October 05, 2007

HousingPANIC calls for Ben Bernanke to take back his misguided 1/2 point rate cut immediately. Failing that HP calls for his resignation.

Helicopter Ben panicked a couple of weeks ago (or kissed the ring of his REIC and banking masters) and destroyed the US dollar, using the Jobs Report which showed a 4,000 job loss for the month as cover.


Well, that jobs report for August just got revised to an INCREASE of 89,000 jobs. With an additional 110,000 jobs supposedly added to the payrolls last month.

Meanwhile, inflation is now roaring, gold and commodities are at or near all-time highs, oil is at an all-time high, the dollar is at an all-time low, the Dow is at an all-time high, and consumer confidence is increasing.

In other words - it's time to RAISE RATES, dramatically if necessary, not time to be LOWERING THE DAMN RATE.

If they were doing their job of maintaining a stable currency and avoiding inflation, they'd take the 1/2 point cut back IMMEDIATELY, and raise 1/4. But if they're out to screw America (except for the rich), watch the corrupt bastards cut again.

I think we all know which way Helicopter Ben is leaning.

Therefore, because of his incompetence and/or corruption, because he won't admit his error and take back his 1/2 point cut, because his actions have led to the further destruction of the US dollar, because he cut based on a report he knew was faulty, and because he cut when inflation was raging and the markets were near all-time highs, HousingPANIC calls for his immediate resignation.

Failing that HP calls for Congress to open an investigation into his actions, leading to his possible dismissal.

The 1/2 point rate cut of two weeks ago will go down as the most shameful day in US Federal Reserve Banking history. And let's see if they compound the error at the end of this month.

41 comments:

Anonymous said...

One of the funniest posts ever about Countrywide's Orango Mozilo

http://wcvarones.blogspot.com/2007/10/blog-post.html

Veronica Lodge said...

RE: HousingPANIC calls for Ben Bernanke to take back his misguided 1/2 point rate cut...

Yeah, he'll take it back all right -- by cutting the rate another 1/2 point.

V.L.

Anonymous said...

I hear he goes "commando" under that uniform.

bryce in canada (Vncvr&Clgry bubbls) said...

Strong jobs data came out in Canada this morning. Accordingly, US$ lost another 1.5 cents versus CAD$ this morning (that's a mindboggling 10 cents in two months).

Canada should be increasing its interest rate, too. Unfortunately only so much of a gap between the CAD$ rate and the US$ rate is possible.

So if Helicopter Ben doesn't increase the US$ rate it significantly limits how much the CAD$ rate can be increased.

We wish the USA would stop sneezing all over us and our ridiculous petro-currency; we're getting a tickle in the back of our throat.

But, well, "if wishes were horses then beggars would ride."

Anonymous said...

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The fed won't take back the rate cut, at least not at the next meeting. They may wait another month, though, and then 'discover' a bunch of 'new inflationary pressures'.

What a joke.

But this begs the question Keith, where's my housing-and-finance-led recession?

Anonymous said...

real funny. bernanke is doing as he was told by his masters. the next fed chief will do the same

Rental Car Madness said...

Keith,

I know a lot of people have been asking how they get their money back after a bank fails. Maybe this will help. It's from the feds website.

http://tinyurl.com/37xcya

Veronica Lodge said...

RE: Big Ben's rate cuts...

If the Fed cuts rates any more, Dollar Dumping might become a popular trend worlwide.

V.L.

Roccman said...

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News Flash!!!

The plan is to destroy the world economy.

Rates will be cut to zero.

Have a nice day.

Anonymous said...

Failing that HP calls for Congress to open an investigation into his actions, leading to his possible dismissal.

_______

Ha ha ha ha!!!

Don't be so naive, Keith. Bernanke simply caved to the enormous pressures from Wall Streeters.

Congress?????? They're not gonna do anything about this! Our economy has fallen apart on their watch. THEY are the ones who keep raising the debt limit, and keep spending spending spending, or who enable the executive branch to do so. What in the world would motivate them to grow brains and spines NOW????

bought_high said...

Crap - guess ben is gone. No way he can avoid the resignation call from someone in London. I mean seriously, if you cannot keep some ex-pat in london happy, then it is time to resign.

The fed is a game and Ben's resignation would have no meaning. He has a boss too - he is limited in his decisions. Reality - smell it, live it, and try to make money off of it friend...

ApleAnee said...

How did we go from being 4,000 jobs down in August to 89,000 up according to a new revision? This can't be incompetence. This is purposeful. Is this so Bernanke can deny the next rate cut? Or perhaps, they gave the media the 4,000 jobs down number for media release to justify the last rate cut? The only mention about where they found these 89,000 new jobs for August finally in October is a sarcastic little piece at Reuters:

http://tinyurl.com/3xpxpc

There is no way we can have any faith in investments of any kind when the figures change like this on a whim.

PS: I have a B.S. in IT. Does that make me qualified to post with this distinguished group of scholars? I can spell too.

AA

kilgore said...

I actually think he will raise rates again unexpectedly in the next couple of months. I like to think that it was his plan all along to do so. Greeenspan was the Maestro and now Bernake is the Surgeon!

I'm also beginning to think that the dollar has gone beyond the tipping point and that there is nothing he can do anyway. If he started reporting the acutal inflation rate, the colas and the refinancing of short term gov't borrowing would be enormous. California, in particular, would never be able to service $20BN a year in new debt at 6% + the risk premium.

Congress obviously doesn't have any interest in balancing the budget because it would be too painful and they all like their jobs too much.

By the way, did you or anyone hear about Hillary's plan to give $5,000 to every baby born in America to be invested and given to them on their 18th birthday???? Seriously, I HATE the republicans, but every time I want to vote democrat on principle, something absurd like that comes out of their mouths and it makes me just want to curl up into a ball and cry.

Tanker said...

Keith:
I understand your sense of dismay at how the markets are reacting to the economic news of late. But I think you should be patient. October puts are too soon. What we are witnessing is a classic "Sucker's Rally" that will not last. If you notice from the jobs report most of the gains came from government and teaching. Going forward, let's see the third quarter earnings reports and more importantly Christmas season retail sales. I believe you will be proven correct in your assertion that we are headed for a rather severe recession. Don't fight the tape. Be patient. In the end the only thing that matters is earnings per share.

Anonymous said...

Bernanke (the banky) works for Wall Street and the banks! The banks are funding hedge funds and risky investments and they need a bail out! Bernanke got convinced that the banks would fail so he did what most bankers do and he is throwing more cash at the problem.

This only makes the stock market go up because this cash has to be invested somewhere by the banks.

Of course it will backfire because housing is already up-side down and good folks are walking away from the debt they were coerced into taking. It will fail because confidence in the banks and brokerages has been lost.

It will fail because investors are backing off on debt so long term interest rates will have to go up.

It will fail because eventually banks will have to start paying higher rates on deposits to attract more cash. If rates on savings go up then rates on loans will have to go up too.

You would hope Banky would know this kind of stuff but he's listening to too many wall streeters and not listening to his economics professors.

Anonymous said...

If,

And that is a big If. If Dopes turns out to be right after all and this housing crash is not as big as Keith predicts and the U.S. economy rides it out. Then it is safe to say that Keith might just be a bigger dope for screaming fire!

k.w. - southern ca. said...

We all know who the Fed's actions benefit, and there will most likely be further rate cuts.

This spells further disaster for the housing crisis, as well as our economy as a whole.

If anyone out there thinks this is "gloom-and-doom" talk, just wait until we approach the new year.

Gena said...

Hey, someone stole my words!!! If wishes were horses than beggars would ride...

Seriously, congratulations on being selected one of the Top 25 Most Influential Bloggers!!!

Quite a coo...

Anonymous said...

Agreed, but I would like to see the FED bump rates back up gradually w/ 2 1/4 points raises. They can play wait and see at the next meeting and just change their bias (I.e. project that they plan on raising rates) Then do it, that way the markets will not overreact in a negative way as they would if Ben made an immediate 1/2 pt jump w/o notice.

Anonymous said...

In the end the only thing that matters is earnings per share.

Actually, the only thing that matters is FREE CASH FLOW, but I agree that there's a sucker's rally going on, as well as a rampant data manipulation to make the market look rosy.

Anonymous said...

There are that many more payroll jobs, consumer confidence is in fact rising, wages rose the most year over year in a long time... oh, and today's remarks from he FDIC chair telling banks to make the subprime ARM teaser rates fixed is something I've been saying for months.

If people can make their payments before they adjust higher, why would the banks raise them just to foreclose and take a house they don't want? Less foreclosures than expected, and some other pretty decent fundamentals... aside from the dollar's weakness I think we're doing all right, and the dollar will eventually correct itself. It always does.

Anonymous said...

The Benicopter!

amigauser said...

Ha Ha

Keith been smelling the Gold again

Do you actually believe government statistics?

The Unemployment statistics can be manipulated to give whatever figure is desired, you just alter the number of imaginary jobs created by the Birth/Death model.

Ben Bernanke needs to keep cutting interest rates, this will drive down the value of the dollar and so enable American manufactures to begin recapturing export markets.


Sell your Golden relics and buy Boeing

Anonymous said...

YOur blog shows signs of a distressed speculators whose bet went wrong.

Grow up kid.

Don't speculate. Follow disciplined asset allocation and you will be OK.

Peter said...

At this point, Bernanke has no more balls then a fly. He is totally a slave to Bush, the rich, and Wall street.

Anonymous said...

"and consumer confidence is increasing."

This is incorrect. Most measures of consumer confidence demonstrate a steady deterioration of consumer confidence over the past months.

cobra2411 said...

Contact the FED here: http://www.federalreserve.gov/feedback.cfm

And my letter to them...

Mr. Bernanke, I call on you to act on the recent economic information that has come out. You said you were more worried about the condition of the economy then inflation when you cut rates last month. There was a report of 4k jobs lost which supports a recession. That number has since been revised upward.

In addition I believe the current assessment of inflation is flawed. I track my expenses and have found that over the last year my food costs have risen by almost 15%. I have not changed what I eat. It's the prices that have changed.

In the last month the dollar has been in what can only be described as a free fall. This makes everything we import cost more which IS INFLATIONARY.

In addition the bond markets on which mortgages and lending rates are based have been going UP not down after you cut rates.

It appears that the Bank Of England and the European Central Bank feel that the economy is doing fine and the problem is inflation as they saw fit to hold their rates.

You're cuts have not helped homeowners and they have not helped consumers and they have not lowered inflationary pressure. The ONLY people they have helped have been Wall Street Investors.

You were quoted as saying "It is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions." Yet that is EXACTLY what you did.

Rates need to be restored IMMEDIATELY before our economy and our currency suffer from irreversible damage.

I am posting this message on the Internet as proof that you were informed so later there can be no question who's at fault if you do not act. I will strive to see that you are held accountable for your actions.

keith said...

You slash rates and consumers get giddy, even if their home is plummeting in value and they're losing their jobs. Meanwhile, inflation will rage unless Bernanke fixes this grave error

http://tinyurl.com/3438rk

The RBC Cash Index showed a recovery in U.S. consumer confidence in September, from multi-year lows the previous month. The rise in confidence is attributable to the Fed's mid-month 50 bps rate cut, a recovery on Wall Street and stabilizing gas prices. The index rose to 80.6 from 71.1 in August. People's feelings on the current state of the economy also climbed, as did their willingness to undertake major purchases. The index began measuring consumer sentiment in 2002 and was set at 100 based on January's readings from that year. Says Wachovia's Mark Vitner, "As long as we don't have another blow up in the credit markets, we'll probably see confidence come back some more."

Anonymous said...

You all know that these upward revisions are like the increase in the chocolate ration to 100 grams from 150 grams a la "1984" right? All the published figures that are touted by the MSM have been massaged into meaningless tripe.

Anonymous said...

Ron Paul is a turkey.
And the dollar begins to climb next week.

HP is right on Housing, totally wrong on Greenback and RP
‘nuff said.

Anonymous said...

Ben your rate cuts just aren't cutting it!


2007-09-27 - Correspondent Home Equity Lending closure
Wells is done doing outside home equity business, effective September 28th, 2007. Here are the key parts of a notice forwarded to us from them on September 20th:

ATTENTION: Correspondent Clients Correspondent Home Equity Lending to be Discontinued

September 20, 2007

Wells Fargo regularly analyzes the market and makes changes that align with our prudent lending practices. We have determined that we cannot competitively offer home equity products through the correspondent channel with a level of profitability commensurate with the associated risks and our stringent portfolio return requirements given reduced liquidity in today's capital markets. Consequently, we have decided to discontinue offering our home equity products through the correspondent channel.

Wells Fargo Funding remains committed to serving your business needs by offering a variety of first mortgage products. Additionally, we are exploring other referral options to help minimize the impact of this change. Timing of the Change Effective on Friday, September 28, 2007 at 5 p.m. Central Time, we will no longer accept new home equity registrations through Wells Fargo Funding, our Correspondent channel. All loans must fund as committed by 5 p.m. CT on Friday, Nov. 30, 2007. We value our relationship with you and appreciate being the investor of choice for your first mortgage needs. Please contact a member of your regional sales team with any questions you may have.

No concrete word on the staff impact of this change as of yet.

Anonymous said...

Helicopter Ben you gave us all a pay cut! If I had one of your action figures I'd do worse things to it than I did to my gi-joe when I was a kid.

Anonymous said...

Like peter schiff said, the wall street suckers rally doesn't matter. people are watching their accounts meagerly grow, while they don't even realize the dollar is losing value at a far faster rate. Who cares if your us brokerage account goes up. unless it has gold, commodities or oil in the mix you are fighting a losing battle against the dollar. People are so dumb- it absolutely blows my mind.

mike tyson said...

I heard uncle ben likes to wear thongs and have killer keg parties. Welcome to your new hell mr ben, bush's scapegoat.When all is said and done mr ben will be the one who killed the economy, not bush.

I say drop it to zero and get the housing bubble going again. Just keep inflateing asset prices financed though china and all will be fine.They can make our stuff and we will live off of inflated stocks and homes.Why do we need to work anymore? It is time somebody thanked us for saveing the world from the soviets and germans.

LauraVella said...

It hope it doesnt happen but....I read somewhere (on the net) the FEDS will actually lower the rate again by 1%.

However, I believe we wont see an increase in rates till at least next Sept....

me in OC said...

When Ben talks about controlling inflation, he is talking about domestic prices. He is not talking about the price of oil or the worth of the Dollar overseas. Just us Americans buying American made items. Through his eyes, inflation is much more tranquil.
I saw Ben say he would not let inflation (his kind of domestic inflation) get out of control. He smirked when he said it. He was lying. IMnot-soHO.

Tanker said...

Re: Actually, the only thing that matters is FREE CASH FLOW, but I agree that there's a sucker's rally going on, as well as a rampant data manipulation to make the market look rosy.

No, you are incorrect. Free cash flow was an argument for the telecom cheerleaders during the stock market bubble as justification for ridiculaous valuations. A stock's value is a multiple of EARNINGS PER SHARE. NET ICOME. That multople is based on how fast those EARNINGS PER SHARE are growing. The bottom line is the bottom line.

Shakster said...

ApleAnee said...
How did we go from being 4,000 jobs down in August to 89,000 up according to a new revision? This can't be incompetence. This is purposeful. Is this so Bernanke can deny the next rate cut? Or perhaps, they gave the media the 4,000 jobs down number for media release to justify the last rate cut? The only mention about where they found these 89,000 new jobs for August finally in October is a sarcastic little piece at Reuters:

http://tinyurl.com/3xpxpc

There is no way we can have any faith in investments of any kind when the figures change like this on a whim.

PS: I have a B.S. in IT. Does that make me qualified to post with this distinguished group of scholars? I can spell too.

AA

----------------------------------
Post more often,that's good stuff.
I have much Popcorn too.

Anonymous said...

So by Bernanke cutting interest rates, he is effectivly shitfing the pain evenly to everyone, right? So the moron investment banks who made the bad loans lose less and we all responsible folk with small dollars now have even less? Is that how it works? So, bad loans were made..the market responds intelligently with a credit freeze, Bernanke lowers rates to what? prompt more bad loans on cheap credit and what? how does it fix anything?

Anonymous said...

Keith,

How is Ben not punishing the rich? Because they have a net worth, I might add this is typically measured in US Dollars and is now worth less with every passing day when compared to citizens in other countries.

Big Cheese

Anonymous said...

Big Cheese,
I think that we are all 'punished', but that's the point - why am I punished for the foolhardy behavior of others? The risk takers should pay the price by dealing with the consequences of their actions. A lower interest rate devalues the dollar (punishes sensible savers and risk taking morons alike). A lower interest rate is good for people who earn money from lending (guess who)...Who loses, who wins?