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When All Else Fails, Monger Fear: Bernanke Says Swap Detachment Rule Would "Weaken Financial System"
Now that legislation to spin off swap trading desk from commercial banks is picking up steam it is time to roll in the big money printers. In a letter to one of his lame duck minions, i.e., Chris Dodd, Bernanke said that daring to change the status quo in any way would like destabilize the system and who knows what would result. In other words: not only in swap-related legislation, but in any proposed rule, such as that long forgotten thing which Barack Obama was parading on national TV 24/7 for about a month known as the Volcker Rule, which seeks to take away from bank revenues, Bernanke will step in and say that even though the proposed rule will make the system safer it will really make it that much more prone to "weakness" (don't think about it too hard - it's so complicated only the Fed and Goldman Sachs understand the vast implications of that statement). Of course, weakness, is simply another word for less than record taxpayer funded annual bonuses. As Bloomberg reports, in his letter, Bernanke says the proposed law “would weaken both financial stability and strong
prudential regulation of derivative activities.” In other words: make sure my banking buddies can continue to rob the middle class blind, or else. Expect another market crash just so Bernanke can prove his point.
More from Bberg:
Bernanke, in a May 12 letter to Senate Banking Committee Chairman Christopher Dodd, said the proposal, part of the Senate financial-overhaul bill, would harm the Fed’s ability to monitor systemic risk among financial institutions. He had previously spoken privately against the proposal crafted by Senator Blanche Lincoln, chairman of the Senate Agriculture Committee.
“Prohibiting depository institutions from engaging in significant swaps activities will weaken the risk mitigation efforts of banks and their customers,” [translation: much less $$$ for my pals Lloyd and Jamie] Bernanke wrote in the letter, according to a copy obtained by Bloomberg News. “Depository institutions use derivatives to help mitigate the risks of their normal banking activities,” he said in the letter, which was also sent to Republican Senator Richard Shelby of Alabama and Senator Kirsten Gillibrand, a New York Democrat.
The provision crafted by Lincoln, an Arkansas Democrat, would bar swaps traders from access to the Fed’s discount lending window and Federal Deposit Insurance Corp. guarantees. Lincoln has fought to keep the proposal in the bill, even as regulators and lawmakers from both parties voice concern that it will force swaps trading into unregulated areas or overseas.
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Trading opportunity; when is the senate debate?
Ben knows who he works for. No surprises there.
Bugger-off Ben.
http://www.youtube.com/watch?v=jbrzZWLu6Qw
Every time I think one of these guys is the biggest a**hole I've ever seen, another one comes along and tops the previous champion.
At this point I care not who the money went to, referring to the Fed audit, I want to know what the banks are doing with it. Bernanke authorized $30 billion for small business. Europe received more than that, but none the less, that is a fair chunk of change.
The sawp desk. Is this where he trades baseball cards?
"The swap desk. Is this where he trades baseball cards?"
The swap desk is where Bennie Bernank-ster trades YOUR baseball cards...
Ever wonder why they keep disappearing?
Sounds spot on for Bernie and the current bubble market like the one that was in for all of us 80's kids and baseball cards (http://www.slate.com/id/2247677)....I wouldn't wipe my ass with a share of NILE and it's going for 60x earnings?
So I must be a contrarian when it comes to cards and comics. The limited amount has always been a driver for me. Well we will see how they are valued when no one wants what used to buy them (FIAT CURRENTSEA), the internet is not a common good anymore, and people either want to be entertained with Spawn and Spiderman, or they want to remember Michael Jordan's SPG in 1987. We will see ;)
Thankfully not! I have my Michael Jordan collection at hand.
"lawmakers from both parties voice concern that it will force swaps trading into unregulated areas or overseas"
Isn't that what they said when they got rid of the laws regarding leverage limits?
At least the overseas part.
Sure Ben the overseas markets and other nations citizens such as Europe would be clamoring for the opportunity to backstop synthetic bets on default.
Big Bank: Hey we got booted out of the derivatives business over in the U.S. would you mind if we parked here in this fine country so that you can pay for our addiction to gambling?
“Prohibiting depository institutions from engaging in significant swaps activities will weaken the risk mitigation efforts of banks and their customers,”
Pretty simple response to that Ben. Maybe they should be taking considerably less risk? Maybe you should have thought about those consequences before you decided to allow them to crash the economy due to risk and shake you down for ZIRP while allowing them to resume building the house of cards and giving them license to increase their leverage even more. Let them spin off and gamble with their own cash as opposed to the U.S. black card.
"Maybe they should be taking considerably less risk?"
Nice, I doubt any of our wonderful congressmen will mention this.
Hey Ben. Your nose is growing.
Bernanke has shown massive incompetence and an enabler for the banks to get rich. Why is he still in his job? I say take a hike Ben! The most "de-stabilizing" factor is you as head of the Fed.
It's hardly incompetence. He's had a job to do - a political job - and he's done it quite well.
Just like Lombardi and the Packer sweep, Ben will keep running the fear campaign until someone stops him.
Bernanke?
Why is Obama still in his job?
Impeach him for Treason.
He's doing exactly the things for which the Fed was created.
"Depository institutions use derivatives to help mitigate the risks of their normal banking activities"
Taking deposits and making repayable loans? Effing moron.
Hey Benron Zimbabwe Bernanke: PHUCK YOU.
Would not surprise me at all if Linoln's opponents have a sudden infusion of campaign cash soon.
Brian Beutler at Talking Points Memo reports that Democrats plan to hold off on altering Sen. Blanche Lincoln’s (D-Ark.) derivatives language until after her primary challenge on Tuesday.
Democrats reportedly want to weaken or strike Lincoln’s provision to force banks to spin off their derivatives desks. Everyone from Sen. Chris Dodd (D-Conn.), who wrote the bill, to Sheila Bair, the head of the Federal Deposit Insurance Co., to the White House, to the banks themselves oppose the measure. Bair and the White House contend that it would actually make derivatives riskier, by allowing banks to move their derivatives tradings operations into subcompanies that might not face strong enough scrutiny. The banks dislike the measure because it promises to undercut their profits. But Lincoln has touted it as demonstrating her populist cred.
http://washingtonindependent.com/84717/sen-lincolns-primary-race-prompts...
When are we as Americans going to hang these traitors like Bernanke already for all their economic terrorism and financial blackmail?
"Hand it all over, or the financial system gets it!", is about the only ploy he has left, and an increasingly desperate one it is.
I'm sick to fucking death of these sociopathic elites going Mongol on our asses, and then trying to convince us that all the raping and pillaging was really for our own good!
Because ultimately that calls for armed revolution, and nobody is willing to take the first step. Everybodie's tummies are still full.
I think you need to listen to Hank Williams Jr.'s song "A Country Boy Can Survive" to get the proper perspective.
Some parts of this country did not have electricity until TVA was formed after the Great Depression. Guns, women and whiskey could be obtained by trading in goods; horses and mules were the first 4-wheel drives.
"Prohibiting depository institutions from engaging in significant swaps activities will weaken the risk mitigation efforts of banks and their customers,”
What mitigation? I only see more risk and more leveraged risk. I'm so sick of their its too complicated only we can understand and solve it attitude. How about a we can prevent it attitude. Fucking Morons anything to keep it going instead of fixing it.
Isn't weakening the financial system the goal?
We need a weaker financial system so the productive sectors of the economy can be unshackled from the oppressive interest slavery that is imposed on them.
Echo echo echo
A weaker financial system? NO. You want a boring, secure, trusted financial system that supports and benifits society. THAT'S the goal.
Either our financial systems serve us, or we serve the financial systems. We all know what we want. SO, how do we make it happen? Can we make it happen?
We ALL know who's winning, so far. If you call FUBARing things up as bad as they have winning, that is.
This is what happens when you put a professor in charge. He does what the traders tell him to do.
Bernanke: Fuck you.
I Don't Care If Dodd IS Leaving Office
Special Prosecutor and if (when) found guilty... bottom bunk in Madoff's cell.
Charges: Financial fraud, political bribe taking (campaign contributions), criminal douche baggery... and he's a dough boy...
What a myopic cunt. I don't care if he's trying to save the system....it's been beyond repair for years.
Syththemic Wisk! Syththemic Wisk!
We need our swaps...Waaaa...How else can we have financial black holes larger than world economy and get bailed again! Waaa! Syththemic Wisk!!! Raise the Jolly Roger Again..They're poised for another CDS margin call party! They don't have the AIG front man this time though...
If the Senators vote against this amendment like they did agaisnt the Vetter amendment they will just be voted out of office. You can see this trend happening very quickly in Pennsylvania and Arkansas. Expect this trend to continue. Every senator who supports anything the FED campaigns for , is as good as gone !!!! Its basically political suicide to support Obama or Bernake's ideaology.
Onetime-Longshots Sestak, Halter May Unseat Incumbent Senate Democrats"Even a month ago, political insiders scoffed at the idea that progressive challengers could unseat Democratic Sens. Arlen Specter (Penn.) and Blanche Lincoln (Ark.).
But fundraising and poll numbers have shifted dramatically in both states, and now both incumbents could well lose their party's nominations in primary elections on Tuesday.
Buffeted by waves of anti-Washington sentiment, both Specter and Lincoln have surrendered their early advantages to Pennsylvania Rep. Joe Sestak and Arkansas Lt. Gov. Bill Halter. A series of polls this week showed Sestak pulling ahead of Specter in Pennsylvania. The latest, from Suffolk University, has Sestak leading 49 percent to 40 percent.
Lincoln's campaign has acknowledged that she will likely have to face Halter in a runoff -- and Halter could win: New polling from Research 2000/Daily Kos has him trailing Lincoln 46 percent to 37 percent, with 11 percent undecided.
In short, Tuesday could well be "a very big day,"
http://www.huffingtonpost.com/2010/05/13/onetime-longshots-sestak_n_5754...
Comment moved to ColonelCooper reply.
The GAO Must Perform a Diligent Independent Audit of the More Than $2 Trillion Issued By the Fed
A must read !
http://www.huffingtonpost.com/robert-auerbach/the-gao-must-perform-a-di_...
Shhh, wait, we're not supposed to be knowlegable about this. Please stop using your instruments of information, it hurts our "democracy".
I desperately cry and hope for destabilization because the “stability” is making the crooks rich and the rest of us poor, while it’s taking away the country.
Sen. Chris Dodd, the scandalized senator who could not run for re-election because he is so corrupt, is the poster child for the kind of stabilization we have. This is the U.S. senator who is in charge of the U.S. financial system. This is “stability” in the flesh. Listen to him; he knows what’s best for us. He can’t run for re-election, of course, because he’s been found out to be a crook…
If I were Bernanke the Crook, I wouldn’t want Chris Dodd the Crook standing next to me—too much of a bad thing isn’t good for you…
Interested in a good example of “stabilization”? Here’s a nice photo of Dodd’s "cozy" Irish cottage on the island of Inishee:
http://www.freerepublic.com/focus/news/2192765/posts
Americans can have a Bank Holiday of their own. Everyone withdraw their cash and store it at home.
Just saw this over on CS - I'm guessing either (1) BS to make it look like the SEC does something besides surf porn, or (2) Gov't actually isn't in on the game and is looking to call out whichever fat finger on pulls the trigger for the next bankster reminder of who is really in charge:
So which is it? Gov't and banksters working hand-in-hand, or Gov't trying to get out from under the bankster's 'nuclear fat-finger' as well as put circuit breakers in place to minimize the damage? Inquiring minds want to know....
http://www.cnbc.com/id/37133357
It's so weird that they're putting their faith in the government. It's like people really, honestly believe that democracy is anything other than a ridiculous set of ritualized formalities designed to make violence predictable and condition society to accept it.
The GAO's job is to suck down taxpayer money, pretend to be significant, and provide the illusion of legitimacy.
When the money drains away, the knives come out. It's pointless to try to convince the robotic mind of the looter that there is a better way after generations of conditioning...
Dodd is a Dud. He doesnt not know his backside from his frontside.
Since he cannot understand or does not wish to understand ( i,e. money contributions decide) Americans will get the raw and pointed end of the stock in their posterior.
America You have very few good Men left to lead you. And if those few do not do something very quickly your demise is virtually assured.
Good Luck