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Entries categorized as ‘Ben Bernanke’

United States Treasury promises to pay the Fed for Bear Stearns losses

April 2, 2008 · 1 Comment

This is us folks.  The US government, i.e. taxpayers, guarantees the NY Federal Reserve loan of $29,000,000,000 to JPMorgan/Bear Stearns.  Call and write your congressional representatives if you disagree.  Otherwise, you need not do anything.  Click to read the letter →  treasuryletter0308.pdf

Categories: Bear Stearns · Ben Bernanke · Bernanke · Fed · JP Morgan · Treasury guarantee · Treasury letter · bailout · corporate welfare · economic elite · federal reserve · fiscal burden · investment bankers · investment banking · nationalization · socialized banking · socializing losses

March 17, 2008 · 1 Comment

 Jim Rogers’ reaction to Fed moves on Bloomberg  

Categories: Bear Stearns · Ben Bernanke · Bernanke · Bloomberg · CEO compensation · Economy · Fed · Jim Rogers · US dollar · bailout · bank failures · bank nationalization · disaster capitalism · dollar · federal reserve · fiat currency

Bear Stearns worth $2.00 / share

March 16, 2008 · No Comments

And now…..it’s down to $2.00 (sold to JP Morgan and ….the US taxpayers via Fed’s guarantee of BSC liabilities as part of the deal).  This is a 3 month chart.  Wondering how an investment bank worth almost $100 3 months ago is suddenly worth $30 last Friday, and $2 today?  Answer:  reality. 

bsc.gif

Categories: Bear Stearns · Ben Bernanke · JP Morgan · banking system · bear market

The Fed running low on ammunition?

March 12, 2008 · No Comments

The Federal Reserve has certain assets — about $800 Billion in Treasuries.  Once it lends away the additional $200 Billion announced today, and counting the TAFs (Term Auction Facilities), about one-half of the Fed’s reserve of Treasuries will be gone.  This chart shows the Fed’s reserves before this additional $200 billion is given out, so you’ll have to continue that line downwards to imagine what it’ll look like by the end of March:

fedbalancesheet.jpg

Categories: Ben Bernanke · Bernanke · Fed · bank insolvency · bank nationalization · bank reserves · banking system · federal reserve

Central banks cannot prevent unraveling of global economy?

January 27, 2008 · No Comments

Satyajit Das opines that the tools available to central banks are inadequate to address the scope of the global economic problems we face.  The black box or shadow economy may involve the unwinding of “innovative” financial products/derivatives such that monetary and fiscal policy simply will not work this time. 

http://www.boston.com/bostonglobe/ideas/articles/2008/01/27/the_black_box_economy/

Categories: Ben Bernanke · Bernanke · CDO · Fed · PPT · Plunge Protection Team · banks · counterparty · credit derivatives · deleveraging · federal reserve · market manipulation · monetary policy · monolines

Deja vu - Bernanke will prevent (cure?) deflation with a copy machine

January 25, 2008 · No Comments

Way back when he was “just” a Fed Governor, in 2002, Bernanke gave an amazing speech detailing what he would do to prevent or cure deflation.  I read him as saying that he doesn’t think the U.S. will go into deflation because our financial system (banks and household balance sheets) are so healthy (forget that now!).  The other reason he gives is that the Federal Reserve can itself prevent or cure deflation.  Bernanke gives a list of the steps he would take — and it looks as if he’s already several steps down on the list with the TAF auctions.  But never fear, as a bottom line Bernanke thinks we should all be comforted by the fact that if all else fails, he’s got a printing press (oops, a copy machine) to print lots of dollar bills and reinflate the economy. 

It’s true, and worth another close read: 

http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/#f8

Categories: Ben Bernanke · Economy · Fed · banks · bubble · bush economic plan · deflation · economic forecast · economic outlook · economic stimulus · economy 2008 · federal reserve · fiscal stimulus · friedman · monetary policy · money supply · recession · stimulus package

What would Milton Friedman say to Ben Bernanke?

January 21, 2008 · 1 Comment

Milton Friedman died in 2006.  If he were living, what would he say about the current economic situation?

It may be instructive to review what he said about the dot.com bubble in 2000.  Friedman believed that in the event of an equities bubble burst, the Federal Reserve should pour in money to cushion the economy - but not indefinitely.  For example, using the Great Depression as an example, when the bubble burst in 1929, from peak to trough, the equities market lost about 80% of its value over about 3 years.  Friedman believed that had the Federal Reserve followed “correct” policy, the market would have bottomed sooner and not fallen so far.  Friedman was quick to point out that precisely how much and how long to “pour money in” is tricky to figure out, and that the Fed should not pour money in for so long that it creates another bubble. 

Here is part of the transcript from a Hoover Institution (by Peter Robinson) interview with Milton Friedman recorded March 10, 2000:

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Categories: Alan Greenspan · Ben Bernanke · Bernanke · Greenspan · bubble · equity bubble · friedman · milton friedman · monetary policy · money supply

Bernanke, looking jittery and haunted, testifies - open comment

January 17, 2008 · 2 Comments

Watching this testimony live, without benefit of transcript, Bernanke incredibly is saying there will NOT be a recession!  Forecasting slower growth picking up in late 2008.  Some decent questions from Congresspeople re: why would a rebate actually improve economy?  Shift from pro-savings economy to pro-debt, etc.

Comments? 

Why is Bernanke talking so optimistically (yet looking terrible)?

What will Congress do on fiscal side?

Will Bernanke lower rates on 1/30 and if so why?

Cheers!

Categories: Ben Bernanke · Bernanke · Economy · Fed · bush economic plan · economic forecast · economic outlook · economy 2008 · federal reserve · fiscal stimulus