Wednesday, January 14, 2009

Translation: Bernanke to Plain English

MarketTicker is nothing if not a bomb-thrower. Samples, deriving from Bernanke's London School of Econ speech:

"....although the subprime debacle triggered the crisis, the developments in the U.S. mortgage market were only one aspect of a much larger and more encompassing credit boom whose impact transcended the mortgage market to affect many other forms of credit. Aspects of this broader credit boom included widespread declines in underwriting standards, breakdowns in lending oversight by investors and rating agencies, increased reliance on complex and opaque credit instruments that proved fragile under stress, and unusually low compensation for risk-taking."

In English: We had the responsibility to monitor banks, set reserve requirements and keep leverage ratios reasonable. We abdicated all of the above on purpose and got in on the scam because our various Fed Boards are all made up of former, current, or wanna-be-future bankers who make lots of money by cheating the rules of sound banking. This produced a huge credit boom, and it was entirely intentional. Oh, and we knew it would go bust too - we didn't care

Of course, that was largely the work of Greenspan, the Ayn Rand disciple. Too bad Bernanke landed the Dream Job at exactly the wrong time, eh?

There's plenty more at the link. You don't have to agree with all of it (I don't), but if you need to burnish your cynic-skills, it's a good place to start.

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