators. Sad to see my letter to McConnell is obviously falling on deaf ears. He's useless.
Although Bernanke may get renominated, he has lost the battle to audit the Fed. Without a landslide, Bernanke will have to open the books. Isn't this what we really want?
Bernanke's best bet is to declare the close vote as a no confidence vote and bailout at 4:30 P.M. on January 29th.
Otherwise, the pressure on Obama will only increase as QE fails again.
The problem with the 'independent' Fed is the current and previous officeholders were political operatives, moral failures(the short list) and not independent Fed Chairman.
My candidate for the post (to add to the mix) is John P. Hussman. His weekly market commentary is a 'must read'
http://www.hussmanfunds.com/weeklyMarketComment.html
by independent they mean independent of the america
people whom they rape with wanton abandon.....
regarding some of the turdful thoughts that
managing a 2+ trillion usd balance sheet is
apolitical and independent i can only spit in the
faces of such deluded liars....
americans are slaves until they overthrow the
bankster elite who enslave them through fiat
and debt based currency....
anyone who has not read ed vierira is missing a
treat:
http://www.goldstandardinstitute.com/html/Interview%20with%20Dr.%20E.%20...
The theater is over. Ben is back. All financial centers NC, DE, SD, NY, IL, TN, CT, VA, NJ and Uncle Warren's NE need BB in place. My senators listened to Brown Massacre in Mass and Babs and Diane are voting no. Easy to see the repubs hang ben and bush's water around obusha's neck.
End the fed, end the dems and repubs, vote for ron and rand paul.
End the political monopoly and vote for any non RNC or DNC sponsored candidate. Whoever is the party establishment candidate DO NOT VOTE for that person. Supreme court did us a favor - we can now see with full transparency who the corporate fascists want in office and with the internet and the liberty and freedom lovers we can react accordingly.
Cheers,
Pigpen
McCain does nothing that is not first a political contrivance. He is the quintessential Hitlerite snake, whatever may emerge either from his mouth or from his voting history. And it is the measure of the corruption of our system that support from such bacteria becomes necessary in order for it to perform in the least sense admirably. The most fitting place for a jackel of McCain's attainment would be in the dock at a war crimes trial. One recalls without difficulty the calculation of both McCain and Obama in the closing days of the 2008 presidential campaign when their votes on TARP were being weighed. Behind in the polls, McCain waivered, but in the end went along with his bankster paymasters, leaving the people powerless and violated. While the exit of Bernanke would be laudible, one wonders how much it would really matter. He simply would be replaced by someone equally malleable once in the hands of their banker overlords. Bernanke, Berschmanke, all you will get from a den of thieves like the United States Senate is a ruling class synchophant.
i would vote for you for senator, president,
or supreme court justice.....bravo....
Aw, you're just saying this because I'm good looking.
AV SOOOO rocks.
Thank you for the kind words, Mr. Ned.
McCain railed against the Community Reivestment Act and associated destroyers of our financial system for many years. Criticize him for campaign reform, immigration reform and social issues, but not this.
McCain is a snake in the first degree and railing against the CRA shows you listen too much dumbshit radio. Read up: http://en.wikipedia.org/wiki/Keating_Five
So if Bernanke is not reappointed and Kohn takes over, what's the dif?
probably none but at least one putrid piece of
shit will be flushed...
End the Fed!
Mr. Bianco:
Thank you very much for this great piece and for the update...it is greatly appreciated!
With Obama's decision on Friday (my guess at least and I offer up Harry Reid's decision to go to "yes" on late Friday as proof) the hard press began in earnest and Obama went all in for Bernanke.
This is a close game in the 4th quarter and it could still go either way depending on the events of the next few days.
There goes Bernanke's plan B
Wal-Mart cuts about 11,200 Sam's Club staffers
http://news.yahoo.com/s/ap/20100124/ap_on_bi_ge/us_wal_mart_sam_s_club
but we can console ourselves with the fatuous
fantasy of obama saving 2-3 million jobs...just
think how many sam's club staffers would have
lost jobs if prophet obama had not delivered
his indonesian wisdom and reckless spending....
and borrowing a page from the fed lovers, just
think of the imaginary depression from which
bernanke saved us with his heroic and adroit
let-the-laws-be-damned action.....of course we
are in a depression so i don't get the argument...
yes, straw men arguments invite gasoline and
a blow torch....
BLS has it at 11.2 workers...nbd
This company is just another great American success story. Imagine CitiBank selling marked up Chinese crap. Oh yeah they do. Anyway, a 1% decrease in sales so they decide to lay off 11,600 people? They also are laying off people who sell business memberships?
The CEO gets 27 Million a year. Apparently Sam's wife and siblings feel that's a fair exchange in insuring their 100 Billion inheritance stays up in the air.
The one that got me was when the million plus employees decided they needed a real rainy day fund in case a few of their fellow employees needed something like a Heart Transplant or money for one of the other medical emergencies that comes up in a group that large that wasn't covered by the Wal-Mart Plan they couldn't afford, Medicaid they didn't qualify for or the ER didn't cover.
So 5.5 million dollars was raised from 1.2 Million people. One has to wonder if they had an installment plan. God it must have hurt to come up with that $4.58 each.
The Walton's being very busy with , I'm not sure, whatever (counting billions and billions of dollars, telling Carl Sagan jokes) , heard about this and thought "what a wonderful idea". So they got together and as a family decided to contribute. You can imagine the excitement the employees must have felt when their slave driving managers came out and told them the good news. Some probably felt cheered for a split second before another dreary day started of stocking poisonous Chinese goods out of dusty shipping containers in 100 degree heat for a split second of cool air when they got in far enough inside to hand to the better dressed employees who put them on the store shelves.
Then the news of the amount of the contribution was released. Everyone held their breath. Here it comes...$6,000.00!!!! JHC
The Walton's must have had their illegals search all the couches for change dropped by their guests from their various residences to come up with this. I don't know if they forced the employees to put it through the in store changer machines so they could get a slice of the action when it was converted into bills, but it had to be another dour day for the million plus Wal-Mart employees when they heard the news.
I guess then it shouldn't come as a surprise that a 1% sales drop would drive 11,600 marginally employed people into the streets. Those Walton's. They sure are something aren't they?
A "Uniquely American" family
Mitch McConnell said he expects Bernanke will win asecond term
1/24/2010
Alberto
Well, I don't need a crystal ball to see how this week will go: a full-on manufactured stock market crash will afflict the markets right up until our spineless senators confirm BS Bernanke.
Man, it's getting too easy to predict what Goldman... I mean the market, will do.
Bernanke needs to go back to teaching America's youth how to rob the country.
Its going to be a circus watching the pollsters anty up the potential votes, meanwhile, trillions of CDO/MBS/Squared/Cubed and quadrillions in various and assorted derivatives go up in smoke.
LOL.....
Denied. Looks like this is the only "bombshell" that's authorized.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aP_9HPWFuvTQ&pos=9
I imagine we should call for Mr. Axelrod to resign as well. Or at least demand that Mr. Axelrod provide verifiable evidence to show that these bailouts and stimuli helped "avert" a second great depression. Since it seems so clear to these folks, we should expect that response by the end of the week. Thank you.
Oh my, friend Catullus, "Mr." Axelrod? You accord him the kind of respect usually reserved for a kind neighbor? The man is just the worst sort of political weasel. Sadly, the English language still lacks a suitable title for such filth.
I have always looked at him suspiciously since the presidential campaign. Can you shed some more light on this individual?
Let it suffice to say that the man has spent a lifetime in and around politics. First a Chicago political reporter and later a political consultant, Axelrod clearly has never had benefit of wholesome human relationships. Can you imagine decade after decade both writing about such filth and then actually assisting these snakes in attaining their personal objectives, what that might do to the human spirit? You'd do better in a brothel.
cunt! normally works
At least we can sell the helicopter.
Ben deal is in done because the threat posed by gov financial terrorists "...if is not confirmed market will crash."
VIVA LA BUBBLEAMERICA!!
VIVA EL PRESIDENTE!!
As one blogger has been saying since June 2006 (when Hank Paulson became Treasury secretary) Bankers are most dangerous when their back are to the wall.
And with The Helicopter's confirmation vote looming, their backs have never been closer to that proverbial wall.
I expect the following:
1) the prelude - no familiar futures buying come monday morning. the market opens and stays 1-1.5% lower.
2) around mid-day some former fed official and current Goldman VP (or the other way around - former Goldman VP and current Fed official) comes on CNBC and claims end of the world if Ben is not confirmed.
3) maket drops another 1-1.5% after the comments on CNBC to drive home "the message."
4) buffett, bill gross and one of the BlackRock chiefs (in no particular order) issue proclamations in favor of Ben and denouncing non-confirmation gang.
5) market goes up 1.5% after Buffett's "bullish on America, bullish on Bernanke" call, but still ends down for the day.
6) Cramer freaks out, screams "don't buy" until Ben is confirmed, and says a vote "no" means vote against Cramericans and their 401(K)s
7) same s**t will be repeated monday, but with greater volatility.
Let's put it this way--if Bernanke is the only thing keeping your 401K from tanking, we're much closer to the end than we think.
the following from karl denninger: http://market-ticker.denninger.net/
Remember this? $125 billion of "slosh", or excess liquidity, drained from the system in the four days from 9/19 - 9/24/2008.
To put this in perspective that was a drain of sixty-five percent of the total excess liquidity in the system - a "starvation diet" if you will - and that withdrawal was an intentional act!
The above is an irrefutable record of what The Fed actually did.
Remember that Bernanke's argument at the time was that the credit markets were suffering from a lack of liquidity. That is, there was no problem with firms actually being bankrupt, but they were illiquid.
If that's true why did Bernanke intentionally drain $125 billion from the system - two thirds of the market's total excess liquidity - instead of adding to it?
What did the market do after The Fed pulled $125 billion in system liquidity out over the space of four days?
Do you remember?
Does this prove that The Fed intentionally crashed the stock market? No, but it sure is a damning argument - statements of "do what we want or the market will crash" along with claims that "the system is illiquid" coupled with an intentional liquidity drain at the very same time, and leaves open the question as to whether The Fed provided "a damn big nudge" to "emphasize their point."
Remember the events surrounding this withdrawal of liquidity?
On September 7th, Treasury took over Fannie and Freddie.
On September 15th, Lehman failed.
On September 16th, The Fed loaned AIG $85 billion.
And on September 25th, the FDIC stepped in and effectively closed Washington Mutual.
Yet in the middle of this "liquidity crisis", while Ben Bernanke and Hank Paulson were corralling House and Senate leaders in the Capitol and demanded $700 billion in bailouts for Hank's unlimited and purely discretionary use, The Fed inexplicably drained $125 billion from the banking system.
And now they're at it again, with Gibbs issuing thinly-veiled threats that sound suspiciously like the very threats that were made in 2008 - either give the banksters effectively unlimited access to the taxpayer's jugular vein or the market will crash.
One has to wonder:
Three questions remain:
Is not a threat to destroy financial markets along with acting intentionally and directly opposite what you claim needs to happen an act of financial terrorism?
If it is an act of financial terrorism, why has it been ignored for more than a year instead of leading to a full investigation and hearing in front of a Grand Jury?
And finally, is the same thing happening - this time hidden because we can no longer see Federal Reserve liquidity actions in the clear light of day - once again, this time as a means of bludgeoning The Senate into reconfirming a man who is demonstrably unfit for his post?
Is the economy and our market being "pushed" once again?
The hell it doesn't prove that the FED intentionally crashed the market.
Crash the system again. There will just be a small sleight aversion but people will eventually maybe even enjoy eating these people. We can use spices it will be alright and A1 steak sauce. mmmm
I stopped reading market ticker when Denniger couldn't understand that fractional reserve banking means that a bank is inherently bankrupt at all times. It's an issue of people who have a rightful claim to their property demanding it back at the same time (bank run), not lack of liquidity. He's confusing effect with cause..
Destruction of liberty is what the American govt does.
www.ae911truth.org
go man go
www.ae911truth.org is must reading and watching....
people overseas have seen this and believe
that the wtc came down through controlled
demolition with the use of nanothermite.....
the american (boob) still believes the 911 commission
report and the warren commission....
Please stay focused. 911 conspiracy is a red herring, get over it.
as much disdain and contempt i have for douchinger
i believe he deserves a pulitzer prize for this
bit of reporting....
Look....
Why be inconsistent ????
Unlike rats who stop checking for no cheese....
The failed are voted in to keep failing...
Right at this very moment....The polys
cannot even commence to fix the problems
that are the real causes....
Until the real causes of cancer are addressed....
It will not be cured....
The real causes of the problems today are in the mirrors
of the polys....
There is no way that the US is ever going to compete with the likes of BRIC until the tax structure is totally revamped....ie a consumption tax only....
It really does not matter what the poly fail clowns do....until the tax structure is changed to a sole consumption tax....no other taxes....
Why direct funds via the US govt particularly when the funds flow through is highly inefficient and ineffective........and when all of it is nonsustainable ....
Sustainable means the people get the full shot and pay for what they consume....not what somebody else consumes....and the people will better allocate funds to sustainable businesses....Govt. cannot do this....
I will challenge any so called economist or politician to prove otherwise....
If you understood how completely the patricians & statesmen behind the banks see themselves as entitled to the levers of power, then you would understand that nothing is beyond them in their quest to maintain that power. They *must* win at all costs. The rest of us, to them, are just a means to an end - a subject to be taxed, mortgaged, and foreclosed on. Wake up! You think they won't crash markets to corral politicians? Think again.
-u4yeah4
The Fed was the instrument used but we all know there are greater powers "pulling the strings."
No late day support Friday, and look at the futures today... no support at all.
A very clear message... "Play ball, or we bring it down again." We are simply pawns in a mega stakes game that can not end well.
Ben could care less about the purchasing power of the dollar and us peasants that use it, he is more interested in giving massive amounts to bad debts to save mere pennies on the dollar in greedy bankers profits. This man needs to go.
http://talkofliberty.com
The Intrade betting market currently suggests that there is a 93% proability that Bernanke will get confirmed for a second term. If it really is so close as you call; why are you not out there shorting him??
http://url.ie/4r59
P.S I'm not sure that a 93% probability is going to spook the market too much; not least, when it is proably those in the know that are driving the price up this high!!
everyone assumes Ben is the leader of the Hole in the Economy Gang. Bernanke serves at the pleasure of the President. If you want some political intrigue you might wonder whether Obama will pull the rug out from under BB, (like the football coach who gets a vote of confidence two days later he's fired). The Presidents support of Wall Street ahead of Main Street is what cost them MA. With PSOUA on tap for Wed, Obama better pick his words pretty carefully, so carefully that he might actually cut the legs under BB, all the time he is slapping him on the back, and ifhe is the career pol he seems to be he will BLAME THE REPUBLICANS for firing Bernanke, and the stock market crash.
The crash isn't happening because of one man, when the stimulus stops, Wall Street is going to feel the pain. On the other side waiting for them is QEII, and frankly that is the biggest long shot of all right now. To get from here to there is more political capital than Obama has to spend.
write your senators please
So everyone from Buffet, Geithner & Mishkin (“My view is Chairman Bernanke helped save the world from depression,” said Mr. Mishkin, an economist at Columbia University. “Whether you agree with every policy he’s pursued or some of the ways the bailouts were done, the outcome here, given the severity of the shock, is a good one.) are coming out to support Bernanke.
I supposse one might assume that process ends when they make thier case.Things are true because they say they are. The only thing that appears to matter is how many time one says it and how you sound when you say it.
Once again, what specific Bernanke/Fed program prevented the systemic collapse of the financial system? The AIG bailout? Buying Fannie/Freddie paper?
It was the FDIC guarantees of interbank lending (TLGP) and increases in deposit insurance, and the Treasury's equity injections in banks (TARP) and money market guarantees that prevented a collapse. Nothing the Fed did shored up the system. All the Fed did was mis-diagnose a solvency crisis for a liquidity crisis and flooded the banks with cash by overpaying for both their assets and their counterparty claims. This didn't prevent a systemic collapse, it was theft, pure and simple.
As for the GSE purchases, what that mostly did was bail out Fannie and Freddie (who can still afford to pay their executives multi-million dollar salaries). But without Fannie and Freddie, the FHA would have just gotten more business. We can argue about whether or not that would have been a good thing, but the fact of the matter is the mortgage market would have continued to function, albeit with more emphasis on FHA lending. So the Fannie/Freddie purchases also did not prevent the Great Depression.
I fail to see exactly what he did to get all this credit. Sheila Bair did far more than he did, and continues to do more to this day by protecting depositors at each bank failure.
Preaching to the converted ghost. Agree with you 100%.
Look what Shelia is thinking about now:
The U.S. Federal Deposit Insurance Corporation is moving to package billions of dollars of assets from failed banks into securities, in a bid to restart the markets for mortgage-backed bonds, the Financial Times reported on its Web site Sunday, citing unnamed people involved in the discussions. The newspaper said successful bond issuance would mark a milestone in government efforts to purge troubled assets--of which the FDIC holds more than $36 billion on its books--from the banking system. The securitization plan is at a preliminary stage and a decision, which might be made in weeks, will depend on finding a structure to provide enough return to the deposit insurance fund, the newspaper cited the people as saying. "The FDIC is going to be a big issuer in the securitization markets this year," Christopher Whalen, managing director of Institutional Risk Analytics, told the newspaper. "This could lead the way in terms of recreating the securitization market, as the FDIC deals could end up being the new template."
You've outdone yourself, gfi, which 'til now I hadn't thought possible. Thanks for the insights. This one gets cut-and-pasted into that word document I got going...
And generally speaking, this board is outstanding when ego don't rear its head.
You, the reader, should get in touch with Scott Brown's office (I have already done so) and say that he should ask for a delay in ANY vote on Bernanke until he takes his seat. Any other proceeding would be completely undemocratic.
Ask your Senators and Representatives to support a member of Congress for Chairman. This is the only way to bring the Fed back into the real world.
My bet is that Helicopter boy gets another four-year lease on the Huey.
It'll be a close vote - but when the Bankstas goes Gangstas on the politicians, the politicians always cave.
Watch for threats from all the usual suspects about an "impending market crash" if Helicopter boy isn't reconfirmed.
And, I'd watch for a huge leap in short interest across the board all next week and another 150-200 points down on the Dow just to underscore the point.
Remember, what Bankstas wants Bankstas gets.
KptLt. laughing swordfish
9er Unterseeboote Flotille
S&P futures gapped up, even for a Monday, futures gapping 6 points up is as common as a meteor strike. So there you have it, senate pronounces bernanke a shoo-in on all the msm around the world over the week-end, and the fed pumps it up and the case is made once again. The reverse is for the world to imagine. Still want to audit us?
"When you see that trading is done, not by consent, but by compulsion — when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see money flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed."
—Ayn Rand, Atlas Shrugged (1957)
Some quick CAPTCHA calculations yield this scenario:
16 firm NAYS
Likely 10 more NAYS from the re-election pool (20 from this pool have yet to commit 15 of whom will be facing voters)
27 firm AYES, which leaves 47* (100-16-10-27) of which Benny needs more than 70% (or 33 AYES).
*(57 if you don't include my 10 probable NAYS from the re-election pool)
Breaking News:
Rumors have it that there is a pending announcement that Britney Spears is coming out in favor of the Bernanke renomination.
I'll keep everyone posted.
Australian Economist Steve Keen makes the case against BB.
http://www.debtdeflation.com/blogs/2010/01/24/debtwatch-no-42-the-econom...
Ben's in based on NPR today - though he's still a fool, a corporate tool. Should be interesting to watch the markets tomorrow, 1.25.10. Ben is using gasoline to put out the fire. Though the fire is so big, it won't do anything, but bring the entire house down, forever. I think a lot of folks, have forgotten about the root problem, that's still out there, and which is not mentioned anymore, because it's too big for most folks to comprehend: http://www.siliconvalleywatcher.com/mt/archives/2008/10/the_size_of_der.php
Albeit the root, there are other huge problems. Like no industrial base in the US anymore. USA = Roman Empire, in a nut shell. Don't buy it, wait and see.
Australian Economist Steve Keen makes the case against BB
http://www.debtdeflation.com/blogs/2010/01/24/debtwatch-no-42-the-econom...
Tony Froth, inflation hawk.
http://www.youtube.com/watch?v=NIfH0vY2ANA
Stop - Just Stop.
Cloture is a method to curtail doubt, exposure, criticism.
It is political expedience and the FED's modus operandi.
'Undecideds' like Claire McCaskill????
60 was assured the moment Reid scheduled it.
Correction: 60 is assured the moment Reid actually moves for cloture. Until then, they're all politicians and their lips are moving.
Kangaroo court
http://en.wikipedia.org/wiki/Kangaroo_court
JANUARY 24, 2010, 8:19 P.M. ET.AIG Analysis Reveals Bank Discussions
New York Fed Officials Say Getting a Better Deal Isn't Their Job; 'We've Given Up on Concessions'
An analysis put together by a unit of BlackRock Inc., and given to the New York Fed in November 2008, indicated various banks had significant bargaining power with AIG on insurance contracts tied to souring mortgage securities. Without receiving par, or 100 cents on the dollar, for those securities, the parties had little incentive to cancel the contracts, it noted.
BlackRock's analysis, which preceded the regional Fed bank's attempts to extract concessions from AIG's trading partners, also suggested the mortgage securities AIG insured were worth more than what some banks such as Goldman Sachs Group Inc. had priced them at in the fall of 2008.
The 44-page BlackRock presentation was among 250,000 pages of documents submitted last week by the New York Fed to the House Committee on Oversight and Government Reform, which will hold a hearing Wednesday on how and why banks that were AIG's trading partners ended up being paid off in full on $62 billion in souring mortgage derivatives. Critics have argued that the Fed should have forced banks to accept some concessions, or "haircuts."
Thomas Baxter, the general counsel for the New York Fed, recently told congressional investigators that officials felt using their power as a regulatory supervisor to force AIG's counterparties to take less than 100% on the contracts would have been an abuse of authority
http://online.wsj.com/article/SB1000142405274870341580457502374055372754...
More on N.Y. Fed’s Efforts to Keep A.I.G. Details Confidential
As a House oversight committee prepares for a Wednesday hearing over the government’s handling of the American International Group’s bailout — an event that will feature testimony from Treasury Secretary Timothy F. Geithner — more documents are emerging about efforts to keep details of that rescue confidential.
Documents obtained by The New York Times on Sunday disclose correspondence between the Federal Reserve Bank of New York, A.I.G. and the Securities and Exchange Commission over how to keep elements of the bailout from being publicly disclosed. Among them is a request by the New York Fed to the S.E.C. that essentially would have locked up most of the documents pending a confidentiality review.
http://dealbook.blogs.nytimes.com/2010/01/24/more-on-ny-feds-efforts-to-...
and another one bites the dust (congressman):
Arkansas Rep. Marion Berry (D) will announce plans to retire after seven terms, according to two sources familiar with his plans.http://www.politico.com/news/stories/0110/31930.html#ixzz0daOyZbHM
Also this morning McCain said, finance reform is dead. From the newswire, "The supreme court has decided that a corporation and an individual are the same for purposes of assessing limits on political spending in an election." Corporations will now have the equivalent of the right to vote because they will own the government officials. As an individual, I do not have enough money for my vote to count. Next corporations will have a right bear arms.
Well, I wrote both the bitches from NC. One happens to be (ostensibly) male.
Guess I just like pissing into the wind. But hey, electrons are cheap.
July 28, 1983: Paul Volcker, The vote was 84 to 16.
"As of late Sunday, 31 senators were publicly committed to voting for Mr. Bernanke, with 17 opposed, according to a Dow Jones Newswires survey."
http://online.wsj.com/article/SB1000142405274870437560457502353336250206...
If Bernanke is reappointed it will be by a record number of votes against him. This is a no win situation, the market won't like a weak Fed Chairman either. Public support is in the teens, AIG hearing will do even more damage. Better to look for a stronger Chairman IMO.
If Helicopter Boy isn't confirmed -
My vote - Simon Johnson.
Comments anyone?
I would have agree with you until a few days ago, when Johnson recommended Krugman! Given Krugman's repeated statements that the problem is that we aren't spending enough money on this s**thole, that suggests Johnson's view is also continued Keynesianism?! No, he lost me with that choice. Too bad. His views on the corruption of our politics are correct. But a Keynesian route is NOT the way out of this mess.
How to get United States back to the People for Dummies;
1. Audit the Fed and Close the Fed - Job can be done by Treasury and benefit the people of US
2. Pull out of IMF, WTO and United Nations - No requirement in the Constitution to be a member.
3. Pull out all the US troops from foreign countries, only use in direct treat to US citizens, nothing else.
4. Tax cuts and abolish the IRS.
5. Start making SYNTHETIC FUEL OUT OF COAL ( search wikipedia for Synthetic Fuel, will cost around $50 and technology is here) and cut all dependency of Saudi oil.
6. Pull out from CAFTA, NAFTA ECT.
7. Vote out all the goverment and choose only people who look for US interests only
After this, you will have your country back.
Thats the truth and im sticking to it.
hector
I think Marc Faber had it right when he said "Obama makes Bush look like a Genius".
If Obama cannot learn from the Massachusetts Massacre what can you expect from him???
Majority of Democrats will vote for him and the majority of Republicans will vote against. Hopefully causing some head scratching distress for the loyal liberals that dominate this site.
Come on folks - support the nomination made by the president you voted for and love.
Will getting a filibuster help in reducing the majority .. or does it help in that the shameless Ben will resign??
Stone. Cold. Lock.
Thomas Hoenig
With the Mass. surprise uppercut--not the first opening shot from there--the ball is in "their" court. I know what would happen if BB is re-confirmed, nothing. Another day of extend and pretend. (NB: this will not go on forever without a populist reaction that can't be ignored.)
I don't know what would happen if BB were denied, either procedurally or on the merits, but I can well imagine the market's reaction.
Place your bets.
sj is good
Helicopter Ben did not prevent Great Depression II, he just postponed it, and ensured that it will be bigger and last longer.
write your senator.
dear senator you suck ..
and besides that your a dolt
your humble servent
dumpster
IMO, the BB reconfirmation is priced in. The mkt can only selloff if he gets bounced. If you recall, when TARP was shot down, there was a 700 point drop. When it finally did pass, it was followed by about a 2000 point drop. Sentiment has changed and there is very little that can save this market now- not analyst upgrades, not earnings beats of lowered estimates, and not the reconfirmation of the bankers' puppet. I wouldn't be surprised to see a temporary pop when he gets through, followed by more selling. BTW, he will get reconfirmed.
Here we go. No conflict of interest here:
http://www.nytimes.com/2010/01/25/us/25caucus.html
The administration had Buffett & Immelt (AKA CNBC ) lean on senators all weekend in an effort to win the necessary Bernanke votes. I do not know what is more troubling:
a) How blatantly in and in our face the administration and banksters exert their influeneceon a subject the American people are 80% against.Such as bank owned Frank,Gregg, Buffett and CNBC all but assuring you they are convinced what army wins this war.
b) That regardless of how unpopular this subject is even the administration cannot prevent the forces behind the NEED TO REAPPOINT Bernanke
c) They will continue to keep rates at 0% because they are well aware any deviation from this will confirm depression sooner than expected and their only remaining weapon to fight reality is 0% interest rates.
Obama is tying his next election to Bernanke being able to pull off a miracle solely through the use of 0% rates. It is laughable that all these supposed "brilliant" minds have no creative options aside from tax credits and free money for criminal banks. He has all but assured himself no victory in 2012 because regardless of how long they collectively cover their ears, eyes and hide under the covers the monster is getting closer.
Some really interesting lines in that article. For instance saying that the message of Masschusetts voters was "louder than it was clear." Reminds me of someone taking a phone call from someone they know is going to tell them to knock it off and they pretend there's too much static.
"Hello? I'm sorry, I can't hear you. What? Sorry, who is this? Voter who???"
It makes sense for Bernanke to be reconfirmed. Obama has backed him before, and this has pulled our economy from the brink. Yes, we still have a lot of climbing to do, but I think we are headed in the right direction.
http://www.newsy.com/videos/bernanke-s-future-in-question