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Bernanke: I Was Wrong About Subprime Crisis
Newsmax.com ^ | 11/232008

Posted on 11/23/2008 3:32:59 PM PST by BuckeyeTexan

WASHINGTON — Federal Reserve Chairman Ben Bernanke acknowledges he was wrong in believing that there would be limited fallout to financial markets from risky mortgages that soured after the housing market's collapse.

"I and others were mistaken early on in saying that the subprime crisis would be contained," Bernanke said in an article in the Dec. 1 issue of The New Yorker magazine.

"The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict," he said in the piece titled "Anatomy of a Meltdown."

Subprime mortgages made to people with tarnished credit or low incomes were especially hard hit once the housing boom went bust. Foreclosures spiked and financial companies wracked up huge losses as these investments turned bad.

...

(Excerpt) Read more at newsmax.com ...


TOPICS: Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS: 110th; bailout; bernanke; fed; financialmeltdown; housingcrisis; mortgage; subprime; subprimemortgages
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1 posted on 11/23/2008 3:33:00 PM PST by BuckeyeTexan
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To: All

Cramer: “HE HAS NO IDEA”.

Bernanke: “I HAVE NO IDEA” (14 months later).


2 posted on 11/23/2008 3:34:13 PM PST by CaliGangsta
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To: BuckeyeTexan

No problem. Just give the two TRILLION dollars back and we’ll call it “okay”. :D


3 posted on 11/23/2008 3:34:25 PM PST by Tzimisce (http://groups.myspace.com/nailthemessiah)
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To: BuckeyeTexan

This doesn’t seem like rocket science. My husband and I have been talking about the potential problems with this stuff for several years.


4 posted on 11/23/2008 3:37:50 PM PST by brytlea (You can fool enough of the people enough of the time.)
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To: BuckeyeTexan

He’s wrong on so many counts it’s frightening.

He was wrong to think the subprime problem could be contained. He’s wrong to believe (if it’s what he really believes) that the subprime problem was a cause for what we’re experienceing (as opposed to just a symptom of a more serious underlying condition). He’s wrong on what can be solved and how to solve it.

He’s one of the most expert students of what went wrong during the Great Depression, so he won’t make the same mistakes they did in the 20’s & 30’s. He wants to make his own creative mistakes.


5 posted on 11/23/2008 3:39:06 PM PST by sanchmo
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To: CaliGangsta

First of all Cramer had no idea either.

When the first subprime guy went down in feb 07, he went prattling on for 5 months about subprime being contained and it was only going to be 200 billion.

2nd, what we are facing is not just subprime but the big 3 blowing up, china’s growth cooling, europe blowing up, hedge funds overspeculation, fraud at some banks, incompetence at other.

So Bernanke may have been right about subprime. He just did not see all the other blowups coming.


6 posted on 11/23/2008 3:39:59 PM PST by staytrue (YES WE CAN, (everyone should get in the practice of saying it, it will soon be manditory))
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To: BuckeyeTexan
"The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict,"

Surely the best argument in favor of free markets ever delivered with completely clueless irony. No one is smart enough to unravel these relationships, which is why you do not implicitly or explicitly turn over hundreds of billions of dollars to a single man or to a government committee to "fix things."

7 posted on 11/23/2008 3:40:31 PM PST by FredZarguna (Archimedes, Newton, Leibniz, James and John Bernoulli, Euler, Gauss, Riemann, Hermite, Laplace...)
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To: BuckeyeTexan
When housing values started falling and foreclosures started piling up then the credit derivatives based on mortgages suddenly became either worthless, or at least worth far less then their paper value, with the values being impossible to determine. They are unsalable. That's the real problem, as far as the markets are concerned, and that's what Bernanke failed to predict.

For the record, I didn't predict it either. Sorry about that.

8 posted on 11/23/2008 3:40:38 PM PST by Batrachian
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To: BuckeyeTexan
The article is called Anatomy of a Meltdown and the money quote is, "The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict"?

Thanks, Ben. What the hell do we pay you for? But then again, Greenspan didn't get it either.

And these were the "whiz kids". What, were they just guessin'?

9 posted on 11/23/2008 3:40:43 PM PST by ItsForTheChildren
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To: BuckeyeTexan

When a person make a “mistake” as huge as this, isn’t he supposed to resign?


10 posted on 11/23/2008 3:40:53 PM PST by Shannon
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To: BuckeyeTexan
"The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict," he said in the piece titled "Anatomy of a Meltdown."

Bernanke, the best and brightest Washington has to offer..../s

Perhaps he should....errrr.....read what real economists have said for the past 3 years or so...

11 posted on 11/23/2008 3:41:43 PM PST by ScreamingFist (Annihilation - The result of underestimating your enemies. NRA)
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To: BuckeyeTexan

And still this man’s job is secure.


12 posted on 11/23/2008 3:41:51 PM PST by eclecticEel (In short, I want Obama given the same respect and deference that Democrats have given George Bush)
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To: BuckeyeTexan

And oh by the way....my “mistake” helped Barrack Hussein Obama to get elected...what a coincidence...I became stupid to create a panic so a totally inexperienced Muslim Marxist could be elected president of the united states...so much for my higher education...I’m sorry....will you forgive me? I’m blushing from the shame...


13 posted on 11/23/2008 3:42:16 PM PST by Chuck N
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To: BuckeyeTexan

The password is “Jerkoff”


14 posted on 11/23/2008 3:42:44 PM PST by theJoker
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To: sanchmo

“Experts” always draw high salaries, wear nice suits, act smarmy and superior and then when it all blows up they just say, “How was I supposed to know?” And people fall for it over and over again. Like they say - the most important factor in the success of a “raindance” is timing.


15 posted on 11/23/2008 3:43:25 PM PST by Emmett McCarthy
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To: Travis McGee

In case you wanted to add something to your list of attributed quotations.


16 posted on 11/23/2008 3:43:35 PM PST by coloradan (The US has become a banana republic, except without the bananas - or the republic.)
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To: BuckeyeTexan

Harvard University graduate ... I see a pattern. Havard = losers.


17 posted on 11/23/2008 3:46:34 PM PST by VRWC For Truth (Throw the bums out who vote yes on the bail out)
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To: coloradan

No doubt!


18 posted on 11/23/2008 3:46:55 PM PST by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
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To: BuckeyeTexan

this is the guy who wrote his ph.d. thesis and specialized in the depression.


19 posted on 11/23/2008 3:48:31 PM PST by ken21 (people die and you never hear from them again.)
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To: BuckeyeTexan

When all hell started breaking loose about this stuff, I saw a report, on FNC I think it was, about a woman in Michigan who had EIGHT (That’s more than John McCain) properties that she acquired using these sub prime mortgages. They never said what she was doing with them. However, they did say that, when things started to go downhill, she took off for her former home in Mississippi and let the properties go into foreclosure. I only saw the report one time but it sure was a quick lesson for me in what kinds of shenanigans were being pulled with all this sub prime crap.


20 posted on 11/23/2008 3:49:00 PM PST by FlingWingFlyer (For more information on America's "new direction", read The Road to Serfdom. by Friedrich A. Hayek.)
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To: CaliGangsta

Cramer has no idea either. Has he gone to rehab for his speed habit yet? Only explanation for his delusory advice.


21 posted on 11/23/2008 3:49:03 PM PST by IreneE ("The apprehension of beauty is the cure for apathy." - my paraphrase of Thomas Aquinas)
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To: BuckeyeTexan
My respect for those white-collared financial 'experts' is in the negative category. They are so wrong, so often, that is is actually prudent to do the opposite of what they say. Joe the plumber manages his finances better than these fools manage the country's or their client's.
22 posted on 11/23/2008 3:50:17 PM PST by Chris DeWeese (http://www.lifeinkc.com)
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To: BuckeyeTexan
Oh, brother.

Conservatives said "Buy American." The UAW took conservatives' money and used it to buy the presidency. No, thanks. Buy American-made Hondas and Toyotas.

23 posted on 11/23/2008 3:51:23 PM PST by fightinJAG (TWO BIG BUSH TAX CUTS EXPIRE AT THE END OF 2008. Happy New Year, love, President Obama)
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To: VRWC For Truth
Harvard University graduate ... I see a pattern. Havard = losers.

You may enjoy this

24 posted on 11/23/2008 3:51:33 PM PST by Chris DeWeese (http://www.lifeinkc.com)
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To: BuckeyeTexan
Bernanke: I Was Wrong About Subprime Crisis

I remember reading a profile on Bernanke and how he'd been fascinated
by The Great Depression even from his childhood.
He'd heard his grandmother in Charlotte, NC talk about how "nobody
had any money" during the 1930s.
After reading the profile, I foolishly thought "well, maybe this
is the sort of financial guy that will really be on guard against
financial malfeasance that might start The Second Great Depression."

Shows what I know about economists.
25 posted on 11/23/2008 3:51:33 PM PST by VOA
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To: BuckeyeTexan

Two people who were totally right about this whole thing for the past two years have been the most ridiculed people on FR: Ron Paul and Glenn Beck. Flame me too, it won’t change anything. We’ll have to cough up some XXX billion more dollars for my grandchildren and their children to pay off with hard labor. It won’t end until the entire financial/corporate market is under government control. And Lord knows how efficient and economical the feds are.


26 posted on 11/23/2008 3:52:27 PM PST by PistolPaknMama (Al-Queda can recruit on college campuses but the US military can't! --FReeper airborne)
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To: Shannon

Yes, if he had any shame, but I actually want him to stay and suffer and face the cameras, knowing that none of us believe anything he says.


27 posted on 11/23/2008 3:52:49 PM PST by SnarlinCubBear (Obama - All ego and mouth - Dr. Thomas Sowell)
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To: BuckeyeTexan

Paulson was the other parrot, repeating over and over that the crisis was contained, even though the market was clearly indicating otherwise at the time.


28 posted on 11/23/2008 3:53:30 PM PST by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: BuckeyeTexan

OK, your profile page is just really really funny!


29 posted on 11/23/2008 3:54:26 PM PST by SnarlinCubBear (Obama - All ego and mouth - Dr. Thomas Sowell)
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To: FlingWingFlyer
EIGHT (That’s more than John McCain) properties that she acquired using these sub prime mortgages.

I've heard a lot about this kind of thing going on -- anecdotal, but still too many times for it to be irrelevant. I suspect too many of the banks/mortgage lenders just threw caution to the wind -- I mean more than they had to, even looking down the barrel of the gun of the Clinton Justice Dept. Being a natural cynic (hey, I'm from MA!), I further think there was probably a lot of fraud and collusion between the mortgage companies and favored speculators taking gross advantage of the relaxed credit standards.

30 posted on 11/23/2008 3:54:57 PM PST by maryz
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To: Shannon
>>> When a person make a “mistake” as huge as this, isn’t he supposed to resign?

Call me old-fashioned, but I think the traditional Japanese method of suicide by disembowelment with a sword or dagger would be more appropriate!!!

Seppuku (or harakiri (腹切り)


31 posted on 11/23/2008 3:55:59 PM PST by BP2 (I think, therefore I'm a conservative)
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To: CaliGangsta
Cramer: “HE HAS NO IDEA”.

Is this the Cramer who said buy Bear Stearns. LOL -- he obviously had no idea either.

32 posted on 11/23/2008 3:56:37 PM PST by jersey117
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To: BuckeyeTexan

Idiot could have just read Willie Green’s posts, before he was banned.


33 posted on 11/23/2008 3:56:47 PM PST by jammer
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To: Batrachian

I have a question. We’re told when the foreclosures started the value of these securities went down. Haven’ there always been foreclosures? Why was it so bad this time? Is it because the value of the property plummeted as well when during “regular” foreclosures the property value stays the same or appreciated. Am I correct?


34 posted on 11/23/2008 3:56:58 PM PST by Terry Mross ( It's just a matter of time before we're all 'GUILTY' of hate speech.)
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To: BuckeyeTexan

“An ex is a has-been. And a spurt is a drip under pressure”


35 posted on 11/23/2008 3:57:59 PM PST by mo
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To: VOA

When Bernanke used the Great Depression as a measuring stick to determine his impressions on where the market was heading nowadays, he failed to calculate a most crucial factor.

Back then, people were, for the most part, honorable.

Today, they are not.


36 posted on 11/23/2008 3:58:08 PM PST by airborne
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To: maryz

I think so too.


37 posted on 11/23/2008 3:58:12 PM PST by FlingWingFlyer (For more information on America's "new direction", read The Road to Serfdom. by Friedrich A. Hayek.)
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To: BuckeyeTexan

Don’t hang Bernanke alone. Barney Frank has been quoted as saying he wants to “roll the dice” and allow these mortgages to go on, despite the warnings the GOP was giving in Congress at the time (2003?).


38 posted on 11/23/2008 3:58:25 PM PST by Teacher317 (Well, at least we know Obama isn't the anti-Christ. Satan would have more class.)
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To: BuckeyeTexan

Bernanke, you’re doin’ a heck of a job.


39 posted on 11/23/2008 3:58:49 PM PST by kenth (It's now spend and tax. How's that for change?)
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To: staytrue

It is almost as if the Man upstairs is giving us one last warning about running a corrupt government.


40 posted on 11/23/2008 3:59:35 PM PST by B4Ranch (("In politics, nothing happens by accident. If it happens, you can bet it was planned that way." FDR)
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To: BuckeyeTexan

“Gee, I never realized that making loans to people who were unqualified would ever be a problem.”


41 posted on 11/23/2008 3:59:36 PM PST by Mad_Tom_Rackham (The committed will surely dominate the complacent.)
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To: BuckeyeTexan

Bernanke knew he was “wrong” at the time he made those statements - they were made for political purposes.


42 posted on 11/23/2008 3:59:52 PM PST by Mr. Jeeves ("One man's 'magic' is another man's engineering. 'Supernatural' is a null word." -- Robert Heinlein)
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To: VOA

Or maybe he was so fascinated by it, he just had to have one for himself.


43 posted on 11/23/2008 4:01:12 PM PST by kenth (It's now spend and tax. How's that for change?)
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To: BuckeyeTexan

The GOP had all three houses from 2000-2006. They did nothing to address these issues. They just let Barney Frank and the minority Dems control the field. Don’t forget to lay blame at the Republican Party’s cowardly feet, too.


44 posted on 11/23/2008 4:01:22 PM PST by Teacher317 (Well, at least we know Obama isn't the anti-Christ. Satan would have more class.)
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To: jammer

You’re right. I remember following threads where his views were slammed. There was one other freeper (I can’t recall his screen name) who used to post housing bubble threads long before the housing market tanked.


45 posted on 11/23/2008 4:02:04 PM PST by jersey117
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To: Tzimisce
>>>No problem. Just give the two TRILLION dollars back and we’ll call it “okay”.<<<

According to an IBD article the other day the current total of all bailouts authorized is $3.8 Trillion.

You got almost twice as much coming back as you thought.

sorry....couldn't help it.

46 posted on 11/23/2008 4:02:27 PM PST by HardStarboard ("The urge to save humanity is almost always a false front for the urge to rule - Mencken knew Obama)
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To: SnarlinCubBear

:)

I polished off at least 3 bottles between Nov. 5th and Nov. 9th. It’s a good thing they can’t arrest one for driving under the influence of Hershey’s chocolate syrup. I’d have lost my license.


47 posted on 11/23/2008 4:02:46 PM PST by BuckeyeTexan
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To: BuckeyeTexan

And the incoming Obama administration is bringing in Geithner as Treasury Secretary... the guy heading the NY Fed Bank, who agreed with Paulson & Bernanke that subprime was not a systemic risk, who worked with Paulson & Bernanke on the various bailouts, who crafted the TARP-trap with Pualson & Bernanke and then decided to change it mid-stream, who argued in Sep-08 that we needed to spend $700B within days and then come mid-Nov hasn’t figured out how to spend 1/2 of it.


48 posted on 11/23/2008 4:03:06 PM PST by sanchmo
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To: PistolPaknMama

Beck claims (I don’t remember it personally) he was predicting “Dow 7500” when it was at 14000 and climbing.

Now (as of last Friday) he’s predicting “Dow 5000 or lower”.


49 posted on 11/23/2008 4:03:15 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: jersey117; ex-Texan
There was one other freeper (I can’t recall his screen name) who used to post housing bubble threads long before the housing market tanked.

Ex-Texan?

50 posted on 11/23/2008 4:04:39 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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