Archive for the ‘Ben Bernanke’ Category

Obama, Congress, Treasury, Fed: Shameful Mismanagement of Your Money, Recovery

March 19, 2009

If you are a fan of movies featuring a hero who steps forward to add courage, virtue and good thinking to a disaster to make things right; the AIG bonus flap will cause you disappointment and worry.

There are no leading men or heroes here.  Just bad actors.

And the really worrisome point is this: the AIG bonus flap is about is just $165 million out of trillions of dollars now flowing through the decision makers in the White House, Congress, the Treasury and Federal Reserve.

The outrage expressed over the AIG bonuses is like being worried about one molecule on an elephant standing on your food and dying of cancer without  medical attention.

The elephant is the economy and the poorly managed recovery so far.  Money has been hemorrhaging  out of the taxpayers’ coffers and into all kinds of hands you would never approve of — for months — and the president is preaching “transparency.”

The courage, virtue and good thinking so far has apparently only been delivered during carefully scripted TV appearances — and now even Obama and Biden are not allowed out of their bathrooms without telepromters.

Obama, Pelosi: Anything to Win

The root cause of the AIG flap?  The quickly executed and poorly cobbled together stimulus bill for starters.  Nancy Pelosi’s stimulus bill.  Chris Dodd, with help, undoubtedly, inserted language legalizing just the kind of bonuses AIG paid — so everyone who expressed “outrage” from the president on down is to blame for rushing through congress a hash bill of over $700 billion — and then blaming a company that thought they were doing the right thing, the legal thing, the thing they told the Fed about months ago.

And the president is going through the books line by line….

No “lawmaker” admitted to even reading the stimulus before making it a law: which should sound alarm bells that the White House the Congress and all else involved were into a stampede of good intentions which seldom yields good law.  Even the lobbyists couldn’t keep up with the stimulus….

Then add poor performance on the part of those responsible for oversight.

What we have is a witches brew of White House, Congress, Treasury and Fed.

The problem is Obama, Nancy Pelosi, Harry Reid, Tim Geithner, Ben Bernanke and their many munchkins — not mean old AIG executives and lawyers and Wall Street — this time.

Politically, if history is any guide, “No Drama Obama” will continue to receive love and support from an adoring public and media: but he’s the one that slammed the stimulus down the throats of congress and he’s the one that picked Tim Geithner.

The president didn’t create the crisis but he fueled it and pushed hard for speedy action — not well thought out legislation.

We fault the president for not speaking the truth on this, which he is often not very good at.

But we still have hope, which the president often urges, that Barack Obama will come clean with the American people and tell them that the federal government screwed up and can, will and should do a lot better.

By firing Geithner the president can go a long way in quieting this storm.  Standing by this Treasury Secretary just leaves a giant hunk of doubt, suspicion and guilt in the middle of the “recovery” that the president has said requires confidence.

And that doubt is now the elephant in the room.

John E. Carey
Wakefield Chapel, Virginia

Related:
In AIG flap, it’s not just about bonuses anymore

Defining Moment for Obama’s Treasury Secretary

Fed Failed to Tell Obama About AIG Bonuses For Months

Robert Reich: AIG,Transparency, Treasury, Fed: Lost?

http://michellemalkin.com/2009/03/
19/where-in-the-world-146/

Obama, Congress, Treasury, Fed: Shameful Mismanagement of Your Money, Recovery

Fed Failed to Tell Obama About AIG Bonuses For Months

“Dodd The Dodge” — Senator Weasels Away The Truth; And Not Artfully

Dodd Allowed AIG To Thrive in His State, Approved Bonuses: Now Throws Them Under The Bus

Amid AIG Furor, Dodd Tries to Undo Bonus Protections He and Geithner Put In 

Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”?

http://cinie.wordpress.com/20
09/03/19/psssst-theyre-all-lying/

G7 finance ministers reject protectionist measures

February 14, 2009

Rejecting protectionism, the Group of Seven finance ministers pledged Saturday to work together to support growth and employment and to strengthen the banking system so the world can overcome its worst financial crisis in 50 years.

But the bad news continues. The final statement on their two-day meeting in Rome also predicts a gloomy forecast, with the severe economic downturn continuing through most of 2009.

By COLLEEN BARRY and ARIEL DAVID, Associated Press Writers

The G-7 ministers warned that any protectionist measures to boost national economies would only undermine global prosperity. They also stressed the need to support developing countries to prevent the world’s poorest from being the biggest losers in the downturn.

“The stabilization of the global economy and financial markets remains our highest priority,” the statement said, noting that the world’s seven most industrialized countries have “collectively taken exceptional measures” to address the challenges.

The statement endorses the U.S. and British approach to fixing the banking system by recapitalizing banks. The ministers also said a way must be found to deal with the banks’ toxic assets, however no prescription was laid out.

The meeting marked the international debut of new U.S Treasury Secretary Timothy Geithner, who conferred with Federal Reserve Chairman Ben Bernanke as the session began Saturday at the Italian Finance Ministry.

Geithner smiled at cameras, but declined to respond, when asked if any progress was being made.

The G-7 countries urged China to continue allowing its currency to rise in value to even out the world’s massive trade imbalances. But there was no reference to comments Geithner made in Washington that were seen as a strong rebuke of China’s currency policy, which many believe keeps the yuan artificially low to boost exports.

Geithner, who arrived after a week of widespread criticism over the rollout of the administration’s new bank bailout plan, got a boost with Friday’s passage of President Barack Obama‘s $787 billion plan to resuscitate the economy.

But new economic data out Friday in Europe showed the continent’s recession deepening, lending urgency to the ministers’ task.

The ministers from Britain, Canada, France, Germany, Italy, Japan and the United States, along with their central bankers, are looking for agreement on common approaches to the crisis, with the United States pushing for a bold approach to match its stimulus package.

Read the rest:
http://news.yahoo.com/s/ap/20090214
/ap_on_re_eu/eu_italy_g7

Fed Delivers Gloomy Economic Outlook

January 28, 2009

The Federal Reserve, gave a bleak outlook for the U.S. economy, saying that while it expected a “gradual recovery” to begin later this year, significant risks remain.

“Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending,” the Fed said in the statement. “Furthermore, global demand appears to be slowing significantly.”

Fed Chairman Ben Bernanke and his colleagues are battling a three-headed economic monster: crises in housing, credit and financial markets that — taken together — haven’t been seen since the 1930s.

From CNN Business:
http://money.cnn.com/2009/01/28/news/econ
omy/fed_decision/index.htm?postversion=
2009012814

From the Associated Press:
http://news.yahoo.com/s/ap/20090128/
ap_on_bi_ge/fed_interest_rates

Federal Reserve Chairman Ben Bernanke before testifying before ... 
Federal Reserve Chairman Ben Bernanke before testifying before the House Financial Services Committee on Capitol Hill, November 18, 2008.(Molly Riley/Reuters)

Once Banks Are Nationalized, When is the Good Time To De-Nationalize?

January 26, 2009

Even though your government is in discussions and seriously considering the nationalization of U.S. banks, few smart people outside the government are in the mix.  And to find someone thinking about eventual de-nationalization we had to go to Asia and London….

****

By Henry C K Liu
Asia Times

The notion that nationalization is only an emergency measure that can be undone as soon as the economy recovers appears to be wishful thinking. Discussing the US Federal Reserve’s market exit strategy problem, Fed chairman Ben Bernanke said in his London School of Economics Stamp Lecture: “The Crisis and the Policy Response”

Federal Reserve Bank Chairman Ben Bernanke replies to questions ... 
Federal Reserve Bank Chairman Ben Bernanke replies to questions after delivering his speech at the London School of Economics in central London January 13, 2009.(Toby Melville/Reuters)

….

De-nationalization will prolong the recession. Since nationalization of the financial sector had been necessary to save the financial system from imploding, it was not a Keynesian move to stimulate economic recovery, all the misleading euphemism notwithstanding. What the Fed did was to keep the critically ill patient alive with extraordinary measures, even if the cost is a drawn-out long-term recovery that requires hospitalization for the rest of the patient’s life. Small government cannot be restored by big government, even temporarily.

Also, near zero  interest rates can hardly be described as “unattractive” to borrowers.

Read the rest from Asia Times:
http://www.atimes.com/atimes/Globa
l_Economy/KA23Dj02.html

Related:
Obama Gives Nationalization of Banks a Serious Look

Fed’s Bernanke: Auto Makers Have Insufficient Collateral To Assure Repayment

December 9, 2008

Federal Reserve Chairman Ben Bernanke suggested Tuesday that he would be reluctant to use the central bank’s emergency lending program to help struggling U.S. auto companies.

In a letter to Senate Banking Committee Chairman Christopher Dodd, D-Conn., Bernanke wrote that any decision about whether to provide financial aid to Detroit is best left to Congress.

US Federal Reserve Bank Chairman Ben Bernanke pauses during ... 
Federal Reserve Chairman Ben Bernanke

Congress and the White House are pushing to clear the final obstacles to a $15 billion bailout of the auto industry, seeking agreement by the end of the day followed by swift passage.

The chief executives of Chrysler LLC, General Motors Corp. and Ford Motor Co. last week returned to Capitol Hill to again ask lawmakers for billions in emergency aid.

By JEANNINE AVERSA, AP Economics Writer

“The Federal Reserve would be extremely reluctant to extend credit where Congress has actively considered providing assistance, but after due consideration, has decided not to act,” Bernanke wrote Dodd. The letter was dated Dec. 5 and released Tuesday.

A key consideration in letting an auto company draw emergency cash loans from the Fed is whether the company has sufficient collateral or other security to ensure repayment of the loan. “It is unclear whether the auto manufacturers have unencumbered assets of sufficient amount and quality to meet this requirement,” Bernanke wrote.

Read the rest:
http://news.yahoo.com/s/ap/20081209/ap_on_bi_ge/bernanke_autos