Ping

Agree with the rest of your post the Fed’s potential new powers are unearned/unwarranted/unauthorized.

This seems rather disingenuous in a mark to market world. If a large investment bank failed and its creditors tried to liquidate their collateral at the same time, it would cause massive writedowns across the whole (global) financial system with all the consequences for capitalisation that we’ve seen in this crisis. Even the prospect of liquidation would put serious pressure on prices.

First, I do not see this as regulatory grab by the Fed so much as a backdoor soft coup by the ibanks: they just acquired operationally permanent, unlimited, unregulated, and unquestioned lender-or-last-resort and recapitalization access to the Fed. In short, they just _took over the Fed_, functionally speaking since they neither tell the Fed what they do or are seriously constrained by regulation but can force the Fed to back them, now and forever. That is extraordinarily unacceptable, especially as an undebated, stroke-of-the-pen action.

Second, the Bushies via Paulson had been proposing their personal ‘Let them sell bonds’ non-regulatory loinclout for the ibanks—which has gone nowhere with Congress of the public for good reason: the Bushies have negative political capital, and the policies were weak and stinking. Soooo in typical Bush-Cheney macro-arrogance we now find the same goals pursued through an end around cronies’ bargain between an Executive agency and a quasi-Executive agency _specifically structured so as to exclude Congressional action_. That’s indescribable. The public cannot and will not get anything like good governance from such a process; rather, we will get unrestricted public bailouts of failed plutocrats on a crony capitalist basis.

Third, I suspect this Thieves’ Accord was pushed through specifically because the Fed expects the imminent failure of a major ibank and wants to have some kind of public fiction of authority to wave about on a handbill when they open the till massively to step in. Put another way, Lehman’s is gonna blow, and the Fed plans to whap down it’s wallet preemptively using this rag of lies as its ‘covering authority.’

All of this speaks extremely ill of Ben Bernanke, I might add with some regret. The law and consequences be damned, he’s got his ‘nukes’ and he means to use them rather then let them moulder in their silos. The man has just completely lost his head, to me, in making this move. Or to pull these thoughts together, he is now manifestly a creature in pawn to the ibank CEO’s, Big Money’s Bitch. Ben, those men are Not Your Friends. They are not your partners. They are your enemies, and the economy would be better without them. Getting there, admittedly, is the Sucktastic Journey. However, giving them drawing rights to your drawers is not in the public interest.

Wiping out the bankers bread and butter is akin to passing a flat tax and putting the IRS out of business.

Please, BS failing would have taken out the whole world of banking due 30, 40, 50+ leveraging. There is not enough paper currency in the world to payoff when that debt comes due.

THIS SHIT IS GREAT!!! I’M LAUGHING OUT LOUD!!! THIS SHOULD BE PASTED ON THE FOREHEADS OF ALL THE PROGRAMMED ROBOTS AT CNBC AND FOX FINANCE, OR WHATEVER THE HELL ITS CALLED. I’M LAUGHING IMAGINING THE SIGHT OF LARRY KUDLOW SHORT CIRCUITING LIVE ON THE AIR!!! Yves, this should be put in a time capsule so that future generations of archeologists know that the once great civilization of the United States of America had a sense of humor as it was headed toward the executioners ax…

You’re absolutely right. The Fed must return the keys to our mint peacefully, while they still have a chance.

The banks not only want a piece of the action, they want all the action.

The Government as it is currently constituted does not have the balls to take on the privately owned and operated Federal Reserve. Remember that Bush’s lineage is of bankers and most of Congress doesn’t know diddly about the creation of money.

What ought to happen is the nationalization of the Federal Reserve whereby the US Government can produce money without interest as is pronounced in the Constitution of the United States.

We have given away our right to print our money to the private banking industry. This is the biggest subsidy in the United States and in the world. Trillions and trillions have been given the bankers to line their own pockets.