Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend  
Printer Friendly Page Save As Favorite Save As Favorite View Article Stats
7 comments

Exclusive to OpEdNews:
OpEdNews Op Eds

"HEADWINDS FOR THE CONSUMER" THE FED'S BEN BERNANKE DESCRIBES A HUGE FINNANCIAL CRIME AS A "HEADWIND"

By (about the author)     Permalink       (Page 1 of 1 pages)
Related Topic(s): ; ; ; ; ; ; ; , Add Tags Add to My Group(s)

View Ratings | Rate It

Become a Fan
  (2 fans)

opednews.com


Fed Chief Offers Hint of Rate Cut Bernanke Predicts 'Headwinds' For Consumers

Washington Post Staff Writer
Friday, November 30, 2007; Page D01

The chairman of the Federal Reserve said last night that the central bank would take into account recent deterioration in the financial markets as it decides whether to cut interest rates next month.

. . . But he said household spending appears to be softening, and that "the combination of higher gas prices, the weak housing market, tighter credit conditions and declines in stock prices seem likely to create some headwinds for the consumer in the months ahead."
--read entire article--
____________________________________________________________
Well, American business certainly won't tolerate a head wind. No matter there was an outrageous lack of any wind at all blowing against the Fed-supported loan of trillions to those who had no collateral.

Any garden-grade bank examiner would have exposed that failing, but they called it a sub-prime loan instead of "pounding money into a hole in the sand"--while paying themselves to do it. Greenspan 'didn't see it coming' just as he failed to see the misguided tax refunds or the dotcom bubble.

Now, with the holiday season upon us, Greenspan is gone and Ben Bernanke, instead of seeking indictments for the swindlers who gamed America's financial system, drums his fingers nervously on the desk and looks for loopholes. Various banks and financial institutions across the world are quite logically taking a bath for their bad judgment and co-conspiracy.
No problem there--make a bad call and pay for it--that's how financial institutions used to run.
Yet there is more to this 'bad call' than has been allowed to meet the public eye. This was a swindler's call, a deliberate sucking of invented value from a market vehicle that had no value.

Those are things people in a regulated society go to jail for.


This Ponzi scheme was largely enabled within and hidden by the hedge fund industry, an almost totally unregulated and opaque system of various financial slights of hand--inventions, if you will, for extracting money by promising returns on investments no one understands.

Ask Ben Bernanke to explain the theory behind the derivative contracts and various leverage instruments that sliced and diced worthless mortgages, allowing a profitable and giddy game of musical-chairs until the music stopped. He won't be able to make it make sense. It was not designed to make sense. It was designed to take 2% off the top and 25% off growth, even if the growth was a lie.


Enron and Charles Keating's S&L scandal were small potatoes compared to this and no one is going to jail. It's going to be fixed by interest rates instead of litigated in federal courts. There is no move to restrain a reoccurence; such inventive derivative schemes as (who knows?) selling luxury cars to the indigent, who have no driver's licenses. "Money to be made there, trust me, we'll arbitrage the whole thing and sell it to the Chinese."

This is not my personal wild-eyed claim. Read up on hedge funds and their $100 million-a-year managers. Neither Congress, the investing public nor the Federal Reserve knows what the hell they are, much less what they are up to.

They are exempted from oversight, yet they are the most volatile and coercive force in markets today. They have a hundred (or maybe a thousand) times as much potential leverage and influence on the market as pre-1929 margin requirements had--yet they are entirely unregulated. Who figured that one out?

I will tell you who. Those who would bury all vestiges of FDR and thereby set us up for an international crash that will make '29 look like a walk in the park.

Bernake is trembling. He doesn't know what the hell to do. The Fed has never been scammed on this large a scale and here he is, new guy on the job. Probably $1-1.5 trillion has gone missing
  • from the major investment banks (so much for investment)
  • from mortgage originators who provided money on negative net worth
  • sucked into the black-hole of fees, charges, extraordinary expenses, commissions and various other special charges
And now--while the dollar is shivering on the brink of total worldwide collapse--Mr. Bernanke wants to continue bailing a shipwrecked economy, just so the inevitable doesn't happen for the moment.
Rather than discipline a market that has none, rather than pursue and jail the greedy who made up this economic confection for their own purposes, rather than instill some Alan Greenspan-neglected logic on a system run amok, this appointed defender of the national money system is about to distort it further.
Interest rate cuts will follow, to take a long overdue (but-necessary) headwind and turn it into a hell-with-the-torpedoes tailwind. Knowing not what to do, Bernanke can't resist juicing an already over-juiced economy.
The Fed, through the Greenspan Years, did so well holding down inflation that a 1970 $10,000 Mercedes S-Class sedan now costs $70,000 and a quarter million bucks buys a 'starter home.' Wages, in real terms have declined so no one in these times can 'start' a starter home, even on two salaries.
But we allow this outrage to continue, jaws dropped and eyebrows raised, as Bernanke, the investment banks and hedge funds pick the last crumbs from our pockets.

And yet they meet, these Federal Reserve Board members. They pontificate in guarded tones and stroke their chins. They look pleadingly to Benjamin Bernanke and call it oversight.


* For more in-depth articles by Jim on Things That Make Me Nuts, check out Opinion-Columns.com

 

http://www.jim-freeman.com

Jim Freeman's op-ed pieces and commentaries have appeared in The New York Times, Chicago Tribune, International Herald-Tribune, CNN, The New York Review, The Jon Stewart Daily Show and a number of magazines. His thirteen published books are (more...)
 
Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Contact Author Contact Editor View Authors' Articles

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

WASHINGTON POST DEAD-WRONG IN CHILD PORNO EDITORIAL

The Trans Pacific Partnership, Yet another Opportunity to Chop-Shop America

Eric Holder Exposes A Nation of Law, Going Lawless

Liar's Poker at the Federal Reserve--"Can't anybody here play this game?"

Dressing Up Space Defense in Dominatrix Clothing

ARRIVAL TIME, 2010; A VIABLE THIRD-PARTY OPTION

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
6 people are discussing this page, with 7 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

mainstream media (& Bernanke, of course) insis... by Richard Mynick on Friday, Nov 30, 2007 at 12:06:14 PM
Great article and website, Jim The Banksters ... by Kent Welton on Friday, Nov 30, 2007 at 12:23:28 PM
Damn right - why aren't these criminal looters... by Ed Encho on Friday, Nov 30, 2007 at 6:59:43 PM
Picture the people...America's working men and... by boomerang on Saturday, Dec 1, 2007 at 8:36:42 AM
ten times as many apply to become Americans as we ... by Jim Freeman on Saturday, Dec 1, 2007 at 9:49:34 AM
Overall, the effects of US policy in Latin America... by Richard Mynick on Saturday, Dec 1, 2007 at 11:32:51 AM
On the money Jim.  A doff of the cap to you.&... by davy on Saturday, Dec 1, 2007 at 4:05:50 AM