View Full Version : The Ben Bernanke Chronicles,Here we go Again !

01-14-2009, 11:18 AM
The Bernanke Chronicles

Here is Bernanke's Speech yesterday at The Stamp Lecture in London, and note that while I understand Mish Shedlock has written something on this, I have not read it; any similarities are due to Ben being a total idiot.

I actually watched him present this tome along with the questions and Ben looked like he had sat on a Rhino horn a few minutes prior. Maybe it was still in there. In any event, I feel it is necessary to translate some of the FedSpeak into a common language called English for the benefit of Ticker readers, since FedSpeak is a curious dialect and can be difficult to understand.

Here we go!

"....although the subprime debacle triggered the crisis, the developments in the U.S. mortgage market were only one aspect of a much larger and more encompassing credit boom whose impact transcended the mortgage market to affect many other forms of credit. Aspects of this broader credit boom included widespread declines in underwriting standards, breakdowns in lending oversight by investors and rating agencies, increased reliance on complex and opaque credit instruments that proved fragile under stress, and unusually low compensation for risk-taking."

In English: We had the responsibility to monitor banks, set reserve requirements and keep leverage ratios reasonable. We abdicated all of the above on purpose and got in on the scam because our various Fed Boards are all made up of former, current, or wanna-be-future bankers who make lots of money by cheating the rules of sound banking. This produced a huge credit boom, and it was entirely intentional. Oh, and we knew it would go bust too - we didn't care.

"The abrupt end of the credit boom has had widespread financial and economic ramifications. Financial institutions have seen their capital depleted by losses and writedowns and their balance sheets clogged by complex credit products and other illiquid assets of uncertain value. Rising credit risks and intense risk aversion have pushed credit spreads to unprecedented levels, and markets for securitized assets, except for mortgage securities with government guarantees, have shut down. Heightened systemic risks, falling asset values, and tightening credit have in turn taken a heavy toll on business and consumer confidence and precipitated a sharp slowing in global economic activity. The damage, in terms of lost output, lost jobs, and lost wealth, is already substantial."

In English: CRAP! We were supposed to have gotten all the profits out of the country and into Paraguay, along with numbered Swiss Accounts before this thing went pear-shaped, but we blew it. Those jackass Americans ran out of money to make the payments with before we could complete our scheme.

"The global economy will recover, but the timing and strength of the recovery are highly uncertain."

In English: I'm lying.

"Government policy responses around the world will be critical determinants of the speed and vigor of the recovery. "

In English: Ok, I'm lying unless I can get the taxpayer to take all this crap on and not lynch me. Ok, ok, ok damnit, even then I'm lying, but that way I can get the money out to Paraguay (those bastards at UBS are turning in the people with the Swiss accounts!)

" I will also explain why I believe that the Fed still has powerful tools at its disposal to fight the financial crisis and the economic downturn, even though the overnight federal funds rate cannot be reduced meaningfully further."

In English: The most powerful tool I have is the BS that spews from my mouth, and that happens whenever my lips are moving. See?

"The Federal Reserve has responded aggressively to the crisis since its emergence in the summer of 2007. "

In English: We sure as hell knew it was coming; after all, we created it.

"These policy actions helped to support employment and incomes during the first year of the crisis. Unfortunately, the intensification of the financial turbulence last fall led to further deterioration in the economic outlook. The Committee responded by cutting the target for the federal funds rate an additional 100 basis points last October, with half of that reduction coming as part of an unprecedented coordinated interest rate cut by six major central banks on October 8. In December the Committee reduced its target further, setting a range of 0 to 25 basis points for the target federal funds rate."

In English: We can't possibly let the game end until we get the money out of the United States (and ourselves too.) We got the BLS to lie about employment and incomes have been declining in real dollars since 2000; heh, remember what I said about my lips moving?

"The Committee's aggressive monetary easing was not without risks."

In English: We knew it wouldn't work