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The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Saturday, August 22, 2009

Bernanke calls the shots, Feds: "We win"; Bails : "You lose".

"We saved the world from disaster," said Fed chief Ben Bernanke in a speech in Jackson Hole, Wyoming on Friday.

"The world has been through the most severe financial crisis since the Great Depression," he said. "As severe as the economic impact has been, however, the outcome could have been decidedly worse."

Wow... Only in America, eh?

We saved the world, and in the very next breath, the voice changes from the active to the passive as "The world has been through....

Now what you should notice is that Benron disavows any responsibility for bringing on the greatest financial disaster since the Great Depression, while simultaneously showering himself with praise because he "saved the world".

The other implication you'll miss ... (sorry... but you always do) ... in his self-serving proclamation, is that it's the world he now considers himself responsible for, not the American polity by whom he's employed and from whom he extracts his overpaid salary and benefits, but to whom he has zero accountability, his recent whining, condescending, tax-payer funded, Town Hall dog-and-pony show notwithstanding.

Which, perhaps, is as it should be when you are the steward of the world reserve currency. But what it means in point of fact is that the citizens of the United States have no Central Bank to perform for the American economy what Central Banks in other Nation States do: act on behalf of their own citizens.

The Bernanke Fed has never been held accountable for the debacle it wrought, leaving President Obama hanging out to dry for all its mistakes, forcing him to incur trillions in obligations and never saying a word to his fellow Republicans to shut up or put up. Instead of going on the road with his President, he goes on his own road tour, touting his own superior abilities, without saying a word to the critics of Obama's outsize deficits, with not a peep about how it was HIS policies, HIS responsibilities, HIS mismanagement of the economy that made those deficits necessary and continue to reward the exact behavior that engendered the collapse.

The most egeregious example of this is the valuing of assets held by collateral by the member banks at fantasy levels while denying loans to the homeowners who actually have to make the monthly payments that create the revenue stream that the banks count on. So the bank holds the deed for your house and says it's worth $300,000.00 on their books, in order to disguise the fact that their technically insolvent. You go to them for a loan because you need surgery to remove a cancerous cyst. LOAN DENIED. The reason? The asset you wish to put up for collateral ... your home ... the same home that Bernanke lets the Bank claim is worth $300,000.00, isn't enough collateral for the $150,00o.00 loan that you need to pay for the operation that the insurance company you THOUGHT you were paying insurance to cover, won't pay for.

Because, of course, the banking cartel knows the house isn't worth even the $150,000.00, but you must keep paying the mortgage and taxes on it as if it were still worth $300,000.00, and they can continue to pretend they have adequate capital ratio to cover their mounting losses, but of course, only on FHA government- guaranteed homes sales, despite a capital reserve ratio that's completely inadequate to allow it to make ANY new loans, or even remain in business, the truth be known.

So this is our great, self-proclaimed Savior, Our most Holy Redeemer?

“Bernanke is a source of certainty,” according to Guy Lebas, chief-fixed income strategist at Janney Montgomery Scott LLC., uh-huh. Certain to plunge us into GD2, certain to continue to promote the interests of the rich over the poor, capital over labor, Wall St over Main St., certain to cement the culture of hubris over economic cooperation, of destructive growth over sustainability, of the dominance of financial oligarchy over any voices of democracy in Congress.

Benron recently spouted: "“Our forecast is for moderate but positive growth going into next year. We think that by the spring, early next year, that as these credit problems resolve and, as we hope, the housing market begins to find a bottom, that the broader resiliency of the economy, which we are seeing in other areas outside of housing, will take control and will help the economy recover to a more reasonable growth pace.” (November 8, 2007)

On that same day, Fannie Mae released its third-quarter 10-Q filing, in which it concluded:

"We have also experienced a significant increase in delinquency rates in loans originated in California, Florida, Nevada and Arizona. These states had previously experienced very rapid home price appreciation and are now experiencing home price declines. The conventional single-family serious delinquency rates for California and Florida, which represent the two largest states in our single-family mortgage credit book of business in terms of unpaid principal balance, climbed to 0.30% and 0.99%, respectively, as of September 30, 2007, from 0.11% and 0.37%... We expect the housing market to continue to deteriorate and home prices to continue to decline in these states and on a national basis. Accordingly, we expect our single-family serious delinquency rate to continue to increase for the remainder of 2007 and in 2008...”

Upon perusing the entire report, Doug Noland, of Prudent commented:

"It is difficult for me to believe that the “sophisticated money” will not attempt to be the first ones out of the hedge fund Bubble. Meanwhile, a backbreaking Credit Crunch is about to strangle the U.S. Bubble economy. “Structured finance” is a bust, while the major banks now recognize that this is not a fleeting liquidity crisis. To survive, they will move rapidly to get their risk under control. If there were a more ominous scenario than the one developing, I’ve never thought of it."

This was not a one-time blip, this was a conclusion reached from steady analysis week after week, posted on the internet for free for anyone to read, and anyone with an economists' background couldn't help but see which analysis of the situation in the US was correct.

The re-apppointmnet of Benron is on the same scale of monumental error as the re-election of the man who appointed him, and the calamity it ensures us, on the same scale as the catastrophe, caused by the same arrogant blindness, as 9/11. Both claimed that no one could have seen it coming and ignored the warnings from those that did.

Why would anyone listen to a Benron Forecast? Every time the oracle at the Fed opens his mouth, he's either lieing or wrong, can it be he's sunk to the level of Jim Cramer? Could it be Wall St. uses him as a contrarian indicator? His prognostications are so consistently wrong that there's no other explanation, perhaps that's the certainty Lebas is referrring to.
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