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On Friday, the U.S. Federal Reserve released the transcripts from its vital meetings over the state of the U.S. economy from 2007 through 2009.
The transcripts provide a staggering glimpse into the world of a central bank in crisis, or at least the inability for all parties concerned to grasp the problems at hand.
Here are the five most ridiculous takeaways from the Fed Reports.
The Ridiculous Fed
- The Markets Trump the Economy
For anyone who argues that the stimulus plans of the last five years have been little more than gifts to investors than help for the middle class, this is a stunning revelation. On Sept. 16, 2008, the day after Lehman Brothers collapsed, the Fed met to discuss the impact. The word "economy" was used 60 times, while the word "markets" was used 98 times (Consumers were mentioned just 21 times). Three months later, during the Dec. 16 meeting, the Fed used the word "economy" 93 times, while using the word "markets" 175 times.
As we've noted, the Fed's stimulus plans have been a boon for markets. We've seen the Dow Jones recover from March 2009 lows only to soar to record highs in five years. Meanwhile, the economy is teetering, unemployment at the U-6 levels is staggeringly high, and debt levels have reached a staggering $17 billion.
But at least the luxury goods markets are booming (more on that in a moment).
- Did Taxpayers Bail Out a Hedge Fund?
During the Dec. 16, 2008 meeting, Atlanta Federal Reserve Bank President said to Ben Bernanke that "rumors were circulating that a major hedge fund group was about to collapse and that our people were 'in,' so to speak, over the weekend."
Bernanke replied that if there "has been" any intervention in hedge funds that he "is unaware" of it. According to the transcript, this was followed by laughter.
There will be many questions about this exchange in the coming weeks.