Federal Reserve thought there was no crisis in 2007


This is pathetic on so many levels. The Federal Reserve had no clue financial problems were coming in 2007. Yet blogs like Calculated Risk knew exactly what was coming and predicted it accurately. What’s worse, the very same dimbulbs who knew nothing in 2007 are still running the Fed. They should have all been fired.

Federal Reserve officials were largely unaware of the financial crisis brewing in 2007, until they found themselves in the middle of it.

Steve Wynn: The Fed is doing is what Madoff went to jail for

Las Vegas casino mogul Steve Wynn says the Fed is running a Ponzi scheme just like Bernie Madoff did. The Fed is quietly and steadily causing inflation and that hurts everyone and is also bailing out the already wealthy at the expense of the rest of us.

“The demand for American bonds wasn’t as great as what it used to be. So what we did is what Bernie Madoff went to jail for: the Federal Reserve printed the money and bought the bonds from the government as if it was really an auction and there was really a buyer.”

“Everyone that works for me — every African-American, every Latino, every Catholic, every Jew, every Italian, every Mormon in this state — finds that when they take a look at their household budget, the money that they have to live on, their living standard, everything has gotten worse. It costs more for fuel. It costs more for clothing. It cost more for Wal-Mart. It costs more for healthcare. It costs more for everything there is.”

Wynn arrived in Vegas in his mid-20’s and built an empire, as chronicled in the biography Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn. He has a genuine gift for building and managing casinos and hotels and gets personally involved with the design. The bio so enraged him that he bankrupted the publisher. However the book is back in print. I read it expecting much damning information and found little except that he has some mob friends and was turned down by Scotland Yard to build a casino in Britain. And when it comes to commentary on our economic times, he’s absolutely on target and his sometimes epic rants get lots of media play, as well they should.

The Fed is basically acting on behalf of a tiny number of bankers, continually bailing them out. Currently the Federal Reserve is buying toxic slop mortgages from the banksters. This bails out the banks and gives us, the taxpayers, the bill. If we had actual rule of law, most of the banksters would be in prison. If we had actual capitalism, their banks would have been allowed to fail long ago.

Wynn says Obama failed completely at his most important task, which was to create jobs. Instead, Obama immediately focused on healthcare. Obama’s first stimulus plan was half stimulus and half pork barrel. Further, Obama broke his campaign promises to work towards a balanced budget and provide comprehensive immigration reform when he controlled both houses of Congress. Instead, he and the Fed are causing inflation, and that is starting to pound the middle and working class.

Wynn employs 20,000 people and has self-financed their health care for 45 years. He speaks the truth here.

The Federal Reserve continues to abdicate its duty


Suddenly normally calm economists are talking about 1931, the year everything fell apart.

It started with a banking crisis in a small European country (Austria). Austria tried to step in with a bank rescue — but the spiraling cost of the rescue put the government’s own solvency in doubt. Austria’s troubles shouldn’t have been big enough to have large effects on the world economy, but in practice they created a panic that spread around the world. Sound familiar?

The really crucial lesson of 1931, however, was about the dangers of policy abdication

The Fed is indeed abdicating its responsibility to the American public and instead continues to bailout the corrupt, failing TBTF banks. This isn’t so much abdication but rather quite deliberate policy. Send money to the 1% while ignoring the rest of us.

Worse, their policies are failing. The economy continues to do badly and unemployment is high. A responsible, non-compromised Federal Reserve would be actively trying to spur the economy. Krugman opines the Fed might be afraid to to anything that would be seem as helping Obama because that could enrage House Republicans. But that’s wishful thinking. The Fed has been pursuing the exact same policy of enriching the banksters at our expense since Day One of the Obama Administration. The problem isn’t one party but rather a corrupted system.

The Federal Reserve exists to protect the 1%

The banksters and Fed are of course gobsmacked by what happened asying, who could have predicted it?

3 big reasons the Fed got it wrong

  • Misunderstanding of the housing boom
  • A lack of analysis of the rapid growth of new forms of mortgage finance
  • Insufficient weight given to the powerful adverse feedback loops between the financial system and the real economy.

All true but the real reason the Fed somehow failed to understand the obvious is that is primarily exists to protect the financial interests of a tiny few. There are plenty of reputable financial blogs that were correctly explaining the financial crisis four years ago. But somehow the Fed just couldn’t quite bring itself to understand the obvious, something which clearly demonstrates how compromised, corrupted, and incompetent they are.

The Fed’s primary goal is to insure that big financial interests who knowing sold garbage securities and made toxic loans must never ever take a writedown on this slop. Instead countries must pay for the greed and criminality of the few.

Business Insider states the fair and obvious solution.

It’s called “bankruptcy.”

The borrower says, “I can’t pay you back” and then the borrower surrenders his or her claim on any assets that he or she still possesses.

The lender, meanwhile, sifts through those assets and recoups what he or she can.

That we are now facing bankruptcies at the level of countries clearly shows the venality of the Fed and Eurozone financial ministers. They don’t care who gets hurt as long as they do not lose a penny of profit.