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Friday, November 12, 2010

Screwing America: Ben Bernanke, Federal Reserve and Rocket Dockets

Nassim "Black Swan" Taleb slaps down pointed headed academics like Bernanke, who is determined to blow up the US dollar and bring down the US economy.

Zero Hedge:
Taleb's thoughts on Bernanke and the Fed:

"It seems to me, from what I see, that these people [Bernanke] do not understand risk.”“Did [Bernanke] see the crisis? Did he see the accumulation of hidden risk in the system? No. He was flying the plane and he crashed the plane…"

"[Bernanke] underestimated risk. He is sort of risk-blind from his analysis of the situation before the crisis when he deemed it was the right moderation."

"[Bernanke] reminds me of LTCM people. They had brilliant people with great academic records and they blew up the fund and almost blew up Wall Street….So here we have a symptom that you notice in economic academia of the use of the wrong tools that underestimate risk. I don’t mind someone saying this is a policy, these are the risks, these are the returns, let’s see how it works. Bernanke does not seem to be taking that approach. He is someone who talks about returns without talking about risk. It’s identical to a pilot who is talking about speed -- not talking about safety. The measures he is using, this quantitative easing, may work but should it fail the risks are humongous.”

Taleb on what he believes the Fed should be doing instead:

"It’s not a Fed problem, it’s a deficit problem."

"People want a free lunch. It reminds me of people who lose money in the market and when I was an option trader, people would call me up and ask for a magic way to make their money back. That’s what the Obama team is doing. Instead of accepting that we have a risk problem, we have lost money, and you don’t double up with future generation’s money either by increasing deficits and or debasing the currency. You have to face the saying that there is no free lunch."

“The main problem was risk in the system. You cannot solve a risk problem by risky methods. You have to accept…We’re forcing the Greeks to reduce; ok you spent money you didn’t have; now you’re going to cut down. We're going to have to face the same thing. And you’re going to take pain, it’s painful, but that's life."

"The Fed's business should be price stability; unfortunately their business seems to be price instability."
Chris Martenson / TheStreet:
QE2 Has Lit the Fuse -- QE2 has been described by several major trading partners as "clueless," "abusive," "absurd," and even resulted in a lecture from Greece on the subject of printing. By the time you are getting lectured by Greece on monetary actions it might be time for a bit of self-reflection...

Bernanke's worst nightmare: Ron Paul -- His harshest critic on Capitol Hill, Rep. Ron Paul of Texas, is about to become one of his overseers...

Bloomberg Businessweek:
Why Oil Could Top $100 a Barrel -- The weakening dollar could trigger a steady rise in the price of crude, sending it over $100 next year
The Fed is allowing the big banks to game their system of buying Treasury bonds as part of its Quantitative Easing (QE 2) policy. This lets the Wall Street insiders reap billions in profits at the taxpayers expense.
Zero Hedge:
Is QE2 A Stealthy $90 Billion Gifting Scheme To The Primary Dealers? -- the Fed is effectively allowing PDs [Primary Dealers] to pocket a huge bid/offer spread, which assuming a total size of ~$800 billion (low estimate) of all USTs bought over the (initial) life of QE2, aka QE2.5 and higher pre-extensions, amounts to $50 billion over the next 8 months. Since the money paid out is certainly not that of Brian Sack, but of the US taxpayers, to which the FRBNY [Federal Reserve Bank of NY] has repeatedly demonstrated it has no fiduciary obligation, one can see why it is prudent to ask just how much leakage is occurring as the Fed is monetizing. Surely the Chairman can see why at a time when Wall Street is about to pocket $150 billion in bonuses, America can be a little concerned with the possibility that QE2 in addition to being a blatant debt monetization scheme, is also a direct taxpayer funding mechanism to the Primary Dealers. We hope Congressman Paul will demand an answer to the these questions at first opportunity...
Rocket Dockets are the fast track to covering up massive bank fraud.

Matt Taibbi / Rolling Stone:
Courts Helping Banks Screw Over Homeowners -- Retired judges are rushing through complex cases to speed foreclosures in Florida

The rocket docket wasn't created to investigate any of that. It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes...

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