Secret Banking Cabal Emerges From AIG Shadows

(Bloomberg) -- The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

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Comment: Actual Bloomberg headline!

One day after supposedly bashing the banks, the Obama-led Democrats re-nominate top banker

WASHINGTON (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke was confirmed for a second term Thursday by the U.S. Senate. The final confirmation vote was 70-30.

The vote, which occurred just three days before Bernanke's first term was scheduled to end, came after heavy lobbying by Democratic leaders and the Obama administration. President Obama, himself, made calls last weekend. And Senate Majority Leader Harry Reid, D-Nev., lobbied Republicans to make sure he had enough votes.

Despite the strong showing, Bernanke won his confirmation by one of the smallest margins of all time for a Fed chairman. Often the confirmation of a Fed chairman is so overwhelming and uncontroversial, it's done by a voice vote.

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Cold Senate reception for Ben Bernanke

The Massachusetts election storm is sending a few cold waves over the bow of the White House economic team — not to mention Federal Reserve Chairman Ben Bernanke.

In a matter of hours Thursday, 13 Democrats broke ranks with the Treasury over extending its financial bailout authority, and after a face-to-face meeting. Majority Leader Harry Reid was conspicuously silent on whether he would back Bernanke for a second term next week.

Treasury’s program survived the floor vote; Bernanke is still favored to win confirmation. But there’s a greater chill in the air, and with Bernanke’s term running out Jan. 31, the administration has yet to secure the 60 votes needed to cut off debate on his nomination.

Democrats had hoped to pin that down this week, with the chance of holding the final vote Friday. But then Republicans rode an anti-Washington wave in Massachusetts on Tuesday, and at a Democratic caucus the next day, senators vented their anger over a White House team seen as too close to banks and Wall Street.

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Is The U.S. Economy Being Tanked By Mistake or By Intent?

The government wants Americans to believe the greatest economic collapse in history was the result of ineptness and mistakes yet still have confidence in their financial institutions.

Should American bankers be let off the hook because they self-declare, before an investigational panel, that the failure of their newly invented risk swaps and other highly leveraged investment schemes was simply due to "mistakes"? Not malfeasance – just every-day mistakes? Bankers just fell asleep at the helm at a critical juncture in American history. Is that what we are being led to believe?

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Deadline Fast Approaching to Confirming Bernanke's Second Term

While the Senate Banking Committee voted to back Ben Bernanke’s second term as Federal Reserve chairman in December, the Senate as a whole must vote on this issue before January 31, and some believe this looming deadline won’t be met.

If the Senate fails to meet the deadline, Bernake will need to temporarily step down as chairman, and Donald Kohn, the vice chairman, will likely serve as acting chairman. Some, however, are pushing for a temporary extension.

Causing the delay are Senators Jim DeMint and Bernie Sanders, both of who have placed holds on the vote. Senator Chris Dodd has urged that the Senate not delay on the confirmation process.

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Comment: Not that it matters who runs the Fed anyway; whether its Bernanke or someone else, the Fed will continue to expand the monetary base and distort the economy.

Federal Reserve Seeks to Protect U.S. Bailout Secrets

Jan. 11 (Bloomberg) -- The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history.

The U.S. Court of Appeals in Manhattan will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News.

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Geithner’s New York Fed Told AIG to Limit Swaps Disclosure

Jan. 7 (Bloomberg) -- The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

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EconomicPolicyJournal.com: Does the Fed Want to Crash the Housing Market a Second Time?

EconomicPolicyJournal.com: Does the Fed Want to Crash the Housing Market a Second Time?

There is a curious rule change that was made at government controlled Fannie Mae. And it was announced on one of the top news dump days of the year, December 24, Christmas eve, when you were away visiting relatives.

Keynes and Bernanke on Bubbles and Manias: Blame the Free Market

By Gary North

In 1936, John Maynard Keynes' book appeared: The General Theory of Employment, Interest, and Money. It changed the world. It justified in the name of economic theory what governments had been doing since 1932: running deficits and creating fiat money. Keynes' ideas took over. Today, they are dominant. The 30-year break, 1978-2008 -- Chicago School, rational expectations, efficient market theory -- is over. Academic economists, like Dorothy in Kansas, ran for the Keynesian storm cellar. Unlike Dorothy, they made it. No trip to Oz for them!

In chapter 12, he contrasts enterprise with speculation. This is conceptually incorrect. Both rely on accurate forecasting. Both rely on transferring assets to a specific market position. He made speculators sound like gamblers. They aren't. The emotions may be the same, but the economics are different.

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Comment: Great article showing some of the many ways Keynes was ignorant of basic economic theory YET many of our State sponsored academics parrot those nutty theories and even base policy on them! Keynesianism is creed of the economic priest class - it's the economic "theory" that most justifies the Corporate State.

Bernanke faces mounting criticism after speech

There is mounting criticism of Federal Reserve Chairman Ben Bernanke's claim that low interest rates didn't cause the recent housing bubble.

During a speech to the American Economic Association's annual meeting in Atlanta Sunday, Bernanke called linkages between the Fed's monetary policy and the housing boom “weak.” But economists, newspaper editorial boards and some 2010 candidates are questioning the Fed chairman's reasoning.

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Comment: Bankman Bernanke who totally missed the oncoming collapse is now telling us that low interest rates didn't have a role in it. I'm glad he has the credibility to make such a claim...