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Guest Post: Bernanke Nomination By The Numbers And What Saves Him

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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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Sun, 01/24/2010 - 15:48 | Link to Comment Charley
Charley's picture

Once McCain announced he was voting against, the obvious conclusion is that the White House has the votes it needs.

Sun, 01/24/2010 - 17:21 | Link to Comment suteibu
suteibu's picture

Astute observation.

Sun, 01/24/2010 - 19:15 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

+11

Did they do a "commencement ceremony" at that moment?  One with say...goats and virgins?

Sun, 01/24/2010 - 15:51 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

"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?

Mon, 01/25/2010 - 07:52 | Link to Comment koaj
koaj's picture

there are  but those would be enforcing the laws are being blackmailed

Sun, 01/24/2010 - 15:56 | Link to Comment dumpster
dumpster's picture

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.

 

 

Sun, 01/24/2010 - 18:58 | Link to Comment Anonymous
Sun, 01/24/2010 - 20:51 | Link to Comment moneymutt
moneymutt's picture

daddy warbucks is whom?

Sun, 01/24/2010 - 15:59 | Link to Comment ozziindaus
ozziindaus's picture

Is there an ETF on Ben? 

Sun, 01/24/2010 - 18:03 | Link to Comment Anonymous
Sun, 01/24/2010 - 16:05 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

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.

Sun, 01/24/2010 - 18:43 | Link to Comment SDRII
SDRII's picture

+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?

Sun, 01/24/2010 - 21:00 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

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.

Sun, 01/24/2010 - 21:07 | Link to Comment moneymutt
moneymutt's picture

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

Sun, 01/24/2010 - 22:00 | Link to Comment greased up deaf guy
greased up deaf guy's picture

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)"

Sun, 01/24/2010 - 16:06 | Link to Comment Anonymous
Sun, 01/24/2010 - 16:10 | Link to Comment Transor Z
Transor Z's picture

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.

Sun, 01/24/2010 - 16:16 | Link to Comment Anonymous
Sun, 01/24/2010 - 16:22 | Link to Comment buzzsaw99
buzzsaw99's picture

I hope Dr. Bernankenstein gets hit by a bus.

Sun, 01/24/2010 - 16:29 | Link to Comment Roscoe
Roscoe's picture

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

Sun, 01/24/2010 - 17:18 | Link to Comment Anonymous
Mon, 01/25/2010 - 05:14 | Link to Comment Hephasteus
Hephasteus's picture

Oh I think I hear Tecumseh beating his drum about to throw down some bad rocks.

Sun, 01/24/2010 - 21:13 | Link to Comment moneymutt
moneymutt's picture

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.

Mon, 01/25/2010 - 03:02 | Link to Comment faustian bargain
faustian bargain's picture

Just sounds like a fanatic to me. There are plenty of BO apologists left who think he can do no wrong.

Sun, 01/24/2010 - 16:31 | Link to Comment goldisok
goldisok's picture

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.

Sun, 01/24/2010 - 19:37 | Link to Comment basehitz
basehitz's picture

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.

 

Sun, 01/24/2010 - 20:18 | Link to Comment goldisok
goldisok's picture

Good stuff !!  I hope he pays attention to his constituents …

Sun, 01/24/2010 - 21:25 | Link to Comment moneymutt
moneymutt's picture

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.

Sun, 01/24/2010 - 22:44 | Link to Comment long-shorty
long-shorty's picture

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.

Sun, 01/24/2010 - 16:42 | Link to Comment waterdog
waterdog's picture

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.

 

 

Sun, 01/24/2010 - 16:42 | Link to Comment joebren
joebren's picture

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

 

 

 

Sun, 01/24/2010 - 17:22 | Link to Comment Anonymous
Sun, 01/24/2010 - 16:55 | Link to Comment pigpen
pigpen's picture

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

Sun, 01/24/2010 - 17:08 | Link to Comment Andrei Vyshinsky
Andrei Vyshinsky's picture

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.

Sun, 01/24/2010 - 17:25 | Link to Comment Anonymous
Sun, 01/24/2010 - 22:53 | Link to Comment Andrei Vyshinsky
Andrei Vyshinsky's picture

Aw, you're just saying this because I'm good looking.

Sun, 01/24/2010 - 19:31 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

AV SOOOO rocks.

Sun, 01/24/2010 - 22:55 | Link to Comment Andrei Vyshinsky
Andrei Vyshinsky's picture

Thank you for the kind words, Mr. Ned.

Sun, 01/24/2010 - 19:33 | Link to Comment Anonymous
Sun, 01/24/2010 - 22:58 | Link to Comment jesus
jesus's picture

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

 

Sun, 01/24/2010 - 17:18 | Link to Comment Instant Karma
Instant Karma's picture

So if Bernanke is not reappointed and Kohn takes over, what's the dif?

Sun, 01/24/2010 - 17:26 | Link to Comment Anonymous
Sun, 01/24/2010 - 17:19 | Link to Comment Anonymous
Sun, 01/24/2010 - 17:26 | Link to Comment deadhead
deadhead's picture

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.

 

Sun, 01/24/2010 - 17:27 | Link to Comment AN0NYM0US
AN0NYM0US's picture

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

Sun, 01/24/2010 - 19:11 | Link to Comment Anonymous
Sun, 01/24/2010 - 19:34 | Link to Comment Miyagi_san
Miyagi_san's picture

BLS has it at 11.2 workers...nbd

Mon, 01/25/2010 - 00:40 | Link to Comment Dburn
Dburn's picture

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

Sun, 01/24/2010 - 17:28 | Link to Comment Anonymous
Sun, 01/24/2010 - 17:47 | Link to Comment Anonymous
Sun, 01/24/2010 - 17:48 | Link to Comment buzzsaw99
buzzsaw99's picture

Bernanke needs to go back to teaching America's youth how to rob the country.

Sun, 01/24/2010 - 17:49 | Link to Comment RobotTrader
RobotTrader's picture

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.....

 

Sun, 01/24/2010 - 18:02 | Link to Comment Unscarred
Unscarred's picture

Denied.  Looks like this is the only "bombshell" that's authorized.

Sun, 01/24/2010 - 17:50 | Link to Comment Catullus
Catullus's picture

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.

Sun, 01/24/2010 - 18:11 | Link to Comment Andrei Vyshinsky
Andrei Vyshinsky's picture

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.

Sun, 01/24/2010 - 18:28 | Link to Comment FoolMeTwice
FoolMeTwice's picture

I have always looked at him suspiciously since the presidential campaign. Can you shed some more light on this individual?

Sun, 01/24/2010 - 19:52 | Link to Comment Andrei Vyshinsky
Andrei Vyshinsky's picture

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.

Sun, 01/24/2010 - 20:31 | Link to Comment boiow
boiow's picture

cunt! normally works

Sun, 01/24/2010 - 18:07 | Link to Comment bugs_
bugs_'s picture

At least we can sell the helicopter.

Sun, 01/24/2010 - 18:08 | Link to Comment Anonymous
Sun, 01/24/2010 - 18:09 | Link to Comment Anonymous
Sun, 01/24/2010 - 20:38 | Link to Comment Anonymous
Sun, 01/24/2010 - 18:15 | Link to Comment doggis
doggis's picture

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:

Did our economy fall down the stairs or was it pushed?

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?

Sun, 01/24/2010 - 18:26 | Link to Comment Hephasteus
Hephasteus's picture

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

Sun, 01/24/2010 - 18:28 | Link to Comment Catullus
Catullus's picture

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..

Sun, 01/24/2010 - 18:31 | Link to Comment strike for retu...
strike for return to reality's picture

Destruction of liberty is what the American govt does.

www.ae911truth.org

Sun, 01/24/2010 - 19:16 | Link to Comment Anonymous
Sun, 01/24/2010 - 19:28 | Link to Comment Anonymous
Sun, 01/24/2010 - 19:18 | Link to Comment Anonymous
Sun, 01/24/2010 - 18:35 | Link to Comment Anonymous
Sun, 01/24/2010 - 18:43 | Link to Comment Anonymous
Sun, 01/24/2010 - 18:45 | Link to Comment Anonymous
Sun, 01/24/2010 - 18:56 | Link to Comment Anonymous
Sun, 01/24/2010 - 18:57 | Link to Comment Anonymous
Sun, 01/24/2010 - 19:01 | Link to Comment the grateful un...
the grateful unemployed's picture

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.

Sun, 01/24/2010 - 19:17 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

write your senators please

Sun, 01/24/2010 - 19:23 | Link to Comment lizzy36
lizzy36's picture

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.

 

Sun, 01/24/2010 - 21:07 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

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.

Sun, 01/24/2010 - 21:48 | Link to Comment lizzy36
lizzy36's picture

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."

Mon, 01/25/2010 - 01:14 | Link to Comment Anonymous
Sun, 01/24/2010 - 19:31 | Link to Comment Anonymous
Sun, 01/24/2010 - 19:34 | Link to Comment laughing_swordfish
laughing_swordfish's picture

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

Sun, 01/24/2010 - 19:41 | Link to Comment Anonymous
Sun, 01/24/2010 - 19:57 | Link to Comment Anonymous
Sun, 01/24/2010 - 21:19 | Link to Comment AN0NYM0US
AN0NYM0US's picture

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)

Sun, 01/24/2010 - 20:44 | Link to Comment deadhead
deadhead's picture

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.

Sun, 01/24/2010 - 20:50 | Link to Comment Anonymous
Sun, 01/24/2010 - 20:54 | Link to Comment no cnbc cretin
no cnbc cretin's picture

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.

Sun, 01/24/2010 - 20:55 | Link to Comment financial illiterate
financial illiterate's picture

Australian Economist Steve Keen makes the case against BB

http://www.debtdeflation.com/blogs/2010/01/24/debtwatch-no-42-the-econom...

Sun, 01/24/2010 - 23:20 | Link to Comment heatbarrier
heatbarrier's picture

Tony Froth, inflation hawk.

http://www.youtube.com/watch?v=NIfH0vY2ANA

Sun, 01/24/2010 - 21:22 | Link to Comment Anonymous
Sun, 01/24/2010 - 21:37 | Link to Comment Transor Z
Transor Z's picture

Correction: 60 is assured the moment Reid actually moves for cloture. Until then, they're all politicians and their lips are moving.

Sun, 01/24/2010 - 22:05 | Link to Comment Anonymous
Sun, 01/24/2010 - 22:09 | Link to Comment Anonymous
Sun, 01/24/2010 - 22:12 | Link to Comment lizzy36
lizzy36's picture

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
Sun, 01/24/2010 - 22:21 | Link to Comment Athena
Athena's picture

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.  

Sun, 01/24/2010 - 22:21 | Link to Comment sysin3
sysin3's picture

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.

Sun, 01/24/2010 - 23:58 | Link to Comment heatbarrier
heatbarrier's picture

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.

Sun, 01/24/2010 - 23:30 | Link to Comment laughing_swordfish
laughing_swordfish's picture

If Helicopter Boy isn't confirmed -

My vote - Simon Johnson.

Comments anyone?

Mon, 01/25/2010 - 08:56 | Link to Comment Anonymous
Sun, 01/24/2010 - 23:36 | Link to Comment Anonymous
Sun, 01/24/2010 - 23:56 | Link to Comment Anonymous
Mon, 01/25/2010 - 00:17 | Link to Comment Anonymous
Mon, 01/25/2010 - 00:26 | Link to Comment Anonymous
Mon, 01/25/2010 - 00:56 | Link to Comment Anonymous
Mon, 01/25/2010 - 01:12 | Link to Comment Anonymous
Mon, 01/25/2010 - 01:21 | Link to Comment Anonymous
Mon, 01/25/2010 - 01:51 | Link to Comment Anonymous
Mon, 01/25/2010 - 02:18 | Link to Comment Anonymous
Mon, 01/25/2010 - 02:44 | Link to Comment dumpster
dumpster's picture

write your senator.

 

dear senator you suck  ..

and besides that your a dolt

 

your humble servent

dumpster

 

 

Mon, 01/25/2010 - 03:54 | Link to Comment GS is short Gold
GS is short Gold's picture

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.

Mon, 01/25/2010 - 08:05 | Link to Comment John McCloy
John McCloy's picture

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.

 

 

 

Mon, 01/25/2010 - 09:10 | Link to Comment Transor Z
Transor Z's picture

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???"

Mon, 01/25/2010 - 18:58 | Link to Comment Anonymous
Do NOT follow this link or you will be banned from the site!