Postcards from the florida republic: An independent and profitable state of mind. Forget the “dual mandate” you learn about in high school social studies - the entire purpose of the Federal Reserve is to hide the very inflation they influence. For roughly 17 years, the Fed never openly admitted it engaged in “inflation targeting” starting […]Ben Bernanke
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Here’s Why Inflation Will Get Worse Before It Gets Better (If It Ever Does)
Postcards from the florida republic: An independent and profitable state of mind. Forget the “dual mandate” you learn about in high school social studies - the entire purpose of the Federal Reserve is to hide the very inflation they influence. For roughly 17 years, the Fed never openly admitted it engaged in “inflation targeting” starting […]Ben Bernanke Should Be in Jail Alongside the Wall Street Execs He Just Accused
"Illegal acts ultimately are done by individuals, not by legal fictions," he added in an interview published by USA Today on Sunday.
It's true that seven years later, not a single Wall Street bad actor has gone to prison over the credit crisis - even though it dwarfed the savings and loan scandals of the 1980s for which 1,100 people were prosecuted for white collar crimes, including top executives of the large failed banks.
How "The Most Powerful Man in the World" Got His Mortgage Denied...
Ben Bernanke began his tenure as Chairman of the Federal Reserve Board just as the housing bubble was peaking in February 2006.
He exited the post in February of this year after supposedly shepherding the country out of the Great Recession the mortgage crisis spawned.
He recently admitted the housing recovery is hitting a wall.
But this time, it's personal... Full Story
The Greatest Criminal Enterprise in the World
From the Editor: Shah Gilani is one of the few people who can show you how it really is. In this case, he's going to show you the real reason the Fed chose not to taper. If you're overly idealistic, don't read this. It will only anger you. That, of course, is why Shah's naming names today...
Ben Bernanke is the don of the greatest criminal enterprise in the world.
And yesterday his made monsters, the Five Families, lined up to kiss his ring, again.
By not "tapering" or reducing the $85 billion a month ($45 billion in Treasuries and $40 billion in agency mortgage-backed securities) the Fed is buying from banks, the Fed is saying to its hit men, "We are family, and as long as Johnny Law is coming after you, we've got your back."
The "legal and litigation costs" (that means lawyers and fines) racked up by America's Five Families since the credit crisis gently (not) ushered in the Great Recession is over $103 billion, by some estimates. That doesn't include actual losses from related activities.
The Five Families, according to the Federal Reserve, are big, very big bosses in their territories, which means America and a good part of the world.
Let's name names... and then I'll tell you the REAL reason the Fed didn't taper yesterday
BREAKING: Bernanke to Continue Controversial Bond Buying Program
Fed Chairman Ben Bernanke announced in a press conference this afternoon that the U.S. Federal Reserve will continue quantitative easing, the controversial bond buying program, for now. Chairman Bernanke expressed concern over rising borrowing costs and their effect on the economy, saying that the situation calls for continued quantitative easing.
Analysts on and off Wall Street were surprised, to put it mildly. Markets responded very well to news of continued easy-money policy. The mainstream consensus was that the Fed would begin to taper off its $85 billion monthly bond purchases by around $10 or $15 billion each month. Current pricing just didn't take continued bond buying into account, and the bullish reaction was immediate, intense, and widespread.
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How the Fed QE Taper Will Affect Foreign Markets
Hints from the U.S. Federal Reserve this week that the quantitative easing taper is near ruffled feathers on Wall Street last week - but the idea of less Fed stimulus has caused much more turmoil in certain overseas markets. Here are the places getting hit the hardest.
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This Is Now Your No. 1 Choice for Big Gains
From the Editor: Subscribers who followed Keith's most recent play on U.S. Treasuries locked in a 100% gain on Friday. But "this game is a long way from over," he says. So here's what he's recommending now. Take notes. "Home run potential" isn't a phrase Keith uses lightly...
As I'm writing this, halfway through Wednesday's session, stocks are in danger of closing in the red for a fifth straight day. And this is all you'll hear about today.
Yet bonds are telling you the real story.
In fact, at this point, they are the next best thing to the Holy Grail if you've got the right perspective and understand what's happening.
This is a big moment.
It's big for uber-investors like Bill Gross, who just experienced something brand-new for PIMCO.
And it's big for you.
So at the very least, strongly consider the first move I'm going to show you today. You don't have to buy a single bond to take advantage of its home run potential. The other two moves I'm going to share with you simply "ice the cake."
But let's go back to the 1980s for a minute, when all this payoff potential began to build...
Check Out What the FOMC Meeting Minutes Did to the Stock Market Today
In one of the most highly anticipated releases of the year, the Federal Open Market Committee (FOMC) meeting minutes from July 30-31 were released today (Wednesday).
They will be picked apart for days - but here's what you need to know.
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FOMC Meeting: Fed Just Backtracked on QE Taper Talk
After the two-day FOMC meeting, the committee just backtracked on all the previous taper talk - here's why the Fed might be "winging it."
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The Next Fed Chief Will Be the Most Powerful of All Time
The U.S. Congress established three core objectives for monetary policy in the Federal Reserve Act of 1913: maximum employment, stable prices, and moderate long-term interest rates.But in addition to acting as steward of the economy, the Fed's role has expanded over the years.
The Great Recession, a need for corporate bailouts, and concerns over the Fed's secrecy brought about recent changes to its institutional identity.
Certainly we've had a renewed focus on the Fed's responsibility as a regulator.
People wanted to see - needed to see - a Fed that operates no longer as a creature of the banks, but as a watchdog instead.
Emblematically, the Dodd-Frank Wall Street Reform and Consumer Protection Act were signed into law in July 2010.
With it, Dodd-Frank brought the most substantial changes to financial regulation since the aftermath of the Great Depression. Particularly, a greater breadth of regulatory power was given to the Fed.
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Exclusive: Obama Tells Money Morning Why He Just Loves Larry Summers...
Says Obama:
Larry Summers for Fed Chief... He's got my vote. Absolutely!
Why? You just have to get to know the guy and you'll see he's perfectly qualified to head the Federal Reserve.
Here's just part of his resume.
From 1982-1983, Larry Summers was on staff at Ronald Reagan's Council of Economic Advisers. That's where Lawrence of Enablers earned his "Deregulate Everything" T-shirt.
After his brief stint on the Gipper's Council, where he was taught how real pros corral free markets for personal profit, the Enabler headed back to Harvard to teach kids (and himself) how to squeeze personal wealth out of mere economic theory.
He got his next shot at stardom as Chief Economist of the World Bank in 1991. He was there until 1993.
While there he wasted no time shining a light on himself.
In a 1991 interview he famously said:
Read on here...
Another Big Fed Week: The Bernanke Monetary Policy Testimony to Congress
There's a key market-moving event this week investors can't miss: the semi-annual Ben Bernanke monetary policy testimony before Congress on Wednesday (House) and Thursday (Senate).
Congressional legislation known as Humphrey-Hawkins (now expired) required the Federal Reserve's Open Market Committee to report to Congress on both the state of the U.S. economy and monetary policy twice a year (February and July). The Fed Chairman testifies before Congress in conjunction with the report.
Traditionally, it had been one of the most important public appearances by the Fed Chairman, back when speeches were rare. But now with news conferences after many Fed meetings, these appearances are less important.
However, this time may be different, as it will be Ben Bernanke's last time in front of Congress before his term ends in 2014. The testimony may once again be a market moving event due to the market's recent concern about the Fed's 'tapering' of quantitative easing (QE).
Which Ben Will Deliver the Monetary Policy Testimony?
The markets have been confused lately by seemingly contradictory statements coming from various Fed members and particularly from Bernanke himself.
In fact, Bernanke's actions lately remind me of Batman villain Two-Face, aka former District Attorney Harvey Dent.
For example, one time he said that winding down QE may happen as soon as the middle of next year. But then, like last week, he flips saying the Fed will not taper the $85 billion a month bond purchasing plan until the U.S. economy is stronger.
He said, "highly accommodative monetary policy for the foreseeable future is what's needed [for the economy]."
Bernanke added that there would not be an automatic rise in interest rates either when the U.S. unemployment hit the Fed's target of 6.5%.
These statements sent the stock market solidly higher with both the S&P 500 and the Dow Industrials nearing their record highs. The S&P 500 and Dow Jones Industrial Average hit new record highs Monday closing at 1,682.50 and 15,484.26.
Traders believe the 'Bernanke put' was back in play. That is, Bernanke will do everything he can to keep stock prices higher.
So which Ben Bernanke will testify before Congress this week? Accommodative Ben or Tightening Ben?
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Why Ben Bernanke's QE3 Comments are Bullish for Gold Prices
When Ben Bernanke speaks, the gold market listens - closely.
The Federal Reserve chairman's comments late Wednesday that the central bank would continue its QE3 economic stimulus for now drove gold prices higher, and they're likely to keep rising.
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Top 5 Choices for the Next Fed Chief Leave Much to Be Desired
After President Barack Obama all but fired U.S. Federal Reserve Chairman Ben Bernanke in a recent television interview, everyone's been trying to figure out who the president will name as the next Fed chief next year.
Of course, Money Morning has long been critical of the Bernanke-led Fed, and in particular its easy money policies of recent years -- namely its zero interest rates and waves of quantitative easing (QE) that have added trillions to the Fed's balance sheet.
That debt, the asset bubbles it has created and the Fed's too-cozy relationship with the Big Banks, has prompted the experts at Money Morning to question whether the Federal Reserve should exist at all.
"I believe the Fed is outmoded and should be disbanded," said Money Morning Chief Investment Strategist Keith Fitz-Gerald, who recently wrote about whether the Fed is necessary. "It's a financial body that has outlived its usefulness and is merely causing us to lurch from crisis to crisis. Barring any change in the notion of what it's there to do, get rid of it."
Still, for the time being, we're stuck with the Federal Reserve. And the next Fed chief - whoever President Obama appoints in January -- will be setting monetary policy for at least the next four years.
One thing's for sure: Anyone who dislikes how Bernanke has run the central bank probably won't be happy with the next Fed chairman either.
As confounding as it seems now, it was not the liberal Democrat President Obama, but Republican President George W. Bush who first appointed Bernanke to head the Federal Reserve in 2006.
That Obama re-appointed Bernanke in 2010 made sense, as they share a similar Keynesian economic philosophy. That is, they both think the best way to help a weak economy is through massive government spending no matter how much debt piles up.
So while Bernanke may be on his way out the door, you can bet that whoever President Obama chooses as the next Fed chief will be just as much of a Keynesian as Bernanke has been - and maybe more so.
Heaven help us.
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Keith Fitz-Gerald: What Ben Bernanke is Doing to the Markets
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