What Part Of Bernanke's Secret FCIC Interview Constitutes A Disclosure Of National Secrets?

Tyler Durden's picture

Now that the FCIC has declassified all of its interviews with the people responsible, or profiting, for the housing crisis (among which are those of John Paulson, Hank Paulson, Lloyd Blankfein, Dick Fuld, Jonathan Egol (the man who helped Fab Tourre construct Abacus), Alan Greenspan and of course Agent Orange himself - Angelo Mozilo), there is one interview strangely withheld. That of the man largely at the heart of everything - Ben Bernanke. From Bloomberg: "The Financial Crisis Inquiry Commission, created by Congress to investigate and report on the causes of the market meltdown late last decade, won’t publicly release its full 2009 interview with Federal Reserve Chairman Ben S. Bernanke, a commission spokesman said. The interview is quoted in the congressionally authorized
panel’s final report, which cites the November 17, 2009,
“closed-door” session in 11 footnotes. The Fed chief discussed
a range of topics including the central bank’s failures and why
the government rescued Bear Stearns Cos. and let Lehman Brothers
Holdings Inc. go bankrupt, the FCIC report shows.
" And yet, it appears to contain information so sensitive it would once again rain fire and brimstone on everyone, and like an audio medusa, lead to widespread petrifying contagion everywhere it was heard. Once again we discover that the Fed has learned nothing from the Pittman episode, nor from the Paul campaign to bring some transparency to its actions. We do learn, however, that the Fed continues to believe it is above the people, and that the information it is privy to will never be voluntarily released to those whom it supposedly serves courtesy its three mandates, all of which have the words "Russell" and "36,000" in them.

From Bloomberg:

The FCIC is withholding records when there is “legal or proprietary information in those interviews that meant they could not be made public,” or no audio, transcript or summary exists, Tucker Warren, the FCIC’s spokesman, said after the panel yesterday released more than 300 witness interviews. He declined to elaborate on Bernanke. The interview is among records being transferred to the National Archives that will be made public in five years, Warren said.

“There’s absolutely no reason to hold it,” unless it contains proprietary details about banks or international trading, said University of Texas Professor Robert Auerbach in Austin, a former congressional economist and author of the 2008 book “Deception and Abuse at the Fed.” “Bernanke will be long gone when it comes out, and that’s not a way to establish responsibility,” Auerbach said.

In the unreleased interview, Bernanke also criticized credit-rating companies, discussed how he underestimated effects from the subprime-mortgage crisis and said the central bank’s lack of aggressiveness in mortgage regulation “was the most severe failure of the Fed in this particular episode,” according to the report. Bernanke told the FCIC that after Lehman failed, the Fed was concerned Goldman Sachs Group Inc. would “go under.”

The FCIC’s meeting with Bernanke lasted 90 minutes and was held at the commission’s eighth-floor office near the White House, according to Bernanke’s daybook from the Fed.

But don't worry - Ben is not being singled out. There are other whose disclosure, were it made public, would destabilize the financial system, as nobody can trust those peasants for being able to think for themselves.

“There are others that are at a Bernanke level that won’t be made public as well,” Warren said. “Bernanke is not being singled out in that regard.”

This tendency to classify Fed releases, however, is quite odd - because even the man who singlehandedly profited to the tune of $15 billion from Bernanke's lack of oversight and ability to think clearly, John Paulson, blames the Fed:

John Paulson, whose Paulson & Co. hedge fund made $15 billion betting against subprime mortgages in 2007, said better oversight of home loans by the Federal Reserve System would have helped prevent the crisis.

The Federal Reserve did have oversight for the mortgage area, and there was very little oversight given in the mortgage area,” Paulson said in an October 2010 interview released today by the Financial Crisis Inquiry Commission on its website. “Demanding that proper underwriting guidelines be followed, not allowing ‘no doc’ loans, requiring a down payment, even if it’s just 5 percent,” would have gone a long way toward preventing the crisis.

The lack of underwriting standards, excessive leverage at banks, and financial institutions that sold derivatives without having sufficient equity are among the main reasons for the crisis, he said in the interview with commission, which was charged by Congress with delving into the origins of the 2008 financial collapse.

Paulson said his firm researched the mortgage markets in 2005 and early 2006 and found subprime loans had “no underwriting standards at all.” Mortgages underwritten in 2006 were inferior to those from earlier periods, he said.

“None of this made any sense to us,” Paulson, 55, said, recounting his experience obtaining three mortgages before the housing boom. “When I purchased my home it was very strict underwriting standards. I had to provide two pay stubs, two years tax returns, three months of bank statements, all sorts of credit card information.”

“If you had margin requirements against derivatives AIG could have never happened,” he said.

And now that the FCIC is shutting down after spending an $8 million budget to uncover absolutely nothing new, the only real question is what is in the unreleased "disclosure." But that would likely cost Phil Angelides another several million, in order to commission a San Fran Fed study on the impact of releasing the only information that is relevant. So, as usual, it is better to not ask questions, and to leave it to our betters and smarters to do what they are truly good at doing: stealing from the middle class in broad daylight, with threats that any change to that particular status quo would lead to global assured destruction, and a world in which the reason for the existence of central banks is, even more, put into question.

We can't wait for the next iteration of the FCIC, some time in 2 years, when instead of housing, the topic under discussion is just when did we allow the market to be overvalued by a few million percent, and just why is the S&P at zero.

Full collection of public interviews and transcripts from the FCIC.

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props2009's picture

Obama to cut deficit by a previously unheard amount 1.1 trillion. 



Dollar bullish?

Snidley Whipsnae's picture

Not a lot of info there. Basically says O is going to double the size of 'non discretionary domestic spending' cuts that he proposed some time ago.

I take that to mean cuts in SS, Medicare, et al? Or, perhaps a continuation of the freeze that has been on SS for the past couple of years?

So far, the 'cuts' or 'freezes' do not seem to be strengthening the dollar.

I disagree that this will do anything to check the rise of gold and PMs in general. Asia and the ME cares not what O does with minimal fiscal cuts while Ben is printing like a wild man.

China wants a reserve of 10,000 tons of gold and they are accumulating as fast as possible. Their accumulation will overwhelm any little fiscal cuts O makes.

raya123's picture

Dollar bullish, gold bullish, and bearish for equities.

Snidley Whipsnae's picture

I don't get the 'dollar bullish' part. Ben is printing to keep the economy on life support.

Those in the world buying the most PMs are aware of the printing, in all fiat currencies, and are going to continue to move into hard assets, and commodities, not currencies.

The US equities mkts will do ok as long as the printing/POMO continues...unless we experience a black swan...and, even black swans in the ME, near the large oil exporters, do not move the equities mkts negatively.

Turd Ferguson's picture

All ZHers, please take time to read this. Tyler, you may use this as a guest post if you'd like.


Snidley Whipsnae's picture

Excellent link TF. Thanks...

and, as you can see from the posts above O is currently running up the flagpole a proposition to double the cuts in 'non discretionary domestic spending'...which I take to mean SS, Medicare, et al.

SS cuts along with increasing food prices will definitely effect many retired people on fixed or dropping incomes...

Once again the pols/bankers have privitazed the gains and are in the process of socializing the losses... Enough already.

topcallingtroll's picture

There aren't any SS cuts for the blue hairs.  The boomers will get everything.  they are the last to have defined benefit plans.  Now they are so expensive anyone under 48 to 50 can't get one in the private sector, yet the younger ones are expected to pay for this with lower salary gains.  The blue hairs will also get all the social security and medicare they have been promised.  The cuts are only for the younger crowd who has the double insult of having to accept cuts in benefits while simultaneously going into debt or paying more in taxes so the old people don't have to sacrifice.

I say raise the retirement age to 67 immediately and cut all benefits ten percent now.  Medicare goes into strict HMO status now with real cuts and rationing.  That way the boomers can share in the sacrifice too.  There is an intergenerational war going on that no one has heard about (except the boomers and the AARP army), and the boomers are winning.  The greatest transfer of wealth in history is unfolding right in front of us.  Selfish old farts.

The generation before you was the Greatest Generation.  Your generation?   History will judge you as the Selfish Generation.  It won't take an actuary to figure out what you have done to our future.  You have endebted generations.  That will be your legacy.  Thanks a lot old farts.

TheGoodDoctor's picture

Since I am not there in that age group, I would prefer to opt out taking my money with me so that I can do with it what I please. Thank you very much. By the time I retire I will have that money cranked up way more than the interest the SS Dept. will provide via "inflation protected interest" LOL. Anyone want a COLA? :P

skipjack's picture

Hello to another math-challenged fool who doesn't know his facts yet feels compelled to spew his ignorance.  Question: how old is the oldest Boomer ?  Which generation is the one that's collecting now ? 


Let me help you out.  The oldest Boomer started collecting in 2010, just in time for the SS "fund" to show its first deficit.  Yes, that's right, the Silent generation is the one that's looted SS/Medicare.  The funds have already run out long before the Boomers got there.  Same with defined benefit pensions.  Have you ever heard of Governor Christie and his message to NJ public unions ?


So try a little thinking and research before you open your piehole and display your bottom rank IQ.  But really, who cares ?  SS/Medicare were always a Ponzi from day one and that was long before the first Boomer was born.

StychoKiller's picture

It's not like anyone couldn't figure it out either:

 "Dreams Come Due, Government and Economics as if Freedom Mattered",
 by John Galt, ISBN: 0-671-61159-3

The book is dated, but a lot of what it has to say is still relevant.

Bitch Tits's picture


You reap what you sow.

tellsometruth's picture

Good work as usual Turd Ferguson...

"Big hat its funny"

Hook Line and Sphincter's picture

Excellent reminder to kick it into gear and remind my friends 'one more time' (a few have actually mentioned they got wind of the recent seizures of pensions in Europe...which is waking them up). Thanks for your service Turd.

snowball777's picture

Source: physorg.com...whom I love dearly, but would not trust to know anything about budget cuts in the least.


Rainman's picture

The Obeyme plan proposes to cut $1.1 trillion over a decade. That's $100 billion per year......an amount he commited just last week to internet for all and high speed rail. Drunken sailors are misers compared to this guy. The sailors always quit spending when they run out of money.   

Lapri's picture

Usual trick. It is not to "cut", but "save".

So $110 billion per year less spending THAN ORIGINALLY PLANNED, and call it "reduction".

Obumbum is going to spend, say, $400 billion more each year, instead of $510 billion more, and call the difference a "budget cut".

cossack55's picture

"Destroy evil before it destroys you"

                          Anyone with a f*cking brain

Snidley Whipsnae's picture

Once again the gov appoints a commission to whitewash the actions of it's own.

If the commission had found any wrong doing they would certainly claim that it was done for national security's sake.

So, some fat cats raked in a measly $8 Mil. Just what they needed!

Move along, nothing to see here.

Misean's picture

If the extent of the Ponzi were revealed, the plebes might know how to game the system.

Snidley Whipsnae's picture

I think not. It is difficult to tell information from disinformation.

Only a fool would risk capital on info released that cannot be confirmed...Of course, there are plenty of fools available.

dick cheneys ghost's picture

is bernake the new Mubarak?

what ups up with all the tax havens?



dark pools of soros's picture

the Bernake is really an Anunnaki and was speaking in his normal dialect..  which always translates in wallspeak to BTFD 

Sean7k's picture

From what I understand, we would have been one of their least creations, but great in number. I think that is how you make slaves, yes?

Sean7k's picture

When tyranny becomes commonplace, an unopposable force in our everyday lives, our only two choices become equally unpalatable: status quo or revolution. Until our masters make their odious rule unbearable, we will continue to see the same devices trotted out to pacify the protestations of the few. 

Snidley Whipsnae's picture

Is their odious rule unbearable yet? I see little evidence of Americans protesting or doing anything but whining on the internet and glued to the tv.

Of course, lot-0-people lining up at the gov trough for their stipends.

If the stipends stop we will probably see some real action.

Sean7k's picture

Probably not as long as the government continues to fund the lifestyles of the poor and desperate.

topcallingtroll's picture

I am ready to see the government put a stop to that.  If you are unable to support yourself and do not have family to support you, then you need to be on birth control before you get any government cheese.

StychoKiller's picture

Birth control -- bah!  Spayed or Neutered!

MachoMan's picture

Presuming a citizen has the capcity to bind him or herself, I see no problem with the government incentivizing persons to undergo surgery to stop their reproductive capacities...  if the offer isn't enough, the government won't find many takers...  simple as that.

I fear, of course, we'll be tying the tubes of more than a few neighbors to the south...  so be it.

The reason this is not done is because the government is designed to create more dependents...

tellsometruth's picture

thanks for brng for attention to this...Benny Boy lovers to claim transparency right now in th cspan spotlight...this was up on gata too

buzzsaw99's picture

the world is getting sick of the bernank and his puppeteers.

amanfromMars's picture

Who wants to bet on Paulson & Co. and the Fed and Bernanke not being in a conspiracy to, well ...... make $15 billion from Bernanke's lack of oversight and ability to think clearly, is a good start, and easy money.

Don't you just love these rigged games where all the suckers lose and you can cry ...... national security interest, we is a just a bunch of bad crooks.

TheGoodDoctor's picture

It's all the taxes the govt. makes from the rigged ponzi scheme that makes it all worthwhile.

BennyBoy's picture

Secrets are the new currency.

Like tungsten is the new precious metal.

Waterfallsparkles's picture

The question I have had for a long time is where was the FED in 2008?  Why did they not support the Market THEN?  Why did they allow it to fall as far as they did?  Did they particiapte in the decline in the Market to allow the Big Banks to get bigger and get a MEGA payday from the American Taxpayers?

I was a time when the Mega Banks aquired Mortgage Companies and Investment Banks.  JPM aquired Bear Stearns, Washington Mutual.  Bank of America aquired Countrywide and Meril Lynch.  So the Mega Banks grew while everyone else went under.  If the FED had supported the Market then the Banks would not have been able to aquire the companies they did for almost 0. 

They also allowed most investors accounts to be almost wiped clean.  Especially anyone that invested in Bear Stearns, Washington Mutual, AIG, FRE, FNM, Mbia, Abk, Pmi, Rdn, etc.

So, my question has always been did the FED allow 2008 to happen?  If not then why did they not support the Stock Market THEN and why are they supporting it NOW?

the grateful unemployed's picture

I considered the financial crisis (and the Feds intervention) to be preemptive moves. GS stock was still around $130. (I think they were defending that as much as anything). So the question begs, did they push the economy over the edge, and was it for political purposes (poison the ground for the Obama administration) and to cover their tracks, which were deeply leaning toward criminal prosecution.

For years the Fed has been rationalizing "emergency" procedures, into policy. I think they took a giant step that day, but while firmly under the wing of the UST, as the Fed lost what was left of its independence under Bush, whose minions sought to politicize everything. Thats the story in short. The manufactured financial crisis was very much Iraq II, the mother of all economic war. And the recent quote from Bernanke somewhat confirms that we will hold the system hostage, and that we have the resources to outlast any other country in a meltdown.

topcallingtroll's picture

we can definitely outlast any other country in a meltdown.  It is time to continue to take this war to china!

the grateful unemployed's picture

that's the way the world melts down, and BB has been given his orders

props2009's picture

Tyler any chance that we can have a look at the Noyce charts for this week.


I am keenly waiting to see how the yield differences between euro and dollar land play out. My view is that yield difference will preced over soverign concerns in euro land and hence spurring euro gains. maynot be in immediate week though

Paul Bogdanich's picture

"We do learn, however, that the Fed continues to believe it is above the people,"


What's not to beleive?  There was bank fraud on a trillion dollar scale, in the mortgage market it is continuing, not a single criminal referral or prosecution let alone conviction and all this courtesy of a direct order from the administration.  Ergo, the bankers and by extension the Federal Reserve are truly above the law.  A classic case of Fuhrerprinzip.  All the rest is merely propaganda to obscure that fact from the masses. 

Twindrives's picture

Don't forget Obama, he thinks he is above the law right with the Fed and the bankers.

Twindrives's picture

Don't forget Obama, he thinks he is above the law right with the Fed and the bankers.

agrotera's picture

Soon the FCIC will ban Michael Lewis' book The Big Short , too.  

Everybodys All American's picture

The government was concerned Goldman would fail. Yes it was Hank Paulson who gave his friends at Goldman the life boat in the form of over the overnight lending facilities of a bank holding company. Trust me Goldman and Morgan Stanley were trading to zero without the Hankster.

Twindrives's picture

Like I said, don't cut Obama any slack. 

He's an accomplice in that he appointed government goons like Hank Paulson to prop up their banker friends and screw the citizens.   Let's just call it like it is.  The U.S. government, the Fed, and the bankers are all in on the feeding frenzy to devour citizens wealth, or what's left of it.  Your government is a bigger threat to you and your family than Al Qaeda ever was or ever will be. 

snowball777's picture


Given your tenuous grasp on reality, I think we'd all be well-served by putting the rest of your opinions in the round file too.

onarga74's picture

You're right. The  Graham Leach Bliley Republican business friendly bill passed during the Clinton administration (the source of the tragedy). The government is not as much a threat by itself. Our government is too stupid and slow to wreck the economy. Plus, it can be changed.  Bush had a 2 trillion dollar surplus and handed Obama a freakin national train wreck.  Don't blame the firemen. Time to think wasn't one of the options.  With the government you still have a vote. When money is in control you get a fee instead of a tax and  no way of stopping the increases.

Stevm30's picture

Where's Wikileaks when you need them?

gwar5's picture

The Fed and the cartel of banks is nothing less than a shadow government that is allowed secrecy and invasions of individuals not even reserved for intelligence agencies. 

The Fed: They are unelected individuals, foreign and domestic, who have their own lobbyists, they won't allow themselves to be audited, they won't allow the American people to audit their own gold in their possession, they determine domestic policy, they determine foreign policy, they determine the value of money, the determine how much money is in the hands of the average individual, they can restrict private non-bank loans adn non-bank activity, they can monitor your personal banking activity in real time, and all this while they themselves insist on remaining completely unaccountable and invisible to most people.

Bitch Tits's picture

If money makes the world go 'round and banksters hold the money, who do you suppose is in control around here?

The banksters know where all the money is and they know who holds it and they know its provenance, too.