Friday, March 6, 2009

Vote of No Confidence

Bill Bonner's take on our Treasury Secretary:

Meanwhile, the cop who had the Wall Street beat when the biggest heist in history was going on...and who engineered the loans to AIG and now the chief of police. Tim Geithner said he was working night and day on Obama's rescue plan, "because we know how directly the future of our economy depends on it."

But as our old friend Marc Faber points out, neither Mr. Geithner, Mr. Bernanke, nor any of the men who rule us, seems to have any idea what they are talking about. As Chairman of the New York Fed, writes Faber, Mr. Geithner "did not seem to 'know,' in the period preceding the crisis, how the future of the economy depends on a sound financial system!"

Faber goes on to explain that not only did the key players fail to understand what was going on - when it was obvious to him, us and millions of others - they then misdiagnosed the problem and prescribed the wrong treatment. They thought it was a liquidity crisis; so they threw billions in cash at dying institutions.

At every step of the way, the feds have been clueless, hopeless, and defenseless. It was the feds who lent money at negative real interest rates for more than five years. It was the feds who pretended to "regulate" and "control" the marketplace...claiming to protect investors from fraud and malfeasance. It was the feds who licensed the banks...set banking standards...blessed derivatives because they "distributed risk more widely" (Greenspan)...urged people to buy adjustable rate mortgages (Greenspan again)...praised sub-prime lending because it encouraged home ownership...and even told consumers to "go out and buy an SUV" in order to give the economy a boost (Fed governor Robert McTeer).

The feds piled up the tinder...poured on the gasoline...and lit the match. And now, what do you know...they've all joined the fire department!

And we're supposed to have confidence in him? Why does Obama?

No comments:

Post a Comment