Bernanke On Bank Bailouts, Repeal Of Glass-Steagall
Video - Bernanke Addresses The Economic Club of New York - Nov. 16, 2009
B-52 spoke yesterday before the Economic Club of New York. You'll notice Maria Bartiromo, upper right, taking copious notes during the 4-minute clip, as she pretends to be a journalist.
Bernanke spent part of a question-and-answer period talking about banks and Wall Street firms being "too big to fail" and the problem of valuing assets on their balance sheets.
He said he hoped that the "too big to fail" doctrine that led to the bailout of major banks and Wall Street firms following the bankruptcy of Lehman Brothers needed to become a "relic" in the future, but that could only happen through the creation of new procedures for closing such firms in a more orderly manner.
"We need to have some alternative to bankruptcy or bailout," he said. "We need to have another way to close firms that come to the brink of failure without destroying the rest of the system."
Bernanke said that he doesn't endorse rolling back the 1999 law that allowed commercial banks to engage in Wall Street trading and investment banking. He said he doubts keeping those restrictions in place would have prevented the crisis in financial markets.
"I don't think simply making banks smaller is going to do it," he said when asked about how to get rid of the reality of "too big to fail."
"Banks can still be systemically critical, even if they're somewhat smaller," he added. He also said that large bank failures are not the only threat to the economy.
"After all, in the 1930s we didn't have too many large bank failures, but we had thousands of small bank failures," he said.
But he said that in the future, regulators of major firms needed to be able to place curbs on banks engaging in trading or investment banking activities on a case-by-case basis.
A year ago Bernanke told the same gathering that what he most wanted was to know what all the so-called toxic assets on major financial firms' balance sheets were worth. Monday he said despite improvements made in judging the value of assets in the last year, "I'd still like to know what the stuff is worth."
Oct 4, 2011 at 6:13 PM
Reader Comments (32)
The funny thing about Ben is that he assumes the "regulators" would have the first clue about what they're doing and would be able to stop "risky behavior" before it causes problems. This is funny because he couldn't see the housing bubble that was blowing up in his face (and on bank balance sheets) until it was far too late to do much about it. What is even funnier is that I called the housing bubble in the summer of 2004. I was in Ireland at the time and it was obvious that the Celtic Tiger would soon be licking its wounds -- inflation was terrible, wages were stagnant for most workers, and houses cost ridiculous multiples of the average working person's salary. At the time, the cheapest house in Ireland was 78,000 Euro and literally didn't have a place to pee -- there was no indoor toilet and the lot on which it sat was too small to install a septic tank. But real estate never goes down! (OK, by "calling" it, I mean I told my wife, but I had no idea that everyone was out there making huge bets on the bubble going on forever, or was lobbying the SEC so that he could lever up his firm 40-1 and blow up the world economy. But I digress.) In any case, we now know that Ben was warned repeatedly, but couldn't see what was plain to the eye for anyone who cared to look.
•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
Bernanke failed to do his job, plain and simple. The worst part is he is trying to parlay that failure into a power grab, and there's people out there willing to let him. This meltdown was the direct result failed regulators, not the regulatory frame work. Crooked cops, not crooked laws. The notion that we are letting these crooked cops re-write the laws is a National tragedy and so few people get it or care.
The repeal of Glass-Stegall was HUGE in the crisis and we should deport anyone who says otherwise. But instead of cleaning house, we keep taking advice from men who have repeatedly betrayed their country. Any country that can't figure out who the traitors are is doomed. It's that simple.
Wall Street's 2012 meltdown sweepstakes
Don't say we didn't warn you this time -- a new crash is dead ahead
LOS ANGELES (MarketWatch) -- It's coming in 2012: Another, bigger meltdown of Wall Street's "too-greedy-to-fail" banks. No, this is not another fanatical warning about that Dec. 21, 2012 end-of-days prediction based on the Mayan calendar, though you may well ask "Who will survive?"
http://www.marketwatch.com/story/the-next-meltdown-is-coming-in-2012-2009-11-17
Bernanke failed to do his job, plain and simple. The worst part is he is trying to parlay that failure into a power grab, and there's people out there willing to let him. This meltdown was the direct result failed regulators, not the regulatory frame work. Crooked cops, not crooked laws. The notion that we are letting these crooked cops re-write the laws is a National tragedy and so few people get it or care.
The repeal of Glass-Stegall was HUGE in the crisis and we should deport anyone who says otherwise. But instead of cleaning house, we keep taking advice from men who have repeatedly betrayed their country. Any country that can't figure out who the traitors are is doomed. It's that simple.
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Extremely well stated...interesting that John Reed understands the problems of repealing Glass-Steagall...here's his apology...
http://www.huffingtonpost.com/2009/11/06/john-reed-former-citigrou_n_348612.html
@ZeroHedge
One month ago, Zero Hedge did an exhaustive examination into the topic of over half a trillion of foreign FX liquidity swaps to central banks issued by the Fed, and how by administering this unprecedented incursion into international monetary policy, Ben Bernanke became the lender of last resort not only to US institutions on the brink, but to all those foreign central banks, and thousands of foreign financial institutions, who were massively short the dollar the last time the bubble popped (ring a bell?). Since we have ended up in the same boat promptly once again, and since the ponzi scheme can only continue so long before all those short the dollar scramble to cover shorts at some point in the future, as Roubini has predicted, it is merely a matter of time before the Fed will need to disburse another trillion or so of FX swaps to bail out all those who are shorting the US middle class into oblivion. We ignore the ethics of bailing out those who have done nothing but piggyback on the dollar carry trade, and in doing so, have decimated the purchasing power of America's working class, which is precisely what Ben Bernanke did. Buying stocks may be patriotic but bailing out those who want your dollar to purchase less tomorrow than it can today, sure does not pass the sniff test (Bernanke, of course, being at the top of that particular food chain).
In order to make sure that the overlord of the Fed will never again risk massive taxpayer money to bail out foreign banks, who only know how to take Barclays' "short the dollar" phone pitches and trade accordingly, Florida Congressman Alan Grayson has introduced an amendment that would moderate unlimited lending to foreign banks by the Fed, and would need Treasury sign-off. If Mr. Grayson can give this the proper patriotic spin, this amendment should have little trouble passing. Yet if it does, watch for the dollar carry trade to implode immediately, as foreign CB's will know they can not rely on the Fed to pump them full of dollars when the margin calls come crashing in and there are no more dollars to be bought in the free market. As the BIS estimated: the total amount of potential dollar funding shortfall could be as high as $6 trillion. Take the Fed out of the equation, and you get just one word: panic.
http://www.youtube.com/watch?v=tfPAnAllAFE&feature=player_embedded
NEW YORK (Reuters) - Sooner or later, office buildings and other commercial real estate financed during the credit bubble will generate hurricane-scale losses for banks.
Banks in recent years have been hammered by losses on home mortgages, buyouts and corporate defaults. Now, lenders face big losses from loans backed by commercial real estate, where a stagnant economy will eventually take its toll, financial services executives told the Reuters Global Finance Summit.
"The commercial real estate business still has not been marked down. It's not been marked to market," Cantor Fitzgerald LP Chief Executive Howard Lutnick said. "The economy can't, in my opinion, grow fast enough that the tenants are going to go out and start hiring and growing and building and take up all these rents at $60 a foot. It's nonsense.
As the Donald would say...Rahm Emanuel, you're fired.
Ha, I wish.
November 18, 2009
Posted by Ben Smith 06:14 AM
Categories:Barack Obama
A firing offense?
Obama, speaking to CBS in Beijing, says he's "furious' about the stream of leaks characterizing the Afghanistan deliberations.
THE PRESIDENT: “I think I am angrier than Bob Gates about it, partly because we have these deliberations in the Situation Room for a reason – because we are making decisions that are life-and-death, that affect how our troops will be able to operate in a theater of war. For people to be releasing information during the course of deliberation -- where we haven’t made final decisions yet -- I think is not appropriate.”
CHIP REID: “Firing offense??”
THE PRESIDENT: “Absolutely"
What's odd about this is that many of the leaks (though certainly not all) have seemed deliberate, in tandem with Flickr photo releases from the meetings and in line with a message that Obama is considering deeply. And indeed, leaking has been a signature of the transition from the Plouffe/campaign era to a governing era run by Rahm Emanuel, who talks frequently to the press and whose hiring was one of the first major Obama leaks. Leaks from more senior officials make lower-level staffers, in turn, feel that it's not actually a firing offense.
BREAKDOWN AT GOLD EXCHANGES
A Jackass article was posted entitled "Hitmen Contracts to Bust COMEX" in May (CLICK HERE), not without a little stir, even a removal of the article 24 hours later by one website due to its controversial subject matter. The article gave warning. The bust cometh, and it will be spectacular. Enemies come to address the state corruption with syndicate entrenched. The stories told in the press will be peculiar, since told by the victimized establishment. The headlines might be a comedy, with phony reports of foreign subterfuge, when the perpetrators are American and English, who operate from the new Axis of Fascism. The focal point for attacks is actually London at their metals exchange.
The common denominator for the parties demanding gold delivery in London is simple: they are all Asians, all, as in all, and the great majority are Chinese. To say the Chinese are trying to bust the government gold gamers who defend the USDollar is a gross understatement. They use USTreasury Bond credit supply somewhat as leverage, to silence the opposition and critics. One can safely conclude that the US and British banks will be broken with the nexus being their gold management, which underpins the USDollar. Other pressure is sure to mount. Not the kind of pressure you might imagine. Pressure is mounting for senior bank executives and politicians to start revealing the identities, deeds, locations, and dates of the gold tungsten swap, the mortgage bond firehose, and other pervasive frauds protected by the USGovt and British Govt. It might even include producing the true location of the Madoff funds.
http://www.marketoracle.co.uk/Article15143.html
Fed balance sheet can be audited, panel says
WASHINGTON (MarketWatch) - A key congressional committee approved legislation on Thursday that would allow for government audits of Federal Reserve monetary policy as well as how much the central bank has lent and will lend to specific banks in response to the financial crisis, despite major opposition from the central bank. The measure, introduced by Rep. Ron Paul, R-Texas, has the support of 309 members of Congress
I am providing this site with some needed direction. James didn't like my posts about ObaMao so I am trying to warn him so he doesn't need any more Tenormin.
I am not concerned with what James points out. I am entitled to my opinion.
I am not obsessed with ObaMao, I am obsessed with Barry Soetoro. I don't do pseudonyms. My real name is Gobias, really!
I don’t condemn your site, I just grumble and grunt about it. You should think of me as Fox’s Geraldo Rivera or MSNBC’s Tucker Carlson (you know, the guy who doesn’t like Jon Leibowitz). Boy was that fun, calling Jon a “pompous jerk”. No, I don’t like Tucker but I give him credit where credit is due. Come on, how else is Tucker going to get written about in the Huffington Post.
As far as not liking you, that’s barmy.
Today Liberty had a small victory
HR1207 DR. RON PAUL amendment passed
Ron Paul introduces HR1207 as a substitute to the Watt amendment during debate 11/19/2009
http://www.youtube.com/watch?v=b_jd7E3Pno0&feature=player_embedded
Ron Paul HR1207 Committee Debate on Watt Amendment: Alan Grayson 11/19/2009
http://www.youtube.com/watch?v=E9CcdiNs5F8&feature=player_embedded
Earlier today, Ron Paul and Alan Grayson sent the following letter to members of the Committee:
Dear Financial Services Committee Colleague:
It is encouraging to see the issue of Federal Reserve transparency receiving so much attention during this current markup. Today we plan to offer an amendment to the Financial Stability Improvement Act that expands on the many extant proposals to enhance Federal Reserve transparency. Our amendment is based on HR 1207, the Federal Reserve Transparency Act, which has broad bipartisan and grassroots support. The bill is cosponsored by 309 Members of Congress, including all Financial Services Committee Republicans and 13 Financial Services Committee Democrats.
Fellow Americas: Please visit
http://www.dailypual.com too to get all phones numbers to scream at Washington Congress and senate to Support Audit the Fed vote DEC1......................
We must keep the pressure up now...........................
Who were the 26 that voted against H.R. 1207.
http://www.youtube.com/watch?v=gavenB_AJ9A
Thanks to Wall Street and the international bankers all of the laws allowing China to enter the US banking industry are already in place.
Thanks to Japan, China has a methodology of using US talent to undercut US businesses such as banking. Greedy bankers do not care where the money comes from. They just care about money.
a) Instead of buying raw materials, China should use the almost $1 trillion dollars that is has collected from the US and the $250 billion it collects every year to buy US banks.
b) China should also put branches of its own banks in the US
c) China should then offer companies that depend heavily on their manufacturing in China very reasonable financing and terms. They can even give those that use China heavily special incentives.
d) China should also get on the consumer's side against the large investment casino banks and offer consumers reasonable interest rates on deposits and reasonable loans.
e) China should not give loans to private equity, brokerages or real estate businesses who are then forced to use the higher cost Wall Street banks and give Wall Street banks all of the high risk loans.
f) China, using its US front people and lobbyists purchased just like the banks do, buy Congressmen.
g) China should buy foreign news media feeding information to the US news media and also establis a beechhead news agency and something a kin to the way USA Today was started.
h) By using their news media and purchased Congressment, China should make "audit the Fed" and "Dismantle the Fed" a reality.
i) Once the Fed is no longer there to protect Wall Street banking criminals China will have the greatest position of influence in the US.
h) If the US government starts getting testy then China should use the debt that it holds and the promise of buying future debt as a hammer.
"Meanwhile, on the inflation front, pipeline inflation is rising. I
noted that in Wednesday's PPI report, finished goods prices were up by
over 6% in the last three months. It is important to consider some of
the adverse consequences of a zero-interest-rate policy. For example,
between Monday and Wednesday, lumber futures prices have been limit up
despite the six-week drop in mortgage applications, weak NAHB
confidence and the other economic whiffs I mentioned; this will hurt
the consumer as well as industrial margins and profits. Inflation must
be contained in order to support the current levels of stock prices."
So, 6% inflation + 10.2% unemployment = 16.2%. This is 2 standard deviations above the mean and a stone's throw from the high 20.46.
Now imagine the numbers with real unemployment@17.5%??????????????????
DOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOM IS HERE
Chinese Compeitition edge
http://www.yayabay.com/forum/viewthread.php?tid=44849
And OBAMA fuck Cap & Trade scam
Impeach OBAMAand fire GEITHNER SUMMERS
3 Jobs Saved
Why not appreciate?
The public is well-justified in viewing The Fed as a "villain" because it is. Whether through active malfeasance or simple idiocy The Fed has been and is directly responsible for the impoverishment of millions of Americans who were punished for their imprudent borrowing while the imprudent lenders, who should have also gone bankrupt, were protected with money extracted by force from the very same people the lenders screwed!
Here's the list of Representatives that voted against stopping the daily violations of America. They voted to allow The Fed to have their way in secret, to debase the dollar and destroy Americans' purchasing power, to double the price of oil and essential energy products, to fund chicanery and even protect those who commit fraud. Worse, they violated their oath of office to uphold and defend The Constitution, which says on this matter:
Section 8. The Congress shall have power to.....
To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
The Federal Reserve does not have the power of currency debasement (or the lack thereof) - Congress does, and with good reason. Congress is accountable to you, the people.
The Fed is, at present, accountable to nobody.
Each and every one of the Representatives listed below, by voting "NAY" today, has violated his or her oath of office, has committed an act of violence against The Constitution of The United States, is unfit for their office, and must resign:
NAY - Rep. Barney Frank, MA
NAY - Rep. Paul E. Kanjorski, PA
NAY - Rep. Maxine Waters, CA
NAY - Rep. Carolyn B. Maloney, NY
NAY - Rep. Luis V. Gutierrez, IL
NAY - Rep. Nydia M. Velázquez, NY
NAY - Rep. Melvin L. Watt, NC
NAY - Rep. Gary L. Ackerman, NY
NAY - Rep. Gregory W. Meeks, NY
NAY - Rep. Dennis Moore, KS
NAY - Rep. Michael E. Capuano, MA
NAY - Rep. Carolyn McCarthy, NY
NAY - Rep. Joe Baca, CA
NAY - Rep. Stephen F. Lynch, MA
NAY - Rep. Brad Miller, NC
NAY - Rep. Al Green, TX
NAY - Rep. Emanuel Cleaver, MO
NAY - Rep. Melissa L. Bean, IL
NAY - Rep. Gwen Moore, WI
NAY - Rep. Keith Ellison, MN
NAY - Rep. Ron Klein, FL
NAY - Rep. Charles Wilson, OH
NAY - Rep. Joe Donnelly, IN
NAY - Rep. Bill Foster, IL
NAY - Rep. Andre Carson, IN
NAY - Rep. Mary Jo Kilroy, OH
NAY - Rep. Jim Himes, CT
Why don't you give 'em a call and tell 'em what you think of 'em.
I'm sure they'd love to hear from you - you can find their phone and fax numbers at http://www.house.gov.
JPM/GS/BERNANKE CRIMINALS NOW scamming USA working class
I want to see what is in the FEDs OFF BALANCE sheet items are. I think they are directly participating in the Market.
Huge outflows in Mutual Funds yet the Market has gone up with all of this selling. Why, inless the FED is Buying, Buying, Buying.
I like Ken's posts so much, I think you should make an entire separate section for him to post on. That way I won't miss anything - Ken's corner or Ken's Lens, something cool like that.
And, I hate to say it guys, but enjoy your Ron Paul legislation while you can. He's been "redistricted" out of Texas by his own party (admittedly they don't like each other very much), unless the lawsuit forces the Repubs to redraw.
Probably won't win president either, realistically. Just too hard to capture the left.
Listed hedge funds, private equity firms, and closed-end distressed asset funds may provide investors with some exposure to these assets
http://www.businessweek.com/investor/content/aug2008/pi20080815_254149.htm
excerpt: In that same roundtable from American Securitization, Ed Gainor, partner at law firm McKee Nelson, remarked "Hopefully, this type of investing will clear out a lot of these bad assets and contribute to jump-starting the market again and providing funding for people who should have home loans."
A little about Mckee and Nelson.
Looking for Distressed Mortgage Opportunities
Listed hedge funds, private equity firms, and closed-end distressed asset funds may provide investors with some exposure to these assets
http://www.businessweek.com/investor/content/aug2008/pi20080815_254149.htm
Excerpt:
While it may be some time before distressed asset investors feel comfortable making bets on mortgage assets, over the longer term the activity is likely to be positive for the overall mortgage market, in our view. In that same roundtable from American Securitization, Ed Gainor, partner at law firm McKee Nelson, remarked "Hopefully, this type of investing will clear out a lot of these bad assets and contribute to jump-starting the market again and providing funding for people who should have home loans."
Note Mckee Nelson in above article and here is more info on them.
http://dealbook.nytimes.com/2008/02/01/small-law-firms-big-role-in-bundling-mortgages/
Excerpt:
In recent years, as subprime lending proliferated, a small law firm played a big role on Wall Street.
The young firm, McKee Nelson, helped investment banks and mortgage lenders bundle home loans into securities – lots of them. Since 2000, McKee has been involved in almost 3,300 deals totaling $2.7 trillion, according to Asset Backed Alert, an industry newsletter.
Now moving ahead to Larry Summers.
http://www.cbsnews.com/8301-503544_162-20025071-503544.html
Flashback:
http://www.nytimes.com/2009/04/06/business/06summers.html?_r=1&ref=lawrence_h_summers
Excerpt: While at Shaw, Mr. Summers also peered into the inner workings of the $2 trillion hedge fund industry, which the Obama administration is now relying on to buy billions of dollars of worrisome assets from the nation’s beleaguered banks.