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John Taylor Berates Bernanke's Fed (In 300 Words)

Tyler Durden's picture


Via John Taylor's Economics One blog,

Like many monetary economists, I’ve recently been approached by reporters  and commentators to say a few words about monetary policy during Ben Bernanke’s time at the Fed.  Back in December the Washington Bureau of the Wall Street Journal asked me and others to write a short 300 word statement on the subject, and I have simply re-circulated that in response to further inquiries. Here are the 300 words:

Many will remember Ben Bernanke for classic central bank stabilizing actions taken during the fall 2008 panic, including emergency loans to banks and swap lines to foreign central banks. But historians might also consider actions the Fed took before and after that panic.


During 2003-2005, shortly after Ben Bernanke joined the Board stressing deflationary concerns, the Fed embarked on a very low interest rate policy. The policy was rationalized in part by these deflationary concerns, but it was a deviation from a policy that had worked well for two decades, and it exacerbated the housing boom and led to excessive risk taking.


The inevitable bust and defaults started as early as 2006. But the Fed misdiagnosed the resulting hits to bank balance sheets as a pure liquidity problem, and its initial treatment — pouring funds into the interbank market via the 2007 Term Auction Facility — did little good. The Fed then followed up with an on-again off-again bailout policy which created more instability. When the Fed bailed out Bear Stearns’ creditors in March 2008, investors assumed Lehman’s creditors would be bailed out too. When they weren’t, it was a big surprise. With policy uncertainty reaching new heights, panic ensued.


After the panic, the Fed began to draw down the emergency loans, but then embarked on an entirely unprecedented policy — massive purchases of mortgage-backed and Treasury securities, known as quantitative easing (QE).  The economy has grown slowly with QE compared with past recoveries without QE and far short of the Fed’s predictions. Many argue that QE has not reduced unemployment, but has diminished the Fed’s independence and credibility, offsetting the effects of adopting a numerical inflation target. Now, only a year after the latest round of QE began, the Fed is struggling with how to unwind it, just as many had warned.


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Tue, 02/04/2014 - 18:04 | 4401715 JohnG
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299 words shorter.

Tue, 02/04/2014 - 18:11 | 4401746 negative rates
negative rates's picture

You try to unwind that sucker and then come back and tell me their ain't hell to pay.

Tue, 02/04/2014 - 18:16 | 4401759 Landotfree
Landotfree's picture

The unwinding is the eventually collapse, then comes the fun part liquidation of the walking unfunded liabilities i.e. the result of using the equation.   

Nothing the Fed can do about it, never could.  The Fed's job is simple, keep the system going as long as possible, their job has never been to stop the collapse as that is impossible.

Tue, 02/04/2014 - 18:25 | 4401785 LawsofPhysics
LawsofPhysics's picture

I have been mentioning "walking unfunded liabilities" since the first theft/crash in 2001.  Nobody "gets" it.

Tue, 02/04/2014 - 18:25 | 4401790 SafelyGraze
SafelyGraze's picture

the epitaph has already been inscribed in the waiting stone

He Kicked the Can As Best He Could

Tue, 02/04/2014 - 18:36 | 4401824 economessed
economessed's picture

He Kicked the Can As Best He Could


And that is everything that anyone will ever need to remember about the Bernank.


Mr. Yellen's tombstone awaits a similar inscription:  he waged a personal battle against the second law of thermodynamics as long as he could before his printer caught fire and burned-down the entire nation.

Tue, 02/04/2014 - 18:50 | 4401861 TruthInSunshine
TruthInSunshine's picture

Only slightly off topic given the Obama-Bernanke-Schumer Triumvirate -

"Debt Up $6.66 Trillion Under Obama"

February 4, 2014

- The debt of the U.S. government has increased $6.666 trillion since President Barack Obama took office on Jan. 20, 2009, according to the latest numbers released by the Treasury Department.

When President Obama was first inaugurated on Jan. 20, 2009, the debt of the U.S. government was $10,626,877,048,913.08, according to the Treasury Department’s Bureau of the Public Debt. As of Jan. 31, 2014, the latest day reported, the debt was $17,293,019,654,983.61—an increase of $6,666,142,606,070.53 since Obama’s first inauguration.

The total debt of the United States did not exceed $6.666 trillion until July 2003. In the little more than five years of the Obama presidency, the U.S. has accumulated as much new debt as it did in it’s first 227 years.

Tue, 02/04/2014 - 19:01 | 4401891 NOTaREALmerican
NOTaREALmerican's picture

Re:  $6.666

Yeah,  but who's counting...   Deficits don't matter anymore, remember?

Tue, 02/04/2014 - 19:35 | 4401997 wackydog
wackydog's picture

666, huh?

Maybe that's not a coincidence.

Tue, 02/04/2014 - 21:06 | 4402245 PT
PT's picture

Correct.  The dates over which the summation was taken was not a co-incidence.  They could publish early or wait a bit longer to get the number they wanted.  eg, if they wanted $7T then they could have just waited a few more days.  But it helps to publish when the numbers help emphasize your point.

Tue, 02/04/2014 - 19:52 | 4402037 acetinker
acetinker's picture

"The greatest shortcoming of the human race is our inability to understand the exponential function." -Albert Bartlett  Bammy's a tool for sure, but the debt was gonna rise like this no matter what.

Tue, 02/04/2014 - 21:04 | 4402240 Pareto
Pareto's picture


Tue, 02/04/2014 - 21:38 | 4402351 XitSam
XitSam's picture

And yet NPR was waxing poetical over how the deficit is under a trillion dollars now. 'Praise be to the Great and Wise Obama!'

I barfed before I could turn it off.

Tue, 02/04/2014 - 18:47 | 4401851 NOTaREALmerican
NOTaREALmerican's picture

Something tells me the following generations will be able to embellish his legacy with very creative bullshit.

History is seldom pessimistic.    Humans don't like pessimistic history.  They want heroics.     If it's no heroic, it won't be noted in history.  

Maybe Ben will have a statue in DC someday,  him riding on a printing-press.  

Tue, 02/04/2014 - 21:54 | 4402405 WTFUD
WTFUD's picture

Nope, him jerking off on a printing press!

Tue, 02/04/2014 - 19:51 | 4402040 edb5s
edb5s's picture

Confusion will be my epitaph.
As I crawl a cracked and broken path
If we make it we can all sit back
And laugh.
But I fear tomorrow I'll be crying,
Yes I fear tomorrow I'll be crying.


-King Crimson

Tue, 02/04/2014 - 20:38 | 4402163 acetinker
acetinker's picture

The verse before that sets the stage-

The wall on which the prophets wrote

Is cracking at the seams.
Upon the instruments of death
The sunlight brightly gleams.
When every man is torn apart
With nightmares and with dreams,
Will no one lay the laurel wreath
When silence drowns the screams?
Tue, 02/04/2014 - 18:32 | 4401803 Landotfree
Landotfree's picture

If one does not understand it,  they are most probably a walking unfunded liabilities themselves... lol 

All these people walking around fail to see what column they go to once the system collapses... you are either an asset or a liabilite... no way you support 7+ billion without a fully functioning global credit system.

Plenty of people that think they are assets will have to go once the liquidation process starts.

This restructuring will make the 1923-1950 restructuring look like an ant hill.




Tue, 02/04/2014 - 18:41 | 4401834 NOTaREALmerican
NOTaREALmerican's picture

Re:  This restructuring will make the 1923-1950 restructuring look like an ant hill.

Let hope "they" can delay event that until I'm dead.  

Janet:   More printing,  failure while I'm alive is not a option!

Tue, 02/04/2014 - 22:00 | 4402418 WTFUD
WTFUD's picture

The ' ant hill ' Mob

Tue, 02/04/2014 - 21:05 | 4402238 BringOnTheAsteroid
BringOnTheAsteroid's picture

Here's the way I see it playing:

Fed intervention, Fed intervention, Fed intervention, Fed intervention, Fed intervention, Fed intervention, system still alive: check.

Fed intervention, Fed intervention, Fed intervention, Fed intervention, Fed intervention, Fed intervention, system still alive: check.

Fed intervention, system broken, 1.6 billion rounds of hollow point: check.

Welcome to hell: check.

Tue, 02/04/2014 - 21:41 | 4402363 XitSam
XitSam's picture

If anyone thinks they are going to be unaffected, they are wrong.

Tue, 02/04/2014 - 18:12 | 4401749 Landotfree
Landotfree's picture

I see billions of criminals.

"But historians might also consider actions the Fed took before and after that panic."

The guy is confused, the Fed's only job is simple, convince the other criminals that the helicopters are coming.   So, all I see is criminals trying to convince other criminals that helicopters are coming to save them.   The universe does not really care.  


 “But the plans were on display…”

“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a flashlight.”
“Ah, well, the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.” 
Douglas AdamsThe Hitchhiker's Guide to the Galaxy


Tue, 02/04/2014 - 18:29 | 4401799 NOTaREALmerican
NOTaREALmerican's picture

Re:  all I see is criminals

Criminal is a bit harsh.   The top 10% is simply comprised of the most opportunistic manipulative (and genetically lucky) people of society (not just ours, look at Japan or China or the EU).  

Advanced humans compete by manipulating each other with bullshit.    The smarter humans are those who bullshit the best.   The top 10% is (basically) the best bullshitters of society (or the children of the best bullshitter of past generations).  

It’s not “criminal” to lie.   If it was, society couldn’t exist.  

Tue, 02/04/2014 - 18:35 | 4401808 Landotfree
Landotfree's picture

99.9999+ percent of the world population has or are benefitting from the great Lie.... some more than others... 

A good portion of this population will pay, some won't.   Either way the universe don't give a shit i.e. Math.   People can say it's harsh but that is the cold reality of the situation.

Tue, 02/04/2014 - 18:07 | 4401724 Iam Yue2
Iam Yue2's picture

" Now, only a year after the latest round of QE began, the Fed is struggling with how to unwind it, just as many had warned."

Bollocks, you mean as Zerohedge had warned.

Tue, 02/04/2014 - 18:19 | 4401767 Landotfree
Landotfree's picture

The Fed is not struggling with any unwind... nature and basic Math will take care of that.  

The authors of the articles on ZH are bankers who got kicked out of the club.   They are basically mad that they are not reaping the reward, kind of self serving at this point.

Tue, 02/04/2014 - 18:07 | 4401725 NOTaREALmerican
NOTaREALmerican's picture

Ben did what was required to keep the top 10% living well.   

Nobody - in the top 10% - wanted the top 10% to suffer.   And the top 10% own the government and the wealth of the nation, so only the opinions of the top 10% count (which is what a survival-of-the-fittest society would want - after all, who's "more fit" that those who have all the wealth).  

What else could he do?  Tell the top 10% they are going to lose their wealth?   He wouldn't have lasted very long with an attitude like THAT!

Tue, 02/04/2014 - 18:40 | 4401838 LMAOLORI
LMAOLORI's picture



And that 10% includes member of Congress who also line their own stockpockets 


Tue, 02/04/2014 - 18:08 | 4401728 Charles Nelson ...
Charles Nelson Reilly's picture

No, berating him would be calling him a worthless banker whore who has fucked over millions of people worldwide!

Free Francis Sawyer....

Tue, 02/04/2014 - 21:10 | 4402261 PT
PT's picture


Free Francis Sawyer .... For Fuck's Sake 

Tue, 02/04/2014 - 18:07 | 4401729 Rathmullan
Rathmullan's picture

"Numerical inflation" target based on a contrived and misleading formula that adversely impacts the citizenry in favor of centralized government and the banking cartel. 

Tue, 02/04/2014 - 18:14 | 4401757 akak
akak's picture


"Numerical inflation"

Well, one has to distinguish the fantasy numbers promulgated by the BL(B)S from the REAL inflation numbers somehow.

Tue, 02/04/2014 - 18:45 | 4401836 ebworthen
ebworthen's picture

By design.

Can't think of a better way to bleed the citizenry over generations than to form a non-governmental agency with the name "Federal" in it, have it run by the biggest banks, then loot the Treasury with calculated booms and busts while telling the "folks" that the purpose is to keep inflation down and employment up.

Tue, 02/04/2014 - 18:07 | 4401731 BlueStreet
BlueStreet's picture

When banks don't trust each other it doesn't matter how low the rate.

Tue, 02/04/2014 - 18:10 | 4401734 ArkansasAngie
ArkansasAngie's picture

Okey dokey.

Where do we go from here friend?

And guess what ... Yellen has the same bag of tricks as Bernanke did.  

Color me frustrated at the whole thing.

Tue, 02/04/2014 - 18:10 | 4401735 metaforge
metaforge's picture

How long before Interplanet Janet begins "operation un-taper"?

Tue, 02/04/2014 - 18:15 | 4401756 MeMadMax
MeMadMax's picture

Never. They will keep printing until the lights go out... And then they will get donkeys to power the machines....

Tue, 02/04/2014 - 18:19 | 4401768 Sudden Debt
Sudden Debt's picture


Tue, 02/04/2014 - 18:09 | 4401737 quasimodo
quasimodo's picture

Hopefully this guy drives an old 1980 Impala, 4 barrel carb and no ECM. 


Tue, 02/04/2014 - 18:19 | 4401772 Black Warrior W...
Black Warrior Waterdog's picture

Eff the ABA and Elizabeth Warren. If you must do business with a financial organization, choose a good credit union.

Wed, 02/05/2014 - 07:09 | 4403193 TheGoldMyth
TheGoldMyth's picture
Black Warrior Waterdog Time for a New Theory of Money

By understanding that money is simply credit, we unleash it as a powerful tool for our communities

By Ellen Brown
Global Research, October 29, 2010 29 October 2010

"The concept of money-as-a-commodity can be traced back to the use of precious metal coins. Gold is widely claimed to be the oldest and most stable currency known, but this is not actually true. Money did not begin with gold coins and evolve into a sophisticated accounting system. It began as an accounting system and evolved into the use of precious metal coins. Money as a “unit of account” (a tally of sums paid and owed) predated money as a “store of value” (a commodity or thing) by two millennia; the Sumerian and Egyptian civilizations using these accounting-entry payment systems lasted not just hundreds of years (as with some civilizations using gold) but thousands of years. Their bank-like ancient payment systems were public systems—operated by the government the way that courts, libraries, and post offices are operated as public services today."

Tue, 02/04/2014 - 18:20 | 4401773 Temporalist
Temporalist's picture

Because they're doing such a bang up job at the Post Office already.  Now if they sold gold and silver...

Tue, 02/04/2014 - 18:21 | 4401778 LawsofPhysics
LawsofPhysics's picture

far far too little, far, far too late.  The moral hazard has gone unchecked for far too long now.

Stupid cunt, at least some bankers and politicians went to prison during the S&L crisis.  They are not even pretending at this point, fuck em.

Tue, 02/04/2014 - 18:33 | 4401809 mrdenis
mrdenis's picture

My advice to Ms Warren .....stay away from any steep embankments protected by high fences 

Tue, 02/04/2014 - 18:47 | 4401833 ThroxxOfVron
ThroxxOfVron's picture

"Elizabeth Warren Wants A Public Option For Banking By Using The Post Office"


The FDIC originally covered the deposits of only a single institution: the Postal Savings System.


"The United States Postal Savings System was a postal savings system operated by the United States Post Office Department, predecessor of the United States Postal Service, from January 1, 1911 until July 1, 1967. The system paid depositors 2 percent annual interest. Depositors in the system were initially limited to hold a balance of $500, but this was raised to $1,000 in 1916 and to $2,500 in 1918. At its peak in 1947, the system held almost $3.4 billion in deposits. The system originally had a natural advantage over deposit-taking private banks because the deposits were always backed by "the full faith and credit of the United States Government." However, because theFederal Deposit Insurance Corporation gave the same guarantee to depositors in private banks, the Postal Savings System lost its natural advantage in trust."


Of course, IF the Postal Savings System was reconstituted and provided the infrastructure to manage SS/Disability/WIC/etc.., paying in US Treasury Notes bearing interest or in 'Greenbsacks'; -the likes of JPMChase would not make a cent 'managing' redistribution schemes and would receive none of the BILLIONS in regular FRN deposits they presently enjoy every month under the present system of FED seigniorage and Bankster skimming off Social Servies distributions/redemptions...


Then there is the lovely idea that the Postal Savings System could issue neo-inflation hedgeded currency ( aka forever stamps ) in lieu of FRN that could be traded for goods and services instead of merly redeemed for mail delivery...


Tue, 02/04/2014 - 18:54 | 4401870 NOTaREALmerican
NOTaREALmerican's picture

Re:  the likes of JPMChase would not make a cent 'managing' redistribution schemes

Yeah,  I don't think the patriots who love the glorious private banking system would stand for the creeping socialism of having the evil post office accept savings deposits.   After all, think of all the damage they could do when - instead - the private banking system has a proven track-record of honesty!

Tue, 02/04/2014 - 20:08 | 4402059 ThroxxOfVron
ThroxxOfVron's picture

Also notice that "The system paid depositors 2 percent annual interest."

IF this interest were tax-free ( since the deposit is arguably being held by the US Treasury/Government ) then these savings would in theory be nominally protected against theft via the FED printing press as long as the FED did not exceed the publicly stated 2% inflation target...

Why should SS/Disibility/VA/WIC Recipients be forced to do business with Private Banks simply to cash their checks or hold minimal savings?

.GOV could also have nationalized the bankrupt/bailed-out banks and traded them for the non-marketable securities in the 'SS Trust Fund'...  

It is possible that the profits would accrue to SS and eventually People wouldn't have to pay in, just let the Postal Banking System run surplusses indefinitely and distribute a portion of the interest to share-holders: American Citizen Retirees...

Wed, 02/05/2014 - 00:49 | 4402885 Clowns on Acid
Clowns on Acid's picture

Fuck Fauxcahontas....

Tue, 02/04/2014 - 18:16 | 4401763 Black Warrior W...
Black Warrior Waterdog's picture

Ca. 1925: ''Let me tell you about the very rich. They are different from you and me.''

Tue, 02/04/2014 - 18:18 | 4401764 LawsofPhysics
LawsofPhysics's picture

Interest rates are still too low dumbass.

Roll the mother fucking guillotines, nothing changes otherwise.

Wed, 02/05/2014 - 00:42 | 4402849 TheGoldMyth
TheGoldMyth's picture

Bugger about that. I have discovered the fine art of double posting quite by accident.Now if i could do that with real estate, or use the same dollar to pay two bills i might be getting closer to the secret of banks..


Wed, 02/05/2014 - 00:40 | 4402860 TheGoldMyth
TheGoldMyth's picture

LawofPhysics: Study the fractional reserve banking system.

Tue, 02/04/2014 - 18:17 | 4401765 Sudden Debt
Sudden Debt's picture



Tue, 02/04/2014 - 18:18 | 4401766 MuleRider
MuleRider's picture

I'd like to "berate" Bernanke, Yellen, and Co. first with a broom-handle up the wazoo and then with a bullwhip to the hind-side. 

Tue, 02/04/2014 - 18:44 | 4401810 ebworthen
ebworthen's picture

That's much too friendly, and it spares their lives, but it's a good start.

Tue, 02/04/2014 - 18:20 | 4401769 Temporalist
Temporalist's picture

He's a witch!  Burn him!

Tue, 02/04/2014 - 18:20 | 4401771 Kirk2NCC1701
Kirk2NCC1701's picture

Kirk can berate Bernanke's Fed in ONE WORD, or ONE GESTURE.  Take your pick.

Ditto for Yellen's Fed.

Tue, 02/04/2014 - 18:29 | 4401786 ebworthen
ebworthen's picture

Failing on purpose is the most insincere form of lying.

Tue, 02/04/2014 - 18:25 | 4401789 wretch
wretch's picture

Former official criticizes former official.  Typical.

Party on.

Tue, 02/04/2014 - 18:30 | 4401798 rlouis
rlouis's picture

A clearly rational summary of the Bernank's culpability and stupidity - the ultimate Ivory Tower Savant. Nothing like cutting down a tree and having crash on the house.

I prefer the opening line punctuated thus:

Many will remember Ben Bernanke for classic central bank stabilizing actions taken during the fall 2008; panic

Tue, 02/04/2014 - 18:29 | 4401801 NoWayJose
NoWayJose's picture

If Bernanke would have avoided doing QE3 he might have had a 50-50 chance with the historians.  Now, with QE3 firmly established as a failure, the only thing Bernanke achieved was taking the mantle of 'worst Fed chief' away from Greenspan.  Of course, Yellen has a real good chance to grab the 'worst title' away from Bernanke...

Tue, 02/04/2014 - 18:53 | 4401869 Playtime's Over
Playtime's Over's picture

Screw all this.  I want to know how much longer this plunder can go on.  How many years has it been since the storm clouds massed?  I want to see the sun again. I don't know my country or countrymen anymore.  

Tue, 02/04/2014 - 18:56 | 4401876 NOTaREALmerican
NOTaREALmerican's picture

Re:  I don't know my country or countrymen anymore.  

It will go on until all the loot is looted.   Got any loot left?

Japan has been "going" for 30 years now.   Surely our sociopaths are better than the Japanese sociopaths at looting their country!!

Tue, 02/04/2014 - 20:54 | 4402211 Ropingdown
Ropingdown's picture

To paraphrase:  The Fed can stay irrational longer than you can stay solvent.

Tue, 02/04/2014 - 18:57 | 4401879 Waterfallsparkles
Waterfallsparkles's picture

It is one thing to "HELP" the Market and the Economy.  It is quite a different thing to "BECOME" the Market and the Economy.

Tue, 02/04/2014 - 19:05 | 4401894 Waterfallsparkles
Waterfallsparkles's picture

I think with Bernake concerned about the Great Depression Bust and then Boom.  He actually recreated it.  By giving way too much support after it was not needed.  Creating the same situation as the Great Depression where stocks went up after the crash only to lose all gains after a temporary few years of recovery.

Tue, 02/04/2014 - 19:08 | 4401907 Pareto
Pareto's picture

The FED can change what things look like, but, the FED can never change what things are. (James Grant, 2013).  Nothing further needs to be said.

Tue, 02/04/2014 - 19:19 | 4401929 Onthebeach
Onthebeach's picture



Yellen ‘shock’ after looking behind curtain ….


“There’s an entire warehouse in there but no book of spells! …. Just a printing press and mountains of treasury bonds!!”

How can I possibly get Dorothy home to Kansas now?!

…. and where are her ruby slippers?!


Retired wizard claims “Well, I had the whole thing contained … and that will be stressed in my autobiography ….  Damn these slippers are tight …. time to click my heels three times and see if they work as well as Greenspan’s …”



“There’s no place like Academia (click)…… there’s no place like a TBTF bank (click)…. there’s no place like PIMCO …. that should do it ….well here goes …. (click) …..  


Tue, 02/04/2014 - 19:24 | 4401946 viator
viator's picture

Bail ins baby.

Tue, 02/04/2014 - 19:38 | 4402008 Hayabusa
Hayabusa's picture

The definition of criminal behavior changes depending on who you are, how much you have and who you can influence. Personally I made up my mind a long time ago to adhere to the SAME set of rules THEY do... if only EVERYONE would do likewise this this problem would have been solved a LONG time ago.  It won't be long before the 99% get tired of the double standard and decide there isn't one - then it will get interesting.

Tue, 02/04/2014 - 20:12 | 4402089 rosiescenario
rosiescenario's picture

Greenspam deserves far more blame....Ben's just a minion.

Tue, 02/04/2014 - 20:43 | 4402182 withglee
withglee's picture

If you don't know how to manage a Medium of Exchange, you're going to have a mismanaged MOE. But is it mismanaged? (everyone gains or loses randomly) or is it manipulated? (the 1% always seem to be on the right end of the trade).

Tue, 02/04/2014 - 21:16 | 4402284 Peak Bagger
Peak Bagger's picture

Yes, Calvin Cooledge thought he would be remembered as the President that brought prosperity to all Americans too.  Then the Great Depression happened.  "Bennie and the Ink Jets" did their part as well.  He printed over $10,000 per American during his tenure.  All that freshly printed fiat money with no inflation, no interest rates, and no real jobs.  Damn he's good!!!

Obama has him beat though.  $6.7 trillion in new debt including the U.S. mainstream news meda unreported $614 billion rise in the National Debt just in the last 3 months of 2013.  O has it great.  Over 160 golf outings, basketball a few times each week, dinner with the wife and kids almost every night, no real work to accomplish, and $1.5 bilion in taxpayers' money to spend on himself annually.  African dictators never had it so good!


Wed, 02/05/2014 - 12:28 | 4404228 Winston Smith 2009
Winston Smith 2009's picture

"But the Fed misdiagnosed the resulting hits to bank balance sheets as a pure liquidity problem"

Because their pet economic theory and the models based upon it are garbage. The only reason the oligarchy pretends not to know this is because that garbage theory tells both bankers and pols what they want to hear - that you can borrow your way to prosperity.

Do NOT follow this link or you will be banned from the site!