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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: SilentZ who wrote (543367)	1/12/2010 8:18:33 PM
From: tejek	Read Replies (1) \| Respond to of 1574711

How so? prospect.org >"Not at the WSJ, nor it seems anywhere else. Yesterday, Federal Reserve Board Chairman Ben Bernanke referred to the "our dual mandate, which is growth and inflation." In fact, the dual mandate is full employment (defined as 4.0 percent unemployment) and price stability. Presumably Bernanke had unemployment in mind when he said "growth," but it striking that he would not use the right term. The two are of course not synonymous." Job growth has become more and more a lagging indicator when it comes to economic recoveries. In the last three recoveries, jobs appeared well after the economy starting growing again. Its due to the heightened productivity per employee and the use of computers.....we have just-in-time inventory and now we have just-in-time employment. In December, 2009, layoffs slowed to the lowest pace in a year and temp jobs increased significantly. Its just a matter of time before job growth resumes. I am expecting to see positive job growth by March. I think you are being just a wee harsh. We all have biases and POVs. In a disaster that's not really the major concern. The guy got us through one of the worst economic crisis since WW II. As with most humans, he ain't perfect. The truth is there is no such thing as Superman. But he also helped put us in it! It was a signficant part of his job to see it coming, and he didn't. Z, very few people saw this coming. It was too far under the radar. When the bank regulation law was repealed in 1998, it opened up a pandora's box. Suddenly, banking regulations that had been established by FDR after the last big economic debacle no longer applied. There were still banking regulators but under Bush, they did very little regulating. So two things happened. First lending standards were compromised significantly but in ways that were not real obvious. Not long after the housing boom started, lenders found that offers were coming in too high given the value of the home so they began fudging their appraisals to make the deal. No one really noticed and if someone was looking, house prices were appreciating so quickly that by the time someone checked, the home was no longer overvalued. As banks realized they could get away with this sh*t, more and more loans were based on appraisals that over valued the property that was to provide security for the loan. Then as the boom got long in the tooth, less and less people were qualifying for a loan. So the banks began to tweak their mortgage instruments in ways that would allow more people to be eligible for a mortgage. People who were credit risks were now qualifying for a housing loan. Now I was in real estate in the late 90s. The very idea that the big lenders would pull such crap was unheard of. Small, marginal lenders might pull such crap but not the big guys. In fact, banks were pains in the asses.......they were always pulling a deal because the house didn't appraise or the people didn't qualify. Suddenly, under Bush, the cops became the bad guys. Who knew? And then there were the financial derivatives that were created to package these bad loans so no one would know they existed. As a matter of course, banks have to sell most of the loans they make to what are called secondary lenders so they can raise money and continue to make more new loans. Now the banks knew that some of their loans were pure crap so they came up with ways to bury the crappy loans in with good ones. Actually, it was the packagers like hedge funds who did the dirty work of packaging. Apparently, they were so clever in their packaging to this day the recipients of these derivatives can't figure out where the good loans end and the bad loans begin. Bottomline: very few knew that there was so much scamming going on until the defaults started en masse. I was in the business, and frankly, I was shocked at the stunts that had been pulled. It was the equivalent of finding out Santa Claus is a pedophile. I doubt Bernanke or anyone that high up would have known. Who was there to tell them? The bank regulators weren't doin their job. Eventually Cramer figured it out and started screaming at the top of his lungs but he was so hysterical and his suggestions so outrageous, that people thought he might be having a mid life crisis and figured he was crying wolf when there was no wolf. So to blame Bernanke for not being clever enough to see it coming I think is a bit unfair.