Bernanke Says He Erred in Gauging Mortgage Fallout

[Zenlitened]

Source: Associated Press

Federal Reserve Chairman Ben Bernanke acknowledges he was wrong in believing that there would be limited fallout to financial markets from risky mortgages that soured after the housing market's collapse.

''I and others were mistaken early on in saying that the subprime crisis would be contained,'' Bernanke said in an article in the Dec. 1 issue of The New Yorker magazine.

''The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict,'' he said in the piece titled ''Anatomy of a Meltdown.''


Read more: http://www.nytimes.com/aponline/business/AP-Bernanke-Meltdown.html

---

Translation: Bernanke still in deep denial.

Anyone who was willing to take an honest, objective look could see that the tangle of gasoline-soaked derivatives piled up around the shaky mortgages was a conflagration waiting to happen.

Anyone. But you had to be willing to look.

[Bushies gotta go]

1. hahaha. funny

funny how most of us know-nothing peons out here in Nowhereville could have told you "experts" that a long time ago. Yeah, your credibility hasn't suffered any with that statement, you idiot... cuz with me you never had any anyway.

[UpInArms]

2. chopper ben is such a neophyte

he thinks that his ability to print money will solve everything - he thought "I'm not out of money, I can still print it!" would keep all the truths about his unworkable failure of free market thinking from becoming obvious to everyone - what a fool - at some point in life, everything does catch up to the truth and the lies are exposed and the ignorance is revealed and become reviled

But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.

[earth mom]

3. WTF?! Is this for real? If so this dude is fucking clueless!

:wtf:

[MadMaddie]

4. Bernake and Paulson are the "Heck-of-a-job Brownies"

of the financial industry. They have proven they are utter failures. They have pissed $350 million dollars down the toilet and they can't account for it. As far as I am concerned these are criminal acts...

[ooglymoogly]

18. That is bullion with a b....and that is just the tip of the

iceberg....just wait till things really start shaking out. What these thugs have really done. It is and will be stunning. Taking down the greatest nation in the history of man and with malice aforethought.

[Esra Star]

5. He should have been able to detect that it was just

a very large pyramid scheme. They always end in tears.
It is another case of:- take your pick....lying or stupid.

[UpInArms]

6. take your pick....lying or stupid

those are not mutually exclusive - they are stupid liars

[wordpix]

10. "Stupid liars:" as are so many in this criminal BushCo maladmin

[JDPriestly]

29. As many people have recently discovered, Wall Street is just

one big happy pyramid scheme with the CEOs at the top of the pyramid taking home all the cash.

Now, there was a time when investors made money by buying stock in companies that paid dividends. The income was the dividends. But the investors did not make money fast enough that way so another scheme was developed.

Under the new scheme, people bought stocks not to hold them and get income from the dividends but in order to sell them at a higher stock price regardless of the dividens. The whole idea was to buy a stock, hold it just long enough to find a sucker who wanted it badly enough to pay more for it than you had paid. Just what the stock was, what the company did wasn't all that important.

And of course the new scheme of selling stocks for profit rather than holding stocks for income worked really well once the government cooperated by providing incentives for managed mutual funds and pension funds. A lot of money flowed from savers and small investors including millions of employees into the hands of brokers and fund managers who could take a bit off the top in the form of a commission every time a stock was traded.

That added kind of a horizontal aspect to the pyramid scheme. As if there were little horizontal pyramids growing out from the sides of the big pyramid of the stock market. And so, here we are. Last time this happened the tech stocks, the dot coms got the blame -- all speculative you know. And now it is the sub-prime mortgage business that is getting the blame. But the real blame belongs on the shoulders of those who sell worthless securities by promising that the buyers will get rich with little or no effort. Doesn't happen.

That's not capitalism you can believe in. That's a pyramid scheme.

[Esra Star]

30. nicely documented. And "naked shorting" is

a pyramid scheme on steroids.

http://en.wikipedia.org/wiki/Naked_short_selling

[gratuitous]

7. Noooooo!

"Okay, so I fucked up royally. I got it. I can still fix it. Just trust me."

My proposal is to offer Helicopter Ben a cigarette and a blindfold.

[OwnedByFerrets]

8. Thats a pretty large FAIL Ben. Might better quit and let someone who

is competent take over. Im you you have "moved" enough for a nice retirement by now.

[bemildred]

9. Lotsa people predicted it, how difficult can it really be? nt

[wordpix]

11. next prediction "just folks" are making: don't ignore the $10 TRILLION DEFICIT

I think Paulson-Bernanke-BushCo are ignoring THAT ONE, too.

[Lasher]

12. Well no shit.

It was clear all along the dumbass didn't have a clue. Just look up some of the things he said just a few months ago. Looks like Condi Rice must have written this 'confession' for him.

[Jackpine Radical]

13. You are misjudging Bernanke, Paulson & Co. You already know the acronym for it:

LIHOP

[Festivito]

14. Then would you believe: Plausible deniability as an article title?

What a tool.

[Tansy_Gold]

15. Correction: he is not a tool

He is a lying sack of shit of a tool.


Tansy Gold, unable to find words of sufficient condemnation and settling therefore for lying sack of shit

[Chisox08]

16. Wow another idiot in charge of our financial system

Ben needs to go it is his job to see something like the current economic crises happening.
I just love seeing the stupid look on Bernanke's and Mr. Hankey the Christmas Treasury Poo when they are bing grilled by Congress.

[MindMatter]

17. These guys still don't get it

Or at least they aren't willing to state the simple truth. This was not a "subprime lending crisis". Sure the lending did get out of control, and that is a problem. But it isn't the BIG problem. The BIG problem is all those asinine derivatives. For every dollar in bad subprime debt, there are $5-$10 of debt swaps, and the infamous companies were carrying all that risk.

It was a casino game and they lost. No, wait. They did fine. They got #350,000,000,000. WE lost.

[BlueJac]

19. Just another asshole trying to save his job......

Clueless fools and believers in the free market.....Go read a book fool!! Get some learnin'

[Jackpine Radical]

20. Breaking: Titanic Capt. Edward Smith says he erred in gauging distance of iceberg.

[Monk06]

21. I feel sorry for helicopter money boy. I think he should get a $2 Billion bonus for fucking up.

[gravity]

22. You guys are acting like monday morning quarterbacks

Making accurate economic and financial predictions is damn near impossible to do.

Of course everything seems obvious in hindsight, but it is never that way when you are dealing with it. There are many experts who were taking hard objective looks at the financial situation, and got it completely wrong. If it was so simple, we wouldn't have gotten into this crisis to begin with.

Bernanke deserves criticism but this idea that he should have easily spotted this mess is just absurd.

[Roland99]

23. Then explain how I, a mere computer programmer, called this shit about 4 years ago?

[Lucky Luciano]

24. 4 years ago, had you shorted the credit markets

you would have had your face ripped off. No way you could have held your incredibly big losing trade on until late 2007 while adding to it as the trade went against you. You would have received a tap on the shoulder from your manager telling you to shut down the trade after losing a ton - then you would be canned.

[gravity]

25. What did you call exactly?

Please be specific

[Roland99]

31. A possible depression but a probable deep recession...triggered by...

bogus sub-prime mortgages and having a domino effect.

A friend of mine was working at a mortgage broker and was telling me of how much of their business was going to zero-down, interest-only loans and to people who were literally days out of bankruptcy. How fees were tacked on like mad. Etc.

[kirby]

26. Same here. I bailed out around Dow 12,000...

Anyone could see housing bubble and hedge funds were doomed...

[RUMMYisFROSTED]

32. Search SMW thread.

Pointed out every day for 3 or more years there. Every day.

:shrug:

[girl gone mad]

33. Come on.

It was blindingly obvious to anyone who was paying attention.

I could point you to a few dozen financial blogs where this crisis was predicted. I can show you economic papers, including a couple from the world bank, that predicted the crisis with a high level of accuracy.

I have some deep ideological differences with this man, but he gave frequent television interviews over the last couple of years in which he called the crisis with specificity:

http://www.youtube.com/watch?v=2I0QN-FYkpw

[jayfish]

34. Ever Heard Of Peter Schiff?

http://www.youtube.com/watch?v=2I0QN-FYkpw

Jay

[Psephos]

36. Schiff also predicts that Obama will worsen, not resolve, the underlying problems

http://www.youtube.com/watch?v=sMdF1CiQAkA&feature=related

[jayfish]

37. Point??? -NT-

Jay

[Psephos]

38. I dunno...what's the "point" of additional information on any topic? Seems useful to me. n/t

[jayfish]

39. That Doesn't Really Tell Me Anything But I Will Say This;

he comes off as a total id10t in that video. He's hoping that another Raygun comes back in 2013? Gimme a break. Raygun is the seed that started this "live on credit" lifestyle. Doesn't take away from the fact he was right, early on, about our current situation though.

Jay

[Waiting For Everyman]

27. It's called common sense. Try it sometime, Bernie.

This only proves my longstanding contention that nobody is worth the kind of salaries these chumps get paid. Nobody, I don't care how talented they are, is worth thousands or hundreds of thousands of other people. Bull!

[Seldona]

28. This after nearly three TRILLION spent, or promised?

We are in some seriously deep doodoo here.

[riderinthestorm]

35. And Bernanke is a Depression era expert.

A guy who is steeped in depression era economics, and how to pull out of that kind of financial turmoil.

He's either criminally culpable for the so called "bail out plan" or he was deliberately left out of the loop by the rest of the Bush Admin criminals raiding the treasury.

I am flabbergasted that he would make such a statement. He MUST have had access to the same data we had, didn't he? He MUST have had access to regular Joe and Jane America - any one of whom could have told him we were literally in deep shit. Putting on my tin foil hat, Bernanke was never one of BFEE's playas?! Say it ain't so, Ben..... :scared: