What Quantitative Easing Really Means = Bank Bailouts

What Quantitative Easing Really Means = Bank Bailouts

Kona Tea Party, 4.15.2009

Did you really think that the Federal Reserve’s magic printing presses were actually going to help us, the average American. What follows is an excellent explanation of what QE actually means; more big bank bailouts.  Do you still have a bank account or credit card with one of these sharks?

From Economic Collapse:

The Biggest Bank Robbery In History? More Quantitative Easing = Backdoor Bailouts For The Big Banks Without Having To Go Through Congress

The U.S. Federal Reserve is getting ready to conduct another gigantic bailout of the big banks, but this time virtually nobody in the mainstream media will use the term “bailout” and the American people are going to get a lot less upset about it. You see, one lesson that was learned during the last round of bank bailouts was that the American people really, really do not like it when the U.S. Congress votes to give money to the big banks. So this time, the financial “powers that be” have figured out a way around that. Instead of going through the massive headache of dealing with the U.S. Congress, the Federal Reserve is simply going to print money and give it directly to the banks. To be more precise, the Federal Reserve is going to use a procedure known as “quantitative easing” to print money out of thin air in order to purchase large quantities of “troubled assets” (such as mortgage-backed securities) from the biggest U.S. banks at well above market price. Some are already openly wondering if this next round of quantitative easing is going to be the biggest bank robbery in history. Most Americans won’t understand these “backdoor bailouts” well enough to get upset about them, but that doesn’t mean that they won’t be just as bad (or even worse) than the last round of bailouts. In the end, all of the inflation that this new round of quantitative easing is going to cause is going to be a “hidden tax” on all of us.

These new backdoor bailouts are going to work something like this….

1) The big U.S. banks have massive quantities of junk mortgage-backed securities that are worth little to nothing that they desperately want to get rid of.

2) They convince the Federal Reserve (which the big banks are part-owners of) to buy up these “toxic assets” at way above market price.

3) The Federal Reserve creates massive amounts of money out of thin air to buy up all of these troubled assets. The public is told that all of this “quantitative easing” is necessary to stimulate the U.S. economy.

4) The big banks are re-capitalized and have gotten massive amounts of bad mortgage securities off their hands, the Federal Reserve has found a way to pump hundreds of billions (if not trillions) of dollars into the economy, and most of the American people are none the wiser.

Make sure to go over and read the rest; then tell your family and friends about the latest way the big banks are going to get a hand up/hand out and how we are going to be left with the interest payment reaching $1 Trillion dollars next year.

Available Historical Data Fiscal Year End - in Billions (Source: US Treasury)

Bernanke: “No Fiscal Exit Strategy”

I have a rather important question, but let’s allow Ben Bernanke to do his little song and dance for Charles Djou about how the government has no fiscal exit strategy from the current monetary policy that was put in place to keep the economy from collapsing.

I almost passed by this video because it is so much of the same old schtick from past and present administrations.  It is more than obvious that the people at the helm appear to have no clue while they are busy taking the necessary steps to bring the United States’ economic situation more in line with the rest of the world’s economies.

Especially after you see a headline like this:

U.S debt to rise to $19.6 trillion by 2015

WASHINGTON
Tue Jun 8, 2010 6:19pm EDT

WASHINGTON June 8 (Reuters) – The U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015, according to a Treasury Department report to Congress.

The report that was sent to lawmakers Friday night with no fanfare said the ratio of debt to the gross domestic product would rise to 102 percent by 2015 from 93 percent this year.

“The president’s economic experts say a 1 percent increase in GDP can create almost 1 million jobs, and that 1 percent is what experts think we are losing because of the debt’s massive drag on our economy,” said Republican Representative Dave Camp, who publicized the report.

He was referring to recent testimony by University of Maryland Professor Carmen Reinhart to the bipartisan fiscal commission, which was created by President Barack Obama to recommend ways to reduce the deficit, which said debt topping 90 percent of GDP could slow economic growth.

Here is the question. Is the American taxpayer relevant anymore? If we were all to stop working, producing, and paying our taxes, would the current WH, Congress and Fed Board of Governors even notice, or would they just keep printing money and using the fiscal credit card?    I wonder how many Americans would agree that we need to give the Palestinians $400 Million when Detroit looks like Mogadishu, and real unemployment numbers are hovering around 20%?

I think we need an answer to the first question, and soon…

(H/T BB)

If You Are Not Worried, You Should Be

If You Are Not Worried, You Should Be

The gathering storm of economists and lawyers that are going to help the banking cartel get even more control over you by controlling your money is getting larger and darker.  Yet, still no plan on Fannie, Freddie, and FHA.

Slate of Nominees Is Clue to Obama’s Plans for Fed

WASHINGTON — In naming two economists and a lawyer to serve as governors of the Federal Reserve, President Obama and his top economic advisers are preparing the central bank for a new emphasis on the supervision of financial institutions.

The financial crisis that led the Fed to hurl money at the economy and prop up the housing market also exposed a past inattention to regulation. The backgrounds and expertise of the nominees, announced on Thursday, suggest the Obama administration is trying to address that shortcoming.

Only one of the three, Janet L. Yellen, specializes in the setting of interest rates and the supply of credit, the Fed’s traditional bailiwick.

The other economist, Peter A. Diamond, is an authority on Social Security and pensions who was a graduate school mentor of Ben S. Bernanke, the Fed’s chairman, at the Massachusetts Institute of Technology.

The lawyer, Sarah Bloom Raskin, Maryland’s commissioner of financial regulation, is an ally of consumer advocacy groups, which believe that the Fed’s neglect abetted the subprime lending crisis that metastasized into the most damaging downturn since the Depression.

Janet L. Yellen

Photo of Janet L. Yellen

President
Federal Reserve Bank of San Francisco

Janet L. Yellen took office on June 14, 2004, as president and chief executive officer of the Twelfth District Federal Reserve Bank, at San Francisco.

Dr. Yellen is professor emeritus at the University of California at Berkeley where she was the Eugene E. and Catherine M. Trefethen Professor of Business and Professor of Economics and has been a faculty member since 1980.

Dr. Yellen earlier took leave from Berkeley for five years starting August 1994 when she served as a member of the Board of Governors of the Federal Reserve System through February 1997, and then left the Fed to become chair of the Council of Economic Advisers through August 1999. She also chaired the Economic Policy Committee of the Organization for Economic Cooperation and Development from 1997 to 1999.

Dr. Yellen is a member of both the Council on Foreign Relations and the American Academy of Arts and Sciences and a research associate of the National Bureau of Economic Research. She also serves on the board of directors of the Pacific Council on International Policy, and in the recent past, she served as president of the Western Economic Association, vice president of the American Economic Association and was a Fellow of the Yale Corporation.

Dr. Yellen graduated summa cum laude from Brown University with a degree in economics in 1967, and received her Ph.D. in Economics from Yale University in 1971. She received the Wilbur Cross Medal from Yale in 1997, an honorary doctor of laws degree from Brown in 1998, and an honorary doctor of humane letters from Bard College in 2000.

An assistant professor at Harvard University from 1971 to 1976, Dr. Yellen served as an economist with the Federal Reserve’s Board of Governors in 1977 and 1978, and on the faculty of the London School of Economics and Political Science from 1978 to 1980.

Dr. Yellen has written on a wide variety of macroeconomic issues, while specializing in the causes, mechanisms and implications of unemployment.

Janet Yellen:

AKA Janet Louise Yellen

Born: 13-Aug1946
Birthplace: Brooklyn, NY

Gender: Female
Race or Ethnicity: White
Sexual orientation: Straight
Occupation: Economist
Party Affiliation: Democratic

Nationality: United States
Executive summary: President and CEO, San Francisco Fed

Husband: George A. Akerlof (2001 Nobel Prize in Economics)
Son: Robert

University: BA Economics, Brown University (1967)
University: PhD Economics, Yale University (1971)
Professor: Harvard University (1971-76)
Scholar: Research Fellow, Massachusetts Institute of Technology (1974)
Professor: London School of Economics (1978-80)
Professor: University of California at Berkeley (1980-)

Federal Reserve Bank of San Francisco President and CEO (2004-)
Organisation for Economic Cooperation and Development Economic Policy Committee (1997-99)
US Council of Economic Advisers (1997-99)
US Federal Reserve Governor (1994-97)
American Academy of Arts and Sciences 2001
American Economic Association Vice President
Brookings Institution Advisory Board, Panel on Economic Activity (1999)
European Centre For International Political Economy Advisory Board (1999-)
US Congressional Budget Office Advisor
Council on Foreign Relations (1976-81)
John Kerry for President
National Academy of Sciences Panel on Ensuring the Best Presidential Science and Technology Appointments (2000)
National Association for Business Economics Fellow
National Bureau of Economic Research Research Associate
Pacific Council on International Policy Board of Directors
Western Economic Association
Phi Beta Kappa Society (1965)
Guggenheim Fellowship (1986-87)

Who is Janet Yellen?

Janet Yellen, president of the Federal Reserve Bank of San Francisco, is expected to be nominated by President Barack Obama as vice chair of the Federal Reserve Board. Ms. Yellen, 63 years old, has served as a Fed policy maker for almost a decade between her stints in Washington and San Francisco.
Dan Francisco Fed President Janet Yellen (Reuters)

Policy stance:
Ms. Yellen has been a reliable supporter of Fed Chairman Ben Bernanke’s policies. She is frequently cited by economists as one of the central bank’s most dovish policymakers, generally backing policies that would boost growth and reduce high unemployment. She has long been a counterweight to the Fed’s more hawkish regional bank presidents who tend to be more concerned about rising inflation. (The Fed’s dual mandate from Congress is to promote maximum sustainable employment and price stability.)

Voting record:
In her time as a Fed policy maker, Ms. Yellen has never cast a dissenting vote on policy — in either raising interest rates or lowering them. She has voted 36 times as a member of the Federal Open Market Committee, always with the majority, according to a tally by Wrightson-ICAP. Of the 12 current regional bank presidents, five have dissented at least once. Of current FOMC officials, only three have cast more votes on interest-rate policy in their careers: Vice Chairman Donald Kohn (63 votes), Kansas City Fed President Thomas Hoenig (60 votes) and Chairman Bernanke (56 votes), according to the Wrightson tally.

Obama to Nominate Three to Fed Board

Picking Mr. Diamond and Ms. Raskin—neither of whom have much experience in monetary policy—”is a symptom of broadening the Fed’s responsibilities,” said Alice Rivlin, a former Fed vice chair. “The Fed’s got a lot on its plate at the moment.” (emphasis mine)

Peter A. Diamond:
Peter Diamond, turns 70 on Thursday
Professor, Massachusetts Institute of Technology
Prior positions: Professor, University of California, Berkeley
Education: MIT, Ph.D. (Economics); Yale , B.A. (Mathematics)
Academic Interests: Social Security, pensions, taxation

Sarah Bloom Raskin:
Sarah Bloom Raskin, 49
Maryland Commissioner of Financial Regulation (Aug 2007 to present)
Prior positions: Managing Director, Promontory Financial Group; General Counsel, Worldwide Retail Exchange; General Counsel, Columbia Energy Services Corp; Counsel, Senate Banking Committee; Staff, Federal Reserve Bank of New York; Staff, Congress’s Joint Economic Committee
Education: Harvard Law School, J.D.; Amherst , B.A. (Economics)

Does anyone still think we need a central bank that is really a private banking cartel draining us of every last penny through interest payments? What happens when these parasites start raising interest rates, as they must?

Time To Go See MarketTicker

Time To Go See MarketTicker

It’s one of those red-letter days when you absolutely have to go over to MarketTicker and read the entire article. Here are few prime quotes that go hand in hand with the ‘Dominoes’ post and what your own common sense has been telling you for years.

(more…)

Sociopaths In Charge Of Banks And Government

Sociopaths In Charge Of Banks And Government

(H/T NamVet)

William Black, Associate Professor of Economics and Law at the University of Missouri, Kansas City, on the S&L crisis, the current banking situation, and Ben Bernanke’s part in the whole meltdown.  I’m still waiting for the FBI to finish their investigation of Wall Street.  You’re not holding your breath are you?

Pay attention folks and watch the series.  Mr. Black explains how a trillion dollars in losses are not being reported so as to allow profits to show and bonuses to be paid.  Would you also like to know the four part recipe to making a mountain of cash on Wall Street and ripping off the taxpayer at the same time?  Want to hear how the reforms from the S&L crisis have actually made our current situation worse?  Did not think so.  TOO BAD!  Watch and educate yourself on this issue.

The recipe for Banks:

  1. grow like crazy;
  2. make deliberately bad loans that aren’t going to be repaid, (can charge higher interest rates);
  3. have extraordinary leverage, (borrow alot and have very little capital);
  4. (Fraud all by itself) don’t put on loss reserves in your accounting books (shows up as massive profit).

Part 2: Why the Obama administration is so weak on economic reform and recovery. Geithner was a failed bank regulator. Pay attention here folks – Bernanke appoints Patrick Parkinson; the same name that filleted Brooksley Born when she “wanted to regulate credit default swaps…” back in the late ’90s. More info on Brooksley – Brooksley Born Takes On The Big Boys And We All Lose.

Part 3:  The continuing cover-up of the unreported losses by using red crayon math accounting practices.  Mr. Black explains that there is “no accident that there are no indictments, much less convictions of the senior insiders that drove these liars loans”.  This particular crisis is at least 30% greater than the S&L crisis and we have less than 1/6th of the resources used then applied to this crisis.  He also covers the the upcoming financial reform legislation, the silliness surrounding the bills, and the fact that the only entity that hates consumers and loves banks more than the Treasury is the Fed.  Imagine that.

Part 4:  What William Black would say to Obama if he ever actually called Mr. Black.  This segment also includes Mr. Black’s ‘Top Ten Ways To Crack Down On Corporate Financial Crime’.  He points out that Obama is part of the problem in the recovery and re-regulation crisis because he is such a pantywaist on the issues while allowing Geithner and Summers to run us into financial oblivion.

Part 5: Solutions to the crony capitalism thriving in Washington and New York.

For those that would like more information, check out the related links at the bottom of the post. It’s a tad bit scary to see all those posts next to each other and they are just the tip of the iceberg.

Ben Bernanke; The Economic Collapse Poses A Threat To Economic Recovery

Ben Bernanke; The Economic Collapse Poses A Threat To Economic Recovery

Ben is such a genius. I wish I was as smart as Ben…

(all emphasis from this point on, mine.)

Bernanke Says Joblessness, Foreclosures Pose Hurdles (Update2)

April 7 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said joblessness, home foreclosures and weak lending to small businesses pose challenges to the economy as it recovers from the worst recession since the 1930s.

“We are far from being out of the woods,” Bernanke said today in a speech in Dallas. While the financial crisis has abated and economic growth will probably reduce unemployment over the next year, the U.S. faces hurdles including the lack of a sustained rebound in housing, a “troubled” commercial real estate market and “very weak” hiring, he said.

The remarks reflect concerns by Fed officials at their meeting last month that the job market and tight credit would restrain consumer spending. At the session, Bernanke and his colleagues reiterated interest rates will stay very low for an “extended period.” He didn’t repeat that in today’s speech, while saying the Fed’s “stimulative” rates will aid growth.

“The economy has stabilized and is growing again, although we can hardly be satisfied when one out of every 10 U.S. workers is unemployed and family finances remain under great stress,” Bernanke said in prepared remarks to the Dallas Regional Chamber.

Separately, New York Fed President William Dudley said today that the benchmark federal funds rate “needs to be exceptionally low for an extended period to contribute to easier financial conditions to support economic activity.”

FOMC Vice Chairman

Dudley, who serves as vice chairman of the rate-setting Federal Open Market Committee under Bernanke, was responding to a question from former U.S. Deputy Treasury Secretary Roger Altman, now chairman of Evercore Partners Inc., after a speech to the Economic Club of New York.

Consumer credit declined by the most in three months in February, a Fed report showed today, indicating Americans are reluctant to take on more debt without further improvement in the labor market.

Borrowing fell $11.5 billion after a revised $10.6 billion January gain that was twice as much as initially estimated. The decline in the February measure of credit card debt and non- revolving loans was worse than the lowest estimate in a Bloomberg News survey of 34 economists.

Stocks extended losses after the report. The Standard & Poor’s 500 Index fell 0.8 percent to 1,180.15 at 3:28 p.m. in New York. Treasuries rose, pushing the yield on 10-year securities down nine basis points to 3.86 percent.

Rate Unchanged

At the meeting last month, central bankers left the benchmark rate target, covering overnight interbank loans, in a range of zero to 0.25 percent, where it has been since December 2008.

The median estimate of analysts surveyed by Bloomberg News last month is for a Fed interest-rate increase in November.

“Although much of the financial system is functioning more or less normally, bank lending remains very weak, threatening the ability of small businesses to finance expansion and new hiring,” he said.

The Fed last week completed plans to purchase $1.25 trillion of mortgage-backed securities and $175 billion of federal agency debt to reduce home-loan costs. Central bankers are debating when to start selling the debt to reduce the Fed’s balance sheet, which has ballooned to $2.31 trillion from its pre-crisis level of about $874 billion.

“We have yet to see evidence of a sustained recovery in the housing market,” Bernanke said. “Mortgage delinquencies for both subprime and prime loans continue to rise as do foreclosures. The commercial real estate sector remains troubled, which is a concern for communities and for banks holding commercial real estate loans.”

‘Toughest Problems’

Bernanke said some of the economy’s “toughest problems” are in the job market. U.S. employers added 162,000 jobs in March, the third gain in five months and the most in three years. The unemployment rate held at 9.7 percent, close to a 26- year high.

“Hiring remains very weak,” Bernanke said. “I am particularly concerned” that more than 40 percent of those without jobs have been out of work for at least six months, because such spells may erode skills and reduce the workers’ income and employment prospects, the Fed chief said.

The economy expanded at a 5.6 percent annual rate in the final three months of 2009, led by inventory restocking, according to Commerce Department figures released last month. That pace probably slowed to 2.8 percent in the first quarter of 2010, according to the median estimate in a Bloomberg News survey of economists last month.

Employment Outlook

“My best guess is that economic growth, supported by the Federal Reserve’s stimulative monetary policy, will be sufficient to slowly reduce the unemployment rate over the coming year,” Bernanke said.

Bernanke said inflation “appears to be well controlled” and price expectations “appear stable.” A price gauge favored by the Fed, the personal consumption expenditures price index, minus food and energy, rose 1.3 percent for the year ended in February, slowing from a 1.5 percent rate in January. Fed officials have a longer-run goal of 1.7 percent to 2 percent for the full PCE price index.

Bernanke reiterated his call for a long-term reduction in federal budget deficits, saying “nothing prevents us from beginning now to develop a credible plan.” Without a commitment to “fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth.” (there ya go kids – that VAT is coming unless we flip this congress and abolish the fed)

The Obama administration estimates budget deficits will total $5.1 trillion during the next five years and hit a record $1.6 trillion in the year ending Sept. 30. Last year the gap widened to $1.4 trillion amid falling tax revenue from the recession, a bailout of the banking and auto industries, and the 2009 economic stimulus package.

Aren't The Bubbles Beautiful?

AYFKM? Bernanke: Eliminate Minimum Reserve Requirements

Are you freakin’ kidding me? While the District of Criminals has us laser focused on the healthcare takeover and illegal alien amnesty, Ben Bernanke would like to eliminate the minimum reserve requirements because they are a profit drag.  Was there or WAS THERE NOT a stress test last year to see if banks had enough reserves to fend off the commercial real estate bubble (my theory for the test)?

Just one more reason that the Federal Reserve Banking Cartel and their mafia boss, Bernanke, have got to go!

Bernanke footnote: Fed wants end to ‘minimum reserve requirements’

In the footnotes of a speech U.S. Federal Reserve Bank Chairman Ben Bernanke would have given to the House Financial Services Committee on Feb. 10, lies a unique and startling disclosure.

Hosted on the Federal Reserve’s own servers, the written testimony of the bank’s chairman explains in plain text what expanding the Fed’s powers will do.

“The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system,” footnote number nine, at the bottom of the page, explains without additional qualification.

Chairman Ben S. Bernanke
Federal Reserve’s exit strategy
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.

February 10, 2010

9. The authority to pay interest on reserves is likely to be an important component of the future operating framework for monetary policy. For example, one approach is for the Federal Reserve to bracket its target for the federal funds rate with the discount rate above and the interest rate on excess reserves below. Under this so-called corridor system, the ability of banks to borrow at the discount rate would tend to limit upward spikes in the federal funds rate, and the ability of banks to earn interest at the excess reserves rate would tend to contain downward movements. Other approaches are also possible. Given the very high level of reserve balances currently in the banking system, the Federal Reserve has ample time to consider the best long-run framework for policy implementation. The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system. (emphasis mine)

On an even more interesting and related note, did you know that the Federal Reserve made the biggest profit last year of any company?

AYFKM? Now Bernanke Wants To Put The Brakes On?

AYFKM? Now Bernanke Wants To Put The Brakes On?

Time's Person of The Year

Ben Bernanke is so deserving of this next AYFKM? Award for his warning today about the US debt, and how The Fed won’t “monetize” the debt, all the while not taking responsibility for his part in the financial fiasco.

Bernanke delivers warning on U.S. debt
Stage is set in U.S. for a Greek tragedy

With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.

Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said.

“It’s not something that is 10 years away. It affects the markets currently,” he told the House Financial Services Committee. “It is possible that bond markets will become worried about the sustainability [of yearly deficits over $1 trillion], and we may find ourselves facing higher interest rates even today.”

Mr. Bernanke for the first time addressed concerns that the impasse in Congress over tough spending cuts and tax increases needed to bring down deficits will eventually force the Fed to accommodate deficits by printing money and buying Treasury bonds — effectively financing the deficit on behalf of Congress and spurring inflation in the process.

Some economists at the International Monetary Fund and elsewhere have advocated this approach, suggesting running moderate inflation rates of 4 percent to 6 percent as a partial solution to the U.S. debt problem. But the move runs the risk of damaging the dollar’s reputation and spawning much higher inflation that would be debilitating to the U.S. economy and living standards.

Rep. Brad Sherman, California Democrat, asked Mr. Bernanke directly whether the Fed would consider such a strategy, especially since IMF officials endorsed it.

“We’re not going to monetize the debt,” Mr. Bernanke declared flatly, stressing that Congress needs to start making plans to bring down the deficit to avoid such a dangerous dilemma for the Fed.

“It is very, very important for Congress and administration to come to some kind of program, some kind of plan that will credibly show how the United States government is going to bring itself back to a sustainable position.”

Separately, Mr. Bernanke’s predecessor, Alan Greenspan, told Bloomberg News that “fiscal affairs are threatening the outlook” for recovery from recession as Congress and the White House have been unable for years to make tough decisions to raise taxes or cut spending.

And here’s the kicker; $5 Trillion in mortgage-backed and assorted other debt connected to Fannie and Freddie that is not being included in Obama’s budget.

Separately, the debate continued over whether Fannie Mae and Freddie Mac, the two mortgage financing giants, should be included in the federal budget books now that the Obama administration has taken the limits off aid the Treasury Department is prepared to give the companies to keep them solvent.

Republicans, including Rep. Spencer Bachus of Alabama, the top Republican on the banking committee, have argued that the government is now effectively guaranteeing Fannie and Freddie’s nearly $5 trillion of mortgage-backed securities and other debt, so their revenues and liabilities should be included in the federal budget as obligations of the government. Taking this step would greatly bloat the federal balance sheet.

Mr. Bachus said he worries that keeping Fannie and Freddie’s status off the federal books is “the same sort of financial shell game that has brought governments like Greece to a crisis point.”

But Treasury Secretary Timothy F. Geithner, who also testified on Capitol Hill on Wednesday, said the administration opposes including the quasi-government entities in the budget, although it lifted the limits on aid to Fannie and Freddie with the intent of assuring financial markets that the U.S. government stands behind their obligations.

“We do not think it is necessary to consolidate the full obligations of Fannie and Freddie onto the nation’s budget. But we do think it’s very important … that we make it clear to investors around the world that we will make sure that we will take the actions necessary” to keep the two entities stable, he told the House Budget Committee.

Want a little more good news to go with that fiscal celebration?

New home sales drop 11 percent in January, new low

Another Senator’s Special Banking Deal?

Another Senator’s Special Banking Deal?

Robert Menendez, Barack Obama, John Corzine

Senator Menendez (D-NJ), in a letter to The Fed, urged the approval of a bank sale where the chief officers were major campaign donors.  I know, nothing new to see here, just move along.  They are all bloodsucking parasites that need to be kicked to the curb, and soon.

This also reminds me of my own public servant, Sen. Daniel Inouye, whose ‘staff’ made a few phone calls and magically, Central Pacific Bank was bailed out.

Sen. Daniel K. Inouye’s staff contacted federal regulators last fall to ask about the bailout application of an ailing Hawaii bank that he had helped to establish and where he has invested the bulk of his personal wealth.

The bank, Central Pacific Financial, was an unlikely candidate for a program designed by the Treasury Department to bolster healthy banks. The firm’s losses were depleting its capital reserves. Its primary regulator, the Federal Deposit Insurance Corp., already had decided that it didn’t meet the criteria for receiving a favorable recommendation and had forwarded the application to a council that reviewed marginal cases, according to agency documents.

Two weeks after the inquiry from Inouye’s office, Central Pacific announced that the Treasury would inject $135 million.
Back to the Robert Menendez, “oops” show.  You know nothing is going to come of this, just as nothing is going to come of the Timothy Geithner, Hank Paulson, AIG show.  Have you heard anything about that lately?

Senator Prodded Fed to Aid Ailing Lender

WASHINGTON—Sen. Robert Menendez of New Jersey urged the Federal Reserve last July to approve an acquisition to save a struggling bank in his state. He didn’t mention that the bank’s chairman and vice chairman were big contributors to his political campaign.

If the acquisition had been approved, it would have prevented the two executives from losing what was left of their investments in the bank.

In his letter to the Fed July 21, Mr. Menendez said there was a strong likelihood that First BankAmericano, of Elizabeth, N.J., would fail in three days, which would “send yet another negative message to consumers and investors and further impact our fragile economy.” The one-page letter, obtained by The Wall Street Journal under the Freedom of Information Act, urged Fed Chairman Ben Bernanke to approve a sale of the bank to JJR Bank Holding Co. of Brick, N.J.

The Fed didn’t act on the request from Mr. Menendez, a Democrat, and First BankAmericano, which was closely held, failed July 31.

While lawmakers routinely forward requests from constituents to government agencies, it is rare for them to make specific requests along the lines of this letter asking specific actions, bank attorneys and congressional aides said. One reason is to avoid any appearance of trying to influence the regulatory process for political ends.

The chairman of First BankAmericano at the time of the letter, Joseph Ginarte, is a high-profile attorney with offices in New York and New Jersey. He has given a total of about $30,000 to Mr. Menendez and his political-action committee since 1999, according to federal records.

The vice chairman of the bank was Raymond Lesniak, a New Jersey state senator and local political heavyweight. He also has given generously to Mr. Menendez’s campaign coffers. In 2006, Mr. Lesniak held a fund-raiser at his home for the senator featuring former President Bill Clinton, according to news reports at the time.

When the bank failed, the shareholders, many of them board members, lost their investments. Had the acquisition been approved, Messrs. Ginarte and Lesniak still would have lost a large chunk of their investment but not all, according to First BankAmericano’s former chief executive, Holly Bakke. The size and value of their investments couldn’t be learned.

Mr. Menendez’s statement is a matter of semantics:

In a written statement, Mr. Menendez said helping the community bank, which mostly served Hispanics, was the right thing to do. “If any New Jersey constituent—regardless if it is a family or a local community bank—comes to me seeking assistance with a legitimate federal matter, not only is it important to help, I was elected to help,” he said. “Telling them ‘no’ would be abdicating my responsibility.”

An aide to the senator said the political contributions didn’t influence the decision to write the letter. The aide called its language a mistake, saying it should have stopped short of asking the Fed to take specific action.

Bernanke Confirmation Hearings (UPDATE: Confirmed 70-30 With Voting Record)

Bernanke Confirmation Hearings (UPDATE: Confirmed 70-30 With Voting Record)

More fear and financial blackmail going on right now on the floor of the senate. Earlier today, the senate voted to end debate and move for a final vote happening now.  I will update as soon as the vote is final.  To watch the final vote streaming live, go here.

Senate Votes in Favor of Bernanke

The Senate voted to end debate on the nomination of Ben Bernanke for a second four-year term as chairman of the Federal Reserve, clearing the way for a final vote later today in which Mr. Bernanke is expected to prevail.

During more than two hours of debate on the Senate floor, Bernanke backers warned that voting him down risked sparking turmoil in U.S. and foreign markets and thwarting a budding economic recovery. They said the Fed chairman deserved an opportunity to finish what he started.

“To vote against confirmation could unnerve investors and exacerbate economic uncertainty in the marketplace, which is exactly what we do not need at this time,” said Sen. Robert Menendez, Democrat of New Jersey. “We need the wisdom of patience,” he said. “Let us not judge the man or the work prematurely.”

UPDATE:

The Senate has voted to confirm Bernanke for a second term as the Chairman of The Federal Reserve; 70-30.  I will post the voting record for your information and ammunition as it becomes available. (Searching….searching…searching…)

(4:36pm est.  Waiting for vote to be posted on Senate webpage.  Expect 20 minute wait.)

Senate voting page for Bernanke’s Confirmation – here.

U.S. Senate Roll Call Votes 111th Congress – 2nd Session

as compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the Senate

Vote Summary

Question: On the Nomination (Confirmation Ben S. Bernanke To Be Chairman Of The Board of Governors of the Federal Reserve System )
Vote Number: 16 Vote Date: January 28, 2010, 03:45 PM
Required For Majority: 1/2 Vote Result: Nomination Confirmed
Nomination Number: PN959
Nomination Description: Ben S. Bernanke, of New Jersey, to be Chairman of the Board of Governors of the Federal Reserve System for a term of four years
Vote Counts:YEAs70
NAYs30
Vote SummaryBy Senator NameBy Vote PositionBy Home State

Alphabetical by Senator Name

Akaka (D-HI), Yea
Alexander (R-TN), Yea
Barrasso (R-WY), Yea
Baucus (D-MT), Yea
Bayh (D-IN), Yea
Begich (D-AK), Nay
Bennet (D-CO), Yea
Bennett (R-UT), Yea
Bingaman (D-NM), Yea
Bond (R-MO), Yea
Boxer (D-CA), Nay
Brown (D-OH), Yea
Brownback (R-KS), Nay
Bunning (R-KY), Nay
Burr (R-NC), Yea
Burris (D-IL), Yea
Byrd (D-WV), Yea
Cantwell (D-WA), Nay
Cardin (D-MD), Yea
Carper (D-DE), Yea
Casey (D-PA), Yea
Chambliss (R-GA), Yea
Coburn (R-OK), Yea
Cochran (R-MS), Yea
Collins (R-ME), Yea
Conrad (D-ND), Yea
Corker (R-TN), Yea
Cornyn (R-TX), Nay
Crapo (R-ID), Nay
DeMint (R-SC), Nay
Dodd (D-CT), Yea
Dorgan (D-ND), Nay
Durbin (D-IL), Yea
Ensign (R-NV), Nay
Enzi (R-WY), Yea
Feingold (D-WI), Nay
Feinstein (D-CA), Yea
Franken (D-MN), Nay
Gillibrand (D-NY), Yea
Graham (R-SC), Yea
Grassley (R-IA), Nay
Gregg (R-NH), Yea
Hagan (D-NC), Yea
Harkin (D-IA), Nay
Hatch (R-UT), Yea
Hutchison (R-TX), Nay
Inhofe (R-OK), Nay
Inouye (D-HI), Yea
Isakson (R-GA), Yea
Johanns (R-NE), Yea
Johnson (D-SD), Yea
Kaufman (D-DE), Nay
Kerry (D-MA), Yea
Kirk (D-MA), Yea
Klobuchar (D-MN), Yea
Kohl (D-WI), Yea
Kyl (R-AZ), Yea
Landrieu (D-LA), Yea
Lautenberg (D-NJ), Yea
Leahy (D-VT), Yea
LeMieux (R-FL), Nay
Levin (D-MI), Yea
Lieberman (ID-CT), Yea
Lincoln (D-AR), Yea
Lugar (R-IN), Yea
McCain (R-AZ), Nay
McCaskill (D-MO), Yea
McConnell (R-KY), Yea
Menendez (D-NJ), Yea
Merkley (D-OR), Nay
Mikulski (D-MD), Yea
Murkowski (R-AK), Yea
Murray (D-WA), Yea
Nelson (D-FL), Yea
Nelson (D-NE), Yea
Pryor (D-AR), Yea
Reed (D-RI), Yea
Reid (D-NV), Yea
Risch (R-ID), Nay
Roberts (R-KS), Nay
Rockefeller (D-WV), Yea
Sanders (I-VT), Nay
Schumer (D-NY), Yea
Sessions (R-AL), Nay
Shaheen (D-NH), Yea
Shelby (R-AL), Nay
Snowe (R-ME), Yea
Specter (D-PA), Nay
Stabenow (D-MI), Yea
Tester (D-MT), Yea
Thune (R-SD), Nay
Udall (D-CO), Yea
Udall (D-NM), Yea
Vitter (R-LA), Nay
Voinovich (R-OH), Yea
Warner (D-VA), Yea
Webb (D-VA), Yea
Whitehouse (D-RI), Nay
Wicker (R-MS), Nay
Wyden (D-OR), Yea
Vote SummaryBy Senator NameBy Vote PositionBy Home State

Grouped By Vote Position

YEAs —70
Akaka (D-HI)
Alexander (R-TN)
Barrasso (R-WY)
Baucus (D-MT)
Bayh (D-IN)
Bennet (D-CO)
Bennett (R-UT)
Bingaman (D-NM)
Bond (R-MO)
Brown (D-OH)
Burr (R-NC)
Burris (D-IL)
Byrd (D-WV)
Cardin (D-MD)
Carper (D-DE)
Casey (D-PA)
Chambliss (R-GA)
Coburn (R-OK)
Cochran (R-MS)
Collins (R-ME)
Conrad (D-ND)
Corker (R-TN)
Dodd (D-CT)
Durbin (D-IL)
Enzi (R-WY)
Feinstein (D-CA)
Gillibrand (D-NY)
Graham (R-SC)
Gregg (R-NH)
Hagan (D-NC)
Hatch (R-UT)
Inouye (D-HI)
Isakson (R-GA)
Johanns (R-NE)
Johnson (D-SD)
Kerry (D-MA)
Kirk (D-MA)
Klobuchar (D-MN)
Kohl (D-WI)
Kyl (R-AZ)
Landrieu (D-LA)
Lautenberg (D-NJ)
Leahy (D-VT)
Levin (D-MI)
Lieberman (ID-CT)
Lincoln (D-AR)
Lugar (R-IN)
McCaskill (D-MO)
McConnell (R-KY)
Menendez (D-NJ)
Mikulski (D-MD)
Murkowski (R-AK)
Murray (D-WA)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Reed (D-RI)
Reid (D-NV)
Rockefeller (D-WV)
Schumer (D-NY)
Shaheen (D-NH)
Snowe (R-ME)
Stabenow (D-MI)
Tester (D-MT)
Udall (D-CO)
Udall (D-NM)
Voinovich (R-OH)
Warner (D-VA)
Webb (D-VA)
Wyden (D-OR)
NAYs —30
Begich (D-AK)
Boxer (D-CA)
Brownback (R-KS)
Bunning (R-KY)
Cantwell (D-WA)
Cornyn (R-TX)
Crapo (R-ID)
DeMint (R-SC)
Dorgan (D-ND)
Ensign (R-NV)
Feingold (D-WI)
Franken (D-MN)
Grassley (R-IA)
Harkin (D-IA)
Hutchison (R-TX)
Inhofe (R-OK)
Kaufman (D-DE)
LeMieux (R-FL)
McCain (R-AZ)
Merkley (D-OR)
Risch (R-ID)
Roberts (R-KS)
Sanders (I-VT)
Sessions (R-AL)
Shelby (R-AL)
Specter (D-PA)
Thune (R-SD)
Vitter (R-LA)
Whitehouse (D-RI)
Wicker (R-MS)
Vote SummaryBy Senator NameBy Vote PositionBy Home State

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