16 replies to this topic

[A-ha]

Just before I was gonna make the call of the decade in a few days,
I hope they didn't sniffed it out. I had waited it for 9 years ...

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Saturday January 6, 3:43 am ET
By Martin Crutsinger, AP Economics Writer
Ben Bernanke Says Bank Regulation Gives Federal Reserve Expertise to Address Financial Crises

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke said Friday that the Fed's job of regulating the nation's banks gives the central bank more expertise in dealing with financial crises.

In a speech to an economic conference in Chicago, Bernanke argued that the United States gets significant benefits in having its central bank also involved in regulating banks. That differs from the system in place in other countries where the central bank deals only with monetary policy -- the setting of interest rates -- and leaves bank regulation to other agencies.

"The supervisory authority of the Fed has significant collateral benefits in helping it carry out its responsibilities for financial stability," Bernanke said in his speech, copies of which were released in Washington.

Major economic powers such as Britain and Japan have chosen to place the regulation of the financial system with a single agency and leave their central banks with the sole job of setting interest-rate policies.

But Bernanke argued that the U.S. system, which gives the Fed a leading role in bank regulation, provides substantial benefits both in terms of acting to prevent financial crises and in dealing with crises if they do erupt.

"When financial stresses emerge and public action is warranted, the Fed is able to respond more quickly, more effectively and in a more informed way than otherwise would be possible," Bernanke said in remarks to the Allied Social Science Association annual meetings in Chicago.

Edited by xD&Cox, 06 January 2007 - 06:40 PM.

[xe2dy]

Reads like the Fed is giving reasons for it's existence. Bad news on the horizon?

[snorkels4]

sounds like theyre goin to step o the gas pedal

[A-ha]

sounds like theyre goin to step o the gas pedal

It sounds more like they are checking airbags and belts before ......

Edited by xD&Cox, 06 January 2007 - 08:00 PM.

[James Quillian]

Just before I was gonna make the call of the decade in a few days,
I hope they didn't sniffed it out. I had waited it for 9 years ...

--------------------------------------------

Saturday January 6, 3:43 am ET
By Martin Crutsinger, AP Economics Writer
Ben Bernanke Says Bank Regulation Gives Federal Reserve Expertise to Address Financial Crises

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke said Friday that the Fed's job of regulating the nation's banks gives the central bank more expertise in dealing with financial crises.

In a speech to an economic conference in Chicago, Bernanke argued that the United States gets significant benefits in having its central bank also involved in regulating banks. That differs from the system in place in other countries where the central bank deals only with monetary policy -- the setting of interest rates -- and leaves bank regulation to other agencies.

"The supervisory authority of the Fed has significant collateral benefits in helping it carry out its responsibilities for financial stability," Bernanke said in his speech, copies of which were released in Washington.

Major economic powers such as Britain and Japan have chosen to place the regulation of the financial system with a single agency and leave their central banks with the sole job of setting interest-rate policies.

But Bernanke argued that the U.S. system, which gives the Fed a leading role in bank regulation, provides substantial benefits both in terms of acting to prevent financial crises and in dealing with crises if they do erupt.

"When financial stresses emerge and public action is warranted, the Fed is able to respond more quickly, more effectively and in a more informed way than otherwise would be possible," Bernanke said in remarks to the Allied Social Science Association annual meetings in Chicago.

What do you think constitutes a financial crisis in the mind of the FED?

I don't think the U.S. economy can weather even a 5% correction in stock prices.

If consumer spending is dependent upon the growth in asset values, a recession can only be prevented by keeping stocks in an uptrend.

So, any correction is a financial crisis.

James

[jawndissedi]

I don't know what they're waiting for -- in CA, the crisis is now. The following post appeared recently on one the mortgage broker boards I see from time to time:

“I decided to read thru this whole thread before i threw myself into this since i know some of the stronger personalities both loan officer and AE wise already have a ego interest in being right/on the moral highground of this issue… i can see where some say stated is for lighter documentation in the case of someone who runs a business (w2 stated is crap and while ive done them to make my paycheck.. they should be banned). But i also agree that that if it tightened down regulationwise in California the market would crap out overnight for the next 2-3 years since very few could buy a home full doc the correction would be horrendous, long lasting, and not pretty especially for schmucks who got 2 and 3 year arms on a stated loan and now cant refiance full/lite doc and have to eat the adjustable payment. Stated programs are just that… you STATE the income that seems reasonable and the underwriter either swallows it, counter offers, or rejects it. Its not like the banks are idiots.. they spend millions on credit risk assessment when they sell this crap on the secondary market to hedge funds. If a large lender has idiot underwriters who like it and approve it… and ivy league bond traders are stupid enough to trade it and buy it in large pools… how can it come back to us and people say “ohhh.. the loan officers are the evil ones..” if a deal doesnt make sense the underwriter or the manager at the lender should put the brakes on it. The stated loan / inflation phenomenon has two sides… many in california have GREATLY profited (i mean homeowners too who sold their home and bought a huge spread in another state) and if they tightened down and made us afraid of pushing stated loans you can just chalk up a nice fat recession or write the book about the 2nd great deperession of the new millenium.”

Edited by jawndissedi, 06 January 2007 - 08:32 PM.

[jawndissedi]

Oh yes, and if you think lending standards have really gotten tighter, check out this thread from the same board:

“who does 14 mo out of BK…With another BK back in 11/97 both chapter 7, 100% LTV 626 Fico on a purchase in WA state?”

“Yeah that’s just it everyone says they used to be able to but with some of the companies like Ownit and Seabring going under it seems everyone is tightening up on what they’ll do.”

“We can still do that scenario. I just double checked w/ my UW before posting to make sure I hadn’t missed anything.”

“We have always been able to do BK’s 1 day out with a 580 mid score as long as they have trade lines.”

“We may be able to help if this is a Full Doc loan.”

“I can also still do it. 1 day out of BK - need 600 CS to do 100%.”

“Is it full doc? I should be able to do this.”

“Are you looking for option arm. We have subprime option arm bankrupcy OK. Give us more information as to the product that you are looking for. We may be able to help.”

Subprime credit is the crack cocaine of the U.S. economy: when Mr. & Mrs. J6P start jonesing for their next fix, no price is too high . . .

[A-ha]

Besides impending implosion of the real-estate, it is the inevitable deflation of the global economies that will eventually put not only US but most of the western markets into a deep depression that could last longer than the great depression of 30s. Yes it is once again the bubble is bursting but this one is the inflation bubble.

Wait till china starts dumping US bonds... That will be a nice catalyst for the ongoing reaction. Also liquidations of the dollar reserves by several major central banks around the globe will eventually cause the foreign investors here to panic at some point. That excess liquidity will not contribute to the liquidity in the US unlike many thinks. Because once the confidence is gone, the money will find safer places. That time, Sun once again will rise from the east.


Although Chinese market is now in corrective phase, I believe Shanghai index is where S&P was in early 80s. After a brief and sharp correction , say %30, that market may triple or quadruple in a few years.

Just before I was gonna make the call of the decade in a few days,
I hope they didn't sniffed it out. I had waited it for 9 years ...

--------------------------------------------

Saturday January 6, 3:43 am ET
By Martin Crutsinger, AP Economics Writer
Ben Bernanke Says Bank Regulation Gives Federal Reserve Expertise to Address Financial Crises

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke said Friday that the Fed's job of regulating the nation's banks gives the central bank more expertise in dealing with financial crises.

In a speech to an economic conference in Chicago, Bernanke argued that the United States gets significant benefits in having its central bank also involved in regulating banks. That differs from the system in place in other countries where the central bank deals only with monetary policy -- the setting of interest rates -- and leaves bank regulation to other agencies.

"The supervisory authority of the Fed has significant collateral benefits in helping it carry out its responsibilities for financial stability," Bernanke said in his speech, copies of which were released in Washington.

Major economic powers such as Britain and Japan have chosen to place the regulation of the financial system with a single agency and leave their central banks with the sole job of setting interest-rate policies.

But Bernanke argued that the U.S. system, which gives the Fed a leading role in bank regulation, provides substantial benefits both in terms of acting to prevent financial crises and in dealing with crises if they do erupt.

"When financial stresses emerge and public action is warranted, the Fed is able to respond more quickly, more effectively and in a more informed way than otherwise would be possible," Bernanke said in remarks to the Allied Social Science Association annual meetings in Chicago.

What do you think constitutes a financial crisis in the mind of the FED?

I don't think the U.S. economy can weather even a 5% correction in stock prices.

If consumer spending is dependent upon the growth in asset values, a recession can only be prevented by keeping stocks in an uptrend.

So, any correction is a financial crisis.

James

Edited by xD&Cox, 06 January 2007 - 09:11 PM.

[A-ha]

a few charts showing the effect of inflation

http://xtrends.blogs...relativity.html

[dcengr]

Here's a real puzzle. Most of the problems are CAUSED because of the Fed and their stupid liquidity wash. Ben thinks he can control the financial institutions from harm because he thinks it was able to do so in 87 and 00 slide.. What he actually did was cause the housing bubble, and now he's going to try and fix any crisis by washing it with more money. Sometimes financial crisises need to resolve itself on its own, otherwise people never learn or the complacency grows and grows into a bigger animal by giving the illusion of a safety net beneath it. There's philosophical debate whether financial institutions are man made animals or naturally occuring phenomenons. I tend to think its the later, not the former. Hence any meddling may hold back the tide for a while, but like the dykes in New Orleans, just makes the problem bigger when Katrina hits by giving everyone that sense of security. My guess is at some point in the future, we're going to see either super inflation or super deflation (my guess is former) because of all the meddling, mainly because I think Ben can fix ANY problem by printing more money. Btw XD, make the call anyways. If it doesn't work, so what

Edited by dcengr, 06 January 2007 - 10:49 PM.