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« Bailout The United States Treasury: The Last Remaining Asset Bubble Is Cracking | Main | New Bank Bailout Bloomberg Video: Complete Interview With Bank of America CEO Ken Lewis. Broadcast Feb.25 »
Thursday
Feb262009

The Bernanke Bailout: 4 Videos From Federal Reserve Chairman Ben Bernanke's Testimony Before The House Financial Services Committee Feb. 24-25. Includes a 7 minute Ron Paul Attack

B-52 Bernanke was back in front of Congress Tuesday and Wednesday testifying in front of the House Financial Services Committee.  You know it's been a long day when Representative Maxine Waters starts to make sense, and very un-true to form, her question is almost comprehensible in the above clip. 

After the jump we have Congressman Ron Paul asking B-52 what it would take for him to realize that his approach to solving the crisis were in fact incorrect.  Bernanke mumbles something about data points and deftly avoids the question.  Paul and Brad Sherman both make mention of the Fed's $10 trillion in bailout committments and wonder why they haven't helped.  B-52 just smiles and mentions the special bailout arsenal he keeps in his office: the Federal Reserve printing press and a tattered paperback copy of 'How to Lose Friends and Not Influence Anyone.'

I wonder how Bernanke feels about Ron Paul personally.  Paul blames the Fed for everything including melamine in moist dog food, so it's always interesting to watch the body language and interplay between these two.

There are 3 more videos inside: 2 from the ever-smiling, fed-loathing Paul including a post-hearing video delivered from his office, as well as the Brad Sherman clip mentioned above.  These are the 4 best looks from the two-day hearing.

 

 

 

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Reader Comments (12)

“Paul blames the Fed for everything including melamine in moist dog food”

Actually the Fed does have a big part to do with melamine in moist dog food, it helped finance the international trade bubble that is now collapsing, especially trade from communist China. Without the Fed, the international trade bubble would never have gotten as big and so the Chinese and the international traders would not have had as big an opportunity to poison dogs

DJF
Feb 26, 2009 at 8:05 AM | Unregistered CommenterDJF
B-52 Bernake..LOL! thats very funny!!
Feb 26, 2009 at 10:27 AM | Unregistered CommenterSanta Monica Monster
@DJF

That was the point I was trying to make. I didn't bother to explain it because I'm a lazy writer by nature.
Feb 26, 2009 at 3:39 PM | Registered CommenterDailyBail
DailyBail has provided a context in past posts that he generally agrees with Ron Paul, so I took the comment about melamine as tongue-in-cheek irony. It seems like a ridiculous claim on the part of Paul but actually has a factual basis. This is compounded by the fact that Paul and Bernake are constantly at odds and Paul has made additional exotic claims about the Fed. You have to love the reaction shots from Bernake after Paul soliloquies [is that even a word?]. The amusing thing to me is they both think they are right and the other idiotic. We'll see how it plays out in the end. Maybe we can schedule a UFC fight between the two.

@DJF
Keep up the great posts.

@DailyBail
Keep up your great work on this site. It is refreshing to be educated and amused about such a depression topic.
Feb 26, 2009 at 6:11 PM | Unregistered Commenterspideydouble
Ron Paul is the bane of other politicians existance...he will be the only one left standing when the barbarians storm the gates...
Feb 26, 2009 at 6:58 PM | Unregistered CommenterAin't Bullshittin'
“Nationalization seems to be a codeword for bailing out the bondholders.”

Brad Sherman nails it! The public is being slowly conditioned to acceptance of the idea of nationalization as necessary, when these banks should be going through receivership. The bond and stock holders must be wiped out. Many of these banks have received guarantees and loans under many of the Fed's emergency lending facilities far in excess of their market capitalization. They are not in danger of becoming zombie banks, they are zombie banks already

“As to the stress fest [Freudian slip] test, I hope that you would respond for the record why you're going to use tangible equity capital rather than tier 1 capital? And, more importantly, given the severity of the economic problems that we've had over the last more than a year I think, why was this stress test not something being done by the bank regulators, why is it something that the new administration is doing?”

Stress fest indeed! More like stress circus. And the public is supposed to be reassured by the results of these stress tests? America is looking increasingly like we have nothing but professional propagandists in the line of the Iraqi Information Minister. I'll take the red pill. The rest of America can continue taking the blue pill, after all, Dancing With the Stars is on tonight. Sad.

Our federal financial regulators are worthless! Name one major catastrophe in the past 200 years they have prevented or one major court case. Nothing. Nada. Have they brought about any transparency to the public? They are purely reactionary and are part of the establishment laissez-faire (or willful blindness) crowd at law enforcement. It is a sad day that we have to rely on State enforcement agencies like the New York State Attorney General's Office and the Massachusetts Securities Division to do anything. To add salt to the wound, many of these State enforcement agencies must contend with federal agency impedance of their efforts at Justice.

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
Predatory Lenders' Partner in Crime
How the Bush Administration Stopped the States From Stepping In to Help Consumers
By Eliot Spitzer
Thursday, February 14, 2008

http://www.nytimes.com/2008/03/10/nyregion/10cnd-spitzer.html?hp
Spitzer Is Linked to Prostitution Ring
By DANNY HAKIM and WILLIAM K. RASHBAUM
Published: March 10, 2008

Notice Spitzer's article was published less than a month before his political assassination by Hakim, Rashbaum, & Co. He ruffled taboo feathers. Another good man bites the dust.

For additional materials, you should see the following documentaries:

Secret History of the Credit Card
http://www.pbs.org/wgbh/pages/frontline/shows/credit/
This documentary specifically mentions some the OCC's prior misdeeds with Providian. They routinely protect the banks and banking interests when they were specifically created to protect the consumer.

Inside the Meltdown
http://www.pbs.org/wgbh/pages/frontline/meltdown/
This documentary specifically implicates Henry Paulson and his association with Goldman Sachs. PBS FRONTLINE makes some of the best documentaries around. If you support their efforts, please consider giving them a financial contribution to continue producing similar material like a documentary on Phil Gramm and deregulation

Enron: The Smartest Guys in the Room
http://www.pbs.org/independentlens/enron/
This documentary gives excellent background on how many of the structured finance products that have since blown up (such as derivatives trading and SPEs) were created with the banks in collaboration with Enron. The banks were the elephant in the room, and by using the same financial alchemy they pioneered with Enron, their losses make Enron and WorldCom losses look like chump change.

Too bad for Morgan Stanley many of the incriminating documents destroyed in the collapse of World Trade Center building 7 on 9/11 were later recovered on backup tapes. I wonder how many other incriminating documents were also conveniently destroyed.
http://www.wallstreetandtech.com/resourcecenters/datamanagement/showArticle.jhtml?articleID=197005766

The Corporation
http://www.thecorporation.com/
This documentary catalogs the history of the corporate charter, legal status of corporate personhood, abuse of post-slavery abolition and civil rights laws, and the perverse incentive of CEO and corporate board members to behave unethically and even illegally to maximize stockholder returns and profits.

Apologies in advance for this lengthy post.
Feb 26, 2009 at 11:27 PM | Unregistered Commenterspideydouble
Speaking of lost documents. I just realized the only half of my posts are going up because I have not been checking to verify that they are posted. You must authenticate on a second page if you post any URLs. I frequently post and then just go read another article. Please be careful to pause and check this. Otherwise, your post could be lost. I just recovered the above post from Firefox using about:cache and some fancy string editing. I am not going to bother with any other of my previous missing posts. You didn't miss much. You should be taking everything I say with a grain of salt anyway. ;)
Feb 26, 2009 at 11:33 PM | Unregistered Commenterspideydouble
“Spideydouble says

They are purely reactionary and are part of the establishment laissez-faire (or willful blindness) crowd at law enforcement. “

Actually laissez-faire is not the policy.

Under laissez-faire anyone could set up a bank or issue securities. If you, or I were to try to set up a bank and do 1/10 what the banksters have done we would be sitting in jail right now. Even if we did honest banking and did not rip off our customers we would be in jail for breaking hundreds of laws and regulations.

Instead we have a system where the government is great at keeping out competitors and sucks as regulating those who are insiders. I think words like oligarchy fit better then laissez-faire.

Goldman Sachs being transformed overnight from an investment bank to a bank holding company is a good example. I am sure that the government has all sorts of rule and regulations on the proper way to be classified as a bank holding company yet somehow they managed to do it overnight. I you are I were to try to become a bank holding company we would probably die of old age before we got permission.

However I will admit that many of these oligarchs and their flunkies love to use the words “laissez-faire” but only when it comes to them getting their special treatment. The same people will also use such words as “nationalization” as long as they once again get special treatment, in that the debts are nationalized while the profits are not.
Feb 27, 2009 at 10:48 AM | Unregistered CommenterDJF
@DJF

"Instead we have a system where the government is great at keeping out competitors and sucks as regulating those who are insiders. I think words like oligarchy fit better then laissez-faire."

100% agree with this. However, I still believe in regulation in principle. You have to have a set of rules by which everyone can play by. The rules will never be perfect, but tend to break down as a result of selective enforcement. I would support offering federal bounties to anyone who can bring down individual's or institutions for egregiously breaking those rules - maybe a percentage of the fine or settlement. You have to give the regulators a better incentive than just a paycheck.

"However I will admit that many of these oligarchs and their flunkies love to use the words “laissez-faire” but only when it comes to them getting their special treatment."

This is the irony I had intended with "laissez-faire" in regards to law enforcement. The insiders give the impression that they are above the law and often receive special treatment. Any rule or model worth having should apply to all, without exception. Otherwise you need to replace or refine the rules or model.
Feb 27, 2009 at 1:35 PM | Unregistered Commenterspideydouble
you guys are great. i appreciate the intelligent commentary and discussion.

@spidey

any lost posts of yours are a tragedy. seriously. i always enjoy reading your stuff. you are a great resource.

thanks for that enron link. it was a good refresher to see that again.

contact me thedailybail@gmail.com i have something to share with you.
Mar 1, 2009 at 7:17 AM | Registered CommenterDailyBail
Excellent post. Things that "it's a wonderful life" never told you.
Mar 2, 2009 at 8:29 AM | Unregistered CommenterCoward
<quote>
I would support offering federal bounties to anyone who can bring down individual's or institutions for egregiously breaking those rules - maybe a percentage of the fine or settlement. You have to give the regulators a better incentive than just a paycheck.
</quote>

Naah, we have enough rules and regulations already - fraud laws would've taken care of all the mess. And why do we need the regulators to go after them - regulators have shown us now many times they're inept bureaucrats. Instead, anyone should be able to go after them - especially the parties victimized. This idea that a "regulator" will do a good job catching the culprit while the victim has to stand on the side waiting for justice to be served only invites problems. Further, bureaucrats are not enticed by "incentives", for the most part they want a cushy, stable job with low stress - if they wanted a job with incentives they'd be working in the private sector already.
Mar 2, 2009 at 5:49 PM | Unregistered Commenterbureaucrat

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