Former Fed Guy Skewers Bernanke
The Market Ticker ® - Commentary on The Capital Markets
Posted 2011-12-28 13:28
by Karl Denninger
in Federal Reserve
Ignore this thread
Former Fed Guy Skewers Bernanke
 

Well look what we have here....

America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing.

...

The two central banks are engaging in this roundabout procedure because each needs a fig leaf. The Fed was embarrassed by the revelations of its prior largess with foreign banks. It does not want the debt of foreign banks on its books. A currency swap with the ECB is not technically a loan.

Actually, The Fed claimed it was not bailing Europe out in direct conversations with Senators at a closed-door meeting. 

It's convenient that Bernanke wasn't under oath in recorded testimony when he made those comments isn't it?

The reality of the so-called "bailout", however, is small.  We're talking about $60 billion, more or less, which is tiny in the grand scheme of things.

This makes one wonder "why"?  If it's just year-end shenanigans, well then it is.  But what if it's a trial balloon -- to see if Congress -- or anyone else -- calls Bernanke on it?

If so then we better pay attention eh?

Discussion below (registration required to post)
 

Main Navigation
Full-Text Search & Archives
Archive Access
Get Adobe Flash player





Blogtalk 3:30 CT Mondays
Items To Look At


Discuss The Capital Markets along with daily technical analysis with our Gold Donor program.

Where We Are, Where We're Heading (2013) - The annual 2013 Ticker

Links and Blogroll
Our policy on reciprocal links: Send us an email with your information and why you think your blog or news site would make a good addition - in most cases reciprocal link requests will be granted.
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Looking for "The Best of Market Ticker"? Check out
Ticker Classics.

Visit the forum to discuss this and other investing-related topics; see the FAQ on the forum for information about Gold Donor status including access to our technical analysis video server.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.

Submissions may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Leads on stories of current economic and political interest are always welcome. Our fax tip line is 850-897-9364; please include contact information with your transmission.

 
Comments.......
User: Not logged on
Login Register Top Blog Top Blog Topics FAQ
User Info Former Fed Guy Skewers Bernanke in forum [Market-Ticker]
Preidt2
Posts: 552
Incept: 2009-07-31
Green
spokane/wash
Report This As A Bad Post Add To Your Ignored User List

fed can't wait for things to collapse adding more debt til there is NO resultion

but slavery

----------
Puppets Under Destruction
Icanhasbailout
Posts: 9939
Incept: 2009-03-10
Green A True American Patriot!
Imaginationland
Report This As A Bad Post Add To Your Ignored User List
Quote:
It's convenient that Bernanke wasn't under oath in recorded testimony when he made those comments isn't it?


Why does it matter? Bernanke has lied under oath enough that if he was in any serious danger of being charged with perjury it would have happened quite some time ago.

----------
Jstanley01
Posts: 8182
Incept: 2008-07-30
Silver A True American Patriot!
San Antonio, Texas
Report This As A Bad Post Add To Your Ignored User List
Tickerguy wrote..
This makes one wonder "why"?
If nothing else, Bennie Boy wants to make sure his bankster pals -- no matter what their race, color or creed may be -- all know that...


----------
You can't cheat an honest man. ~P.T. Barnum

Ex_vrwc
Posts: 2
Incept: 2009-11-03

Phoenix, AZ
Report This As A Bad Post Add To Your Ignored User List
Here is my skewering of Bernanke and his policy:

Margolane
Posts: 17
Incept: 2010-03-21

Nebraska
Report This As A Bad Post Add To Your Ignored User List
O'Driscoll was interviewed on CNBC today.

http://video.cnbc.com/gallery/?video=300....
Marsgate
Posts: 107
Incept: 2008-02-20

Report This As A Bad Post Add To Your Ignored User List
Since we are eyeballing swap lines...

Could you review these youtubes Karl? I thought they were very interesting and would like your opinion. Five in total. I know you are very busy, but would very much appreciate your opinion. Could it be that the swaps are coming out of the NYFed? Its been a few months since I have viewed them...I'm going to give them a review tomorrow. Time permitting.


http://www.marketskeptics.com/2011/06/th....
Jocknomore
Posts: 184
Incept: 2009-01-03

Chicago
Report This As A Bad Post Add To Your Ignored User List
Ben is following his November 21, 2002 speech to beat deflation exactly. The 4th protocol was foreign asset purchases, the fifth is to devalue the dollar.

http://www.federalreserve.gov/boarddocs/....
Login Register Top Blog Top Blog Topics FAQ