Thursday, September 22, 2011

Forget bashing bankers, bash Bernanke

Twisted mind © fintag

News comments:
It's a tough job.

The Purpose of the Fed as per wikipedia is to stop financial panics. 1907 was a big one and the Fed was created in response to this. So let us see if the Fed is doing what it should be doing

To address the problem of banking panics
...from what is happening in the markets the Fed is causing a banking panic

To serve as the central bank for the United States
...seems to serving China more than the USA

To strike a balance between private interests of banks and the centralized responsibility of government
...the fed bailed out the banks so they could pay bonuses and so served the private interests of a few bankers

To supervise and regulate banking institutions
...regulation is getting worse and supervision is about the same; thank goodness UBS isn't US based

To protect the credit rights of consumers
...the foreclosure debacle indicates anyone who has debt should be saved so yes they are helping out the indebted

To manage the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of

maximum employment
...given anyone out of work more than 12 months is excluded from the stats, the Fed is way off full employment. The only people who have jobs are bankers.

stable prices, including prevention of either inflation or deflation[32]
...inflation pumping away at 5% this is a big failure

moderate long-term interest rates
...what rates are those? Twist and shout

To maintain the stability of the financial system and contain systemic risk in financial markets
...the most volatile markets for years (VIX) so a big flop there

To provide financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system

To facilitate the exchange of payments among regions
...a big tick
To respond to local liquidity needs
...a big QE tick
To strengthen U.S. standing in the world economy
...mmmm, not looking good from where we are

2/10 is a poor showing.

Bernanke is useless. He should be the CEO of UBS where he would feel at home.

Today's shorts:
Anything to do with poker.

Today's longs:
Anything that is hard to the touch.

Operation Punk Rock is just around the corner.


mike said...

Well said. Its not the banks that are the problem, its the vast debts that have been accumulated by the government.

I think you'd like this article which talks of the scandal of government debt: