Wednesday, July 28, 2010

This Month In Economic History

Before July is over...


"Adequately capitalized” and “in no danger of failing.”

-Ben Bernanke on Fannie Mae and Freddie Mac, July 16, 2008, less than two months before they were placed into conservatorship.


"This is far and away the strongest global economy I've seen in my business lifetime."

-Hank Paulson, July 12, 2007


"It's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation."

-Hank Paulson, July 20, 2008

4 Comments:

Anonymous Anonymous said...

"Adequately capitalized” and “in no danger of failing.”

-Ben Bernanke on Fannie Mae and Freddie Mac, July 16, 2008, less than two months before they were placed into conservatorship.

I was at the hearing when Ben and Hank testified to this. Both stocks were down 50% at the open while they were affirming "strength" in the capital markets. Knowing the vast majority of the financial community, congress and taxpayers think these gentlemen prevented a depression and systemic failure is about as scary as it can get in contemplating our future. What hope indeed is there for a nation that cannot even comprehend and come to grips with a basic truth understood by even our most intellectually challenged professional athletes "it is what it is".

7/28/2010 6:12 PM  
Anonymous Anonymous said...

Public confidence--or lack thereof--plays a huge role in whether or not the economy completely collapses. Because the vast majority of the public is completely clueless, the fact that the major players--Bernanke, Paulson, etc.--talked the public out of panicking did prevent the run on banks (as during the Great Depression) that would have plummeted us much greater depths.

That said, they are all completely full of shit and seem to only be concerned with saving Wall Street's ass. If the public DID have a clue, they'd be down on Wall Street with pliers and blow torches. But then the same could be said about the guys running the Federal government--who are all corporatist schmucks, regardless of party.

7/29/2010 6:58 AM  
Anonymous Thomas Daulton said...

Public confidence--or lack thereof--plays a huge role in whether or not the economy completely collapses.

This Modern World had a great comic about that back in 1997 after a brief market crash which seemed to be reversed through nothing more than consumer optimism... (although retrospectively, one can't help but wonder if the PPT was involved)...

You see, the strength of our delusions determines the extent of our profits!
You might say, we're insanely optimistic...!

7/29/2010 6:30 PM  
Anonymous Anonymous said...

This reminds me of the Monty Python sketch is which a magician creates an high rise with magic. The only requirement is that all the inhabitants have to believe that it is stable and secure for it not to fall down.

The difference here is that someone who thinks they can make a buck by its collapse will try to destroy that belief.

8/09/2010 5:05 PM  

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