When you are on track to spend a few trillion dollars, communication is everything. People have to feel they are getting something for their hard earned money. That progress is being made. It’s like the big, red thermometer with dollars on the side during the charity drive. Progress. See?
So the Federal Reserve is sort of getting the idea that, along with its move to become the largest, most unwieldy spender of cash in the known universe, that it needs its own cable channel. FedTV or suchlike. Of course, it’s just starting with press conferences.
Officials at the U.S. Federal Reserve have discussed holding regular press briefings to help improve public understanding of unusual actions by the Fed in times of crisis, a Fed official said on Tuesday.
Press conferences have been weighed among other ideas, the official said. The Fed has sought during recent upheaval to explain its actions to a broader public, the official said, citing Chairman Ben Bernanke’s recent television interview and willingness to take questions from reporters after a speech.
We always happy to hear from The Beard, and certainly he’s less obscure than Greenspan (Greenspan TV might as well have been dubbed in Farsi) but we wonder if anything can “help improve public understanding of unusual actions by the Fed in times of crisis.” (Like that’s possible). Are we just being crotchety? Maybe “Real Life: I Work At The Fed” or perhaps “Real World: D.C.” is the next big thing? We are just waiting for the scene where Tim and The Beard see the house in D.C. for the first time. Who will turn out to be the alcoholic in the house? Who will admit they are gay in the first 48 hours? Who is the house slut? Tell us, do!
Fed weighs news conferences in tranparency push [Reuters]
“Hey, Ben. Get to the spending, already. Let’s go! That balance sheet is shrinking. Do you think we are paying you to shrink the balance sheet? No sir-ee, Bob. Expansion. Expansion. Ex-pan-sion. Aggressive… aggressive… let’s be aggressive. Right? Get it?
Let me put it in terms you can understand. If the Fed’s balance sheet doesn’t hold one third of all corporate debt by this time Monday, you’re fired. [Aside] What? How? Four years? Oh. [To Speakerphone] I mean, you won’t be looked upon favorably for reappointment in 2010. You get the idea. [Aside] He get’s the idea.”
Chairman Ben S. Bernanke and Federal Reserve policy makers may have to ramp up their purchases of mortgage securities and other assets after the economy and job market deteriorated further since they last met.
The Federal Open Market Committee, gathering today and tomorrow in Washington, needs to redouble its efforts after the central bank’s balance sheet shrank 17 percent from a $2.3 trillion December peak, Fed watchers said. The retreat came even as Bernanke acknowledged the chance that the unemployment rate will exceed 10 percent for the first time in a quarter century.
Bernanke May Need to Ramp Up Fed’s Asset Purchases [Bloomberg]
Yep. He’s back. As usual, we listen so you don’t have to.
There he is! There he is! Oh no, now his wife bleached his tie accidentally.
Wyden: Well, the Chairman was otherwise occupied (fly fishing), so I’m going to grandstand for a little while. Look, we want some damn good news, so get to it. CNBC’s ratings suck. How do you like that? Let me quote a little Buffett (I’ll avoid the reference to VD). You need to get more people borrowing. We need more debt. Get to it!
Gregg: So is the debt going to just screw us or what?
Beard: I know, let’s talk about the new cool
BARFTARF program that we invented the other day. After that, my long, mind numbing recitation of figures like non-core inflation and durable goods orders will defeat your weak Grandstand-Fu! Since I am reading my prepared statement, none of your questions will be answered. Hah!
Gregg: How long are we going to be breastfeeding AIG?
Beard: The situation is fluid.
Gregg: Why can’t you tell us who AIG is pouring money to? Who are the counterparties? I want names. We are here for the names.
[crackle] *whisper* “Yes, sir. Yes, sir, I’m right behind him. Yes, it’s loaded. Yes, sir. No names. I understand. Yes, sir.”
Beard: Hey, these people didn’t do anything illegal. So shut it.
[crackle] *whisper* “No, sir. All clear. He held up.”
Gregg: The Fed better come clean. We don’t take crazy risks like AIG up in Oregon, let me tell you.
Graham: How much can we actually borrow?
Beard: Well, 100% of GDP is a bit unhealthy. Let’s not do that.
Graham: What’s a zombie look like, Mr. Chairman?
Beard: Decaying. Missing eyeball. Smells of rot. You know.
Graham: So, is AIG a zombie?
Graham: If AIG is not a zombie, what is?
Beard: I don’t know…?
Sanders: Hey, who’d ya lend the $2.2 trillion to? Will you tell us?
Sanders: Do you have to be a big, greedy reckless financial institution to borrow that money?
10:03: Congresscritters wander into the hearing room.
Frank: There is no option other to work with the existing system. Sure, we have to bail out the bankers that you hate, but this is the first important step in totally revamping the financial system in the way we think it should be reconstructed. So just relax, jumpy public you. Relax. There will be plenty of time for hangings (easy there Waxman, we haven’t forgotten your dreams) once we [put out the fire/let the flood waters recede/quell the masses]. Really, what I’m trying to say is that without universal healthcare we just have no way to fix anything. Right? Right, ‘kay-thanks-bye.
Paul: I’ve been telling you idiots that this system has been doomed to failure for decades. Inflating this bubble again is a total misunderstanding. Hey, did you notice I shined up my congressional pin this morning? I was sort of expecting the cameras today, you know.
CNBC: Ok, we were here to watch the Beard, not you idiots. BREAKTIME.
(We should have just stuck with CSPAN).
Beard: Let me read from a dense stack of old economic texts with current events woven in to convince you that they are relevant to our activities over the last several weeks.
Dealbreaker Commenter: The guy over Bernanke’s right shoulder has an incredible amount of red hair.
Editor: That’s John Thain in disguise.
Barrett: How about judicial cramdowns? Huh?
Beard: Yeah, I’m going to just dodge that question, thanks.
Kanjorski: Hey, so the rumor is going around that we weren’t on the verge of disaster, and I’m sort of fearful that this will be used to argue that we are a bunch of idiots likely to do more harm than good. So, can you reassure us that we were totally fucked?
Beard: Yes… well…
Frank: You! With the pager! I’m going to stick this gavel where it doesn’t shine if you don’t turn that thing off.
Beard: Yeah, we were fucked. Seriously.
Paul: Seriously, what has to happen for you to think that stimulus might be a worthless joke or even a dangerous mistake?
Beard: Well, if inflation goes crazy, I’ll know I was wrong.
Paul: So if I were to ask you…
Frank: Nope! Time to vote! Everyone head for the playground! Not you, John Thain in disguise. You sit right there.
Frank: Sit your asses back down and let’s go.
Maloney: Hey, Obama got a lot of applause when he said the bank bailout was not about helping banks but about helping people. So, what do you think? Oh, and I have some homework for you to complete.
Big Ben, Live:
Ben: Sorry I’m late. Was helping Geithner with some math problems, and as you can see, my wife’s cat puked on my tie.
Dodd: Here is how this hearing works. I grandstand for a few minutes, then I will tell you how fucked we are and exactly who was responsible. I will use words that suggest disease, maybe “cancer” here. Then you will explain how I am exactly right and how fucked we are (I expect you to use hand gestures here. You will remember that I love pointing at things.) Oh, my tie is dipped in the blood of republicans, you might notice.
Shelby: I’m glad you are here in your capacity as Chairman of the Fed so I can tell you about the Fed’s balance sheet. Oh, and my colorblind manservant picks out my ties.
The Beard: You bitches forgot about the breaking of the buck in a large money market fund and the commercial paper clog in your little pre-prepared history that your congressional aide copy-pasted from Wikipedia two hours ago , didn’t you? Of course you did. You are not the Chairman. I am the Chairman, damnit!
Bullshit in 4… 3… 2… “The Federal Reserve is committed to keeping Congress and the American Public informed on these matters…”
Now I will drone you into complacency to lull you into a semi-comatose state and keep CNBC on its toes wonder if they should cut out to an 8-way split screen.
Dodd: Woah. You almost got me there. So, am I to understand from a few obscure passages in your written testimony that you think there might be just a little bit of hope somewhere? I mean, I have to tell the American People something good here. They are going to storm the Capital with torches. Who is going to lead us out of this recession?
Beard: Hey, is that Elvis over there?
Shelby: [super long statement disguised as a question]
Beard: That’s a very long question, Senator Shelby.
Bunning: Hey, joker, when are you going to show us your balance sheet and when are you going to tell us who you lent to so we can jump their shit?
Beard: Hundreds of years of central banking experience tells us that we really shouldn’t be sharing loan data when it comes to short term collateralize liquidity.
Schumer: We should be regulating hedge funds, right?
Beard: Yeah, it was the larger firms that caused the issues here, not the small ones.
Schumer: That doesn’t answer my question. I ask you about small firms, leveraged firms, you answer with large firms.
Beard: Yep. I know.
(CNBC points out that bank stocks are rallying- relating this to The Beard’s “moral hazard is just the nature of the beast” comments).
Martinez: Ok, ok, how are we going to
reinflate the housing bubblerescue the housing market?
It almost feels like Greenspan is back.
“Although conventional interest rate policy is constrained by the fact that nominal interest rates cannot fall below zero, the second arrow in the Federal Reserve’s quiver — the provision of liquidity — remains effective,” Mr. Bernanke said.
Bernanke: More Rate Cuts ‘Certainly Feasible’ [The Wall Street Journal]
“I feel like Butch Cassidy and the Sundance Kid. Who are these guys that just keep coming?” — Treasury Secretary Henry Paulson Jr.
We quite like the image of Beard and Bald as the “Banditos Americanos” of Butch Cassidy and the Sundance Kid fame. Racing around on horseback, blowing up safes, being pursued by doggedly determined bounty hunters. Making that huge leap off the cliff to finally shake their tormentors. Fleeing south of the border. Taunting the local army.
I suppose the big question is, which one is Robert Redford and which one is Paul Newman?
Oh, wait, we just remembered how that film ended. Maybe that’s not such a good comparison.
Struggling to Keep Up as the Crisis Raced On [The New York Times]
A bit obnoxious as a headline for the Wall Street Journal (and of us for telegraphing it), no? Really, the entire piece makes this entry more about the continuing slide in Wall Street Journal quality than any political statement or position. (Actually, we find it quite amusing what some of the readers here think our politics are, though).
It should go without saying that the Journal is being beyond manipulative here. It is a statement that we are simply annoyed rather than outraged. Nothing the Journal does anymore seems to surprise us.
Perhaps Mr. Bernanke’s blunderbuss political intrusion will win him more Democrat friends, and maybe even Mr. Obama’s goodwill. To the rest of the world, he has harmed the Fed and made himself less credible.
Bernanke Endorses Obama [WSJ]
You are certain that the credit crisis is cutting into normal life when you tune to CNBC and see Rosa DeLauro (D-CT) ranting from the podium of the House Committee on the Budget. You know that things are way off kilter because there simply must be a very severe shortage of lithium and chlorpromazine in the Northeast.
I mean it, what is wrong with this woman? It’s Dennis Hopper level mania.
One through nine, no maybes, no supposes, no fractions. You can’t travel in space, you can’t go out into space, you know, without, like, you know, uh, with fractions – what are you going to land on – one-quarter, three-eighths? What are you going to do when you go from here to Venus or something? That’s dialectic physics.
UPDATE: CNBC has several video clips up of the hearing, but none at all featuring our favorite, lithium deprived servant of the people. It’s like someone just George Orwelled her entire psychotic rant into oblivion.
Lecturing Congress like a Monday morning professor, again. Ugh. I think I am detecting a pattern here. A droning, dense lecture that bores the markets into a placid, dumb calm. I used to think him annoying lacking in initiative. I mean, he’s telling them what TARP is again, and what it will do. But, considering it, there are probably 4 or 5 members of the Committee that will ask 15 questions about the TARP plan now, which they have already passed. Clever, clever. I see what you did there, Beard.
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Paulson and The Beard are facing the panel. What glee!
11:30: Lots of hammering away on the issue of mortgage foreclosure assistance. If the issue was bad lending, the argument goes, why aren’t we doing more for foreclosure assistance?
What other plans did the Treasury consider before adopting the plan that is before the congressmen and congresswomen now? (This should be good).
Paulson: Oh, the market, baby, the market is the answer. Except when it isn’t. When you “have to buy mortgages or securities way above fair value” (emphasis mine).
Bernanke: “As you know I am a student of financial crisis and financial history.” Indeed!
The situation we have now is unique and new. It’s not about failing institutions. Our amazing financial innovation is so amazingly complex, we can’t handle it like those simpletons, the Japanese.
Q. What banks would be eligible to participate?
All of them. (Ahem).
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