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"HEADWINDS FOR THE CONSUMER" by Jim Freeman
Fed Chief Offers Hint of Rate Cut Bernanke Predicts 'Headwinds' For Consumers By Neil Irwin
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--
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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.
.
.
.
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."
.
.
.
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
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.
.
.
.
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."
.
.
.
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
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.