Free Republic

The Spanish Prisoner is a confidence trick originating in the late 19th century. The con artist tells “the mark” that a wealthy person is being held captive and that money needs to be raised to release the wealthy person from the jailers. Allegedly, when the prisoner is released, the mark will receive a handsome reward. Needless to say, something always goes wrong with the negotiations and the mark is asked for more and more money until there is nothing left. Spain, coincidentally, just claimed to find a pile of unpaid bills and needed to raise their budget deficit to 8.9%...

According to Freddie Mac, mortgage rates in the U.S. fell to a record for a third straight week. The average rate for a 30-year fixed loan dropped to 3.79 percent in the week ended today from 3.83 percent. Fannie Mae 30 year current coupons (the rate on Fannie Mae MBS) fell as well, but not to the lowest point in recent months.\ As Europe continues to experience a financial crisis, investors continue to invest in our Treasury market (driving down yields). 30 year mortgage rates follow the 10 year Treasury yield. Greece, Portugal and Spain continue to experience problems with...

Bond yields are of 7/32 this morning in early trading. Mortgage rates continue to plummet to almost all time low points. The gift from the European fiasco is the gift that keeps on giving if you are in the market for a mortgage for purchasing or refinancing.

Banks profit by making loans, not refusing them. So why are banks making fewer loans to small business these days? On March 29, at a lecture at George Washington University, Federal Reserve Chairman Ben Bernanke innocuously remarked that lately “small businesses have … found it difficult to get credit.” Too bad that none of the students at the lecture thought to ask him why. A case can be made that the Fed is partially responsible. Bankers, small business owners, and policymakers all agree that small business lending has declined substantially since before the financial crisis and Great Recession. Business loans...

Paul Krugman is now so far into outer space with ridiculous economic proposals that even Helicopter Ben Bernanke recognizes Krugman's proposals as "reckless". Bloomberg reports Bernanke Takes On Krugman’s Criticism Ignoring Own Advice

After its bond-buying programs expired, the Fed in September began a $400 billion program dubbed Operation Twist. Under that program, the Fed is not expanding its portfolio but instead selling shorter-term securities it owns and buying longer-term bonds to keep their rates down. The program is scheduled to end in June. On Friday, the government will issue its first estimate of economic growth for the January-March quarter. Many economists are predicting an annual growth rate of 2.5 percent — better than they had expected when the year began. Ben Bernanke AP Federal Reserve Chairman Ben Bernanke... View Full Caption But...

According to Bloomberg, The Netherlands is experiencing backlash against austerity, France is seeing Sarkozy possibly losing to a Socialist and Merkel’s austerity policies are coming under increased attack. This, of course, is no surprise. No one wants to pay for the massive entitlement and government spending programs. So, the answer is … print more money. Fed Vice Chair Janet Yellen said today that there will be no monetary tightening after Operation Twist expires. On it’s own, expiring Twist will in the 10 year rising about 25 basis points. Notice that the U.S. Treasury 10 year yield dropped this morning while...

Did Bernanke Prevent Another Great Depression? Politics / US Economy April 22, 2012 - 07:02 AM By: Frank Shostak In a lecture given at George Washington University on March 27, 2012, the chairman of the Fed said that the US central bank's aggressive response to the 2007–2009 financial crisis and recession helped prevent a worldwide catastrophe. Various economic indicators were showing ominous signs at the time. After closing at 3.1 percent in September 2007, the yearly rate of growth of industrial production fell to minus 14.8 percent by June 2009. The yearly rate of growth of housing starts fell from...

April 19 (Bloomberg) — Sales of previously owned U.S. homes in March unexpectedly fell for the third time in the last four months, showing an uneven recovery in the housing market. Purchases dropped 2.6 percent to a 4.48 million annual rate from 4.6 million in February, the National Association of Realtors reported today in Washington. The median forecast of economists in a Bloomberg News survey called for an increase to 4.61 million. In January, sales at a 4.63 million rate were the strongest since May 2010. And The West is not the best. Down 7.38%. But at least median house...

STONE MOUNTAIN, Georgia (Reuters) - The U.S. economy has yet to fully recover from the effects of the financial crisis, and regulators must continue to find new ways to strengthen the banking system, Federal Reserve Chairman Ben Bernanke said on Monday. "The heavy human and economic costs of the crisis underscore the importance of taking all necessary steps to avoid a repeat of the events of the past few years," Bernanke told a group of economists and finance experts at a conference sponsored by the Federal Reserve Bank of Atlanta.

More regulatory action may be needed to safeguard the money-market mutual-fund industry, Federal Reserve Chairman Ben Bernanke said in remarks prepared for a speech on Monday night, putting his weight behind other officials who want to toughen oversight of the $2.7 trillion industry. In an address largely focused on scrutinizing murky corners of the financial system, the shadow banking system, Bernanke emphasized the need to establish regulations that protect the system as a whole from the risks that threatened it during the financial crisis. The money-market mutual-fund industry remains prone to destabilizing panics even with new regulations already in place,...

At a speech in Boston yesterday, FHFA's Acting Director Ed DeMarco once again brought up the topic of principal reductions for homeowners. In the speech, he discussed FHFA's reasoning for their preference of forbearance over principal reductions as a tool to help distressed homeowners. The fundamental point of a loan modification is to adjust the borrower’s monthly payment to an affordable level. We have seen repeatedly that what matters most in successfully helping borrowers is a meaningful reduction in the monthly payment to an amount that helps stabilize the family’s finances. Indeed, we have found that payment reduction, not loan-to-value,...

NEW YORK (AP) -- Stock futures tumbled Wednesday after economic policymakers signaled that they may be less willing to fund more economic growth through bond purchases. The Dow Jones industrial average futures fell 112 points to 13,020. The Standard & Poor's 500 index futures fell 12.1 points to 1,396.7. The Nasdaq composite futures slipped 21.25 points to 2,757.75. The Institute for Supply Management will release its services index at 10 a.m. Eastern time and economists expect it to show that growth has cooled compared to February, which came in at the highest growth in a year. But it was the...

Bernanke's blind faith in empirical formulas over common sense is again in play with his speech today on Recent Developments in the Labor Market. In any given month, a large number of workers are being hired or are leaving their current jobs, illustrating the dynamism of the U.S. labor market. For example, between 2001 and 2007, private employers hired nearly 5 million people, on average, each month. Total separations, on average, were only slightly smaller. Taking the difference between gross hires and separations, the net monthly change in payrolls during this period was, on average, less than 100,000 jobs per...

Arends: Forget the Labor Department's jobs numbers. For a true picture of the bleak employment picture, use the Guy Rate. ~snip~ There are many reasons to distrust the unemployment figures. The most obvious is that those who give up looking for work no longer count among the official "unemployment." (Extraordinary, but true.) But we know Ben Bernanke looks at the raw data. What is he seeing? ~snip~ As you can see -- and as Ben Bernanke surely sees -- the picture remains grim. Just 75% of these guys are in full-time work -- or, to put it another way, one...

Declining jobless numbers, sprouting lately from the Obama administration like so many spring crocuses, have left even the Chairman of the Federal Reserve puzzled over figures that are "out of sync" with the overall economy.

“First they ignore you. Then they laugh at you. Then they fight you. Then you win.” –Mahatma Gandhi Ben Bernanke did something odd this week – he made some meaningful comments about the gold standard system, which is the only sensible alternative to the Ben-Bernanke-makes-it-up system we have today. He did this, I would say, because of increasing pressure, especially from the conservative grassroots in the U.S., which is translating into constant criticism of Bernanke’s super-easy-money actions at the Fed from U.S. conservative politicians. I would say that we are well beyond the “ignore you” stage, and are in fact...

Federal Reserve Chairman Ben Bernanke is giving lectures on the University Circuit attacking the proposal for the U.S. to return to a gold standard. In his contempt for honest money, Bernanke argued that government monopoly money is more valuable than gold! In his incredulous argument Bernanke said that the strength of a gold standard is its greatest weakness because if the money supply is determined by the supply of gold, it cannot be ‘adjusted’ (a.k.a. manipulated by the Fed and politicians) in response to changing economic conditions." That’s the whole point! Our founding fathers intentionally implicitly mandated that money had...

Federal Reserve Chairman Ben Bernanke is giving lectures on the University Circuit attacking the proposal for the U.S. to return to a gold standard. In his contempt for honest money, Bernanke argued that government monopoly money is more valuable than gold! In his incredulous argument Bernanke said that the strength of a gold standard is its greatest weakness because if the money supply is determined by the supply of gold, it cannot be ‘adjusted’ (a.k.a. manipulated by the Fed and politicians) in response to changing economic conditions." That’s the whole point! Our founding fathers intentionally implicitly mandated that money had...

Swiss America Chairman Craig R. Smith comments on the Bernanke/Geithner testimony to Congress: While watching the testimony of U.S. Treasury Secretary Geithner and Fed Chairman Bernanke today, I was struck by several answers provided by the witnesses. One answer stood out amongst them all. In answering questions about funding of the IMF for the financial needs in the Eurozone, the U.S. Treasury Secretary said the chance of a default by the IMF, or any of its borrowers of money provided by the U.S. is extremely low. Why? Because the loans are all "backed by IMF gold"! ...

The Federal Reserve’s chairman, Ben S. Bernanke, spent the better part of an hour Tuesday afternoon carefully explaining to a class of college students why the United States abandoned the gold standard in the 1930s. “Unfortunately gold standards are far from perfect monetary systems,” he told the class of 30 undergraduates at George Washington University. Tying the supply of money to the supply of a precious metal limits a government’s ability to address economic problems, Mr. Bernanke explained.

The Federal Reserve Board’s Open Market Committee will announce this afternoon whether it is keeping the Fed Funds target at current levels or doing something else. Update: as expected, no changes. Housing One asset class that has weighed heavily on The Fed’s mind is the housing market. The Fed Funds Target rate fell off the cliff in January 2008 and fallen steadily to virtually zero. But notice that home prices (as measured by FNC’s 20 Metro house price index) has continued its downward path despite historically low Fed Funds Target rate and mortgage rates. Stock Market On the other hand,...

Federal Reserve Chairman Ben Bernanke on Wednesday offered a tempered view of the U.S. economy, pouring cold water on the notion that recent upbeat signs herald a stronger recovery. Bernanke told Congress that unless growth accelerated, the unacceptably high U.S. unemployment rate would not keep dropping. But he stopped short of signaling further Fed bond purchases, dashing the hopes of some traders in financial markets who were betting on more monetary stimulus. "The job market is far from normal," Bernanke said. "Continued improvement ... is likely to require stronger growth in final demand and production." The swift decline in the...

Federal Reserve Chairman Ben Bernanke warned Congress Wednesday it risked taking the nation over a "massive fiscal cliff" at the end of the year. The central bank’s boss warned expiring tax cuts and spending cuts set to be triggered at the end of the year could hurt the economic recovery. “Under current law, on January 1, 2013, there's going to be a massive fiscal cliff of large spending cuts and tax increases,” Bernanke told the House Financial Services Committee. "I hope that Congress will look at that and figure out ways to achieve the same long-run fiscal improvement without having...

Anytime Ron Paul sits across from Ben Bernanke you know sparks will fly. Sure enough, they did: starting 50 seconds into the clip below, Ron Paul, guns blazing, asks the Chairman if he does his own shopping, if he is aware of what true inflation is, and if he knows that Americans don't trust the government because they are being lied to about inflation. And it only gets better, once Paul starts brandishing a silver coin. The punchline: "The Fed will self-destruct anyway when the money is gone" - amen. And ironically letting the Fed keep on doing what it...

On Gas, Cars And BernankeBruce KrasteringFebuary 25, 2012 Everyone is talking about gas this past week, and for good reason. The price at the pump has been tearing higher. According to the papers this morning the national average price for regular gas is $3.65. Unfortunately for me, the price the media is spouting has nothing to do with my cost. As of this morning, my local gas guy is charging $4.85 for premium fuel, and that’s the stuff my car uses. I doubt the numbers being bandied about regarding prices at the pump actually reflect the real economic consequences. I'll...

Three years ago yesterday Barack Obama signed his $800 billion Stimulus into law in Denver, Colorado.  He said would save or create 4 million jobs and that the unemployment rate would be below 6% by now.  He failed.Obama’s spending didn’t stop with the Stimulus of course.   In fact he’s piled up more than $4 trillion of new debt during his first three years with more than a trillion of additional red ink expected this year.  Still the question remains, where are the jobs?  Today more than 13 million Americans that want a job can’t find one.   Another 4 million Americans have...

While many Americans celebrated Groundhog Day [last Thurs]day, lawmakers in Washington were participating in a more regular tradition: debating the state of the economy. Federal Reserve Chairman Ben Bernanke took the stand before the House Budget Committee to defend the central bank’s recent policy decisions, a performance that mirrored the pomp and circumstance of the activities in Punxsutawney. Bernanke’s repetition of poor policy prescriptions was a fitting way to celebrate the national holiday. Once again, he insisted that interest rates will remain low without affecting inflation, and that government spending will increase job growth. In fact, Bernanke warned lawmakers ahead...

Fed chief Bernanke issues debt warningBy North America correspondent Jill Colgan, ABC February 3, 2012, 11:08 am United States Federal Reserve Chairman Ben Bernanke has warned that the US economy could face the same fate as troubled European countries if it fails to curb its growing debt. Mr Bernanke delivered a sobering assessment of the economy that defies recent attempts by the Obama administration to talk up the economic turnaround. Testifying before a House Budget Committee, he said the pace of recovery had been "frustratingly slow". He urged lawmakers to be more aggressive in reducing the nation's $15 trillion debt...

Federal Reserve Chairman Ben Bernanke is giving a presentation to the House Budget Committee on “The State of The U.S. Economy.” Here is the CSPAN link. In summary, he says the economy is growing, Europe is still a problem (and will continue to be so for a long-time). His Q&A with the committee is very interesting. 1. He will do everything possible to protect the U.S. from Europe (he has already stated that The Fed will likely keep interest rates at near zero through at least late 2014). 2. He talked about the unsustainable fiscal condition in the U.S. (trillion...

U.S. Economy Waist Deep In The Big Muddy Economics / US Economy Jan 28, 2012 - 02:50 AM By: Peter Schiff With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow. The signposts are easily understood: the Fed will stop at nothing in pursuing its goals of creating phantom GDP growth, holding...

Well, we got an inflation target from the Fed. Basically, thinking at the Fed has been eliminated. The process has been automated. Bernanke has convinced the Fed board to adopt Core PCE as a determinate of monetary policy. So long as CPCE stays below 2%, Ben is going to have his foot planted on the monetary metal. It’s “full speed ahead” according to the Chairman. He’s pushed things off until 2014 – a very long time from now. My question: “Why is the Fed using CPCE versus another measure of inflation?” The very good news is that there is answer,...

The Fed Is Worried -- And You Should Be Too Comstock Partners January 26, 2012The Fed is worried, and you should be too. That is the major take-away from yesterday's FOMC statement, combined with its release of updated projections and Bernanke's press conference. Despite the market's cheering of the promise of a near-zero fed funds rate until late 2014 and the prospect of QE3, the Fed is fighting a lonely battle against severe economic headwinds----and they know it. In answering a reporter's question, Bernanke made it crystal-clear that he does not believe that the recently optimistic economic releases are sustainable....

The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy. Bernanke on Wednesday opened the door a bit wider for the Fed to return to buying securities in the months ahead to buttress a weak recovery and keep inflation from slipping too far below its newly adopted 2-percent target. "It sounds like the finger is on the trigger," said Thomas Simons, a money market economist at Jefferies & Co. The Fed's announcement that it was unlikely to...

So far, during the presidency of Barack Obama, the price of a gallon of gasoline has jumped 83 percent, according to data from the Bureau of Labor Statistics. (AP Photo) During the same period, the price of ground beef has gone up 24 percent and price of bacon has gone up 22 percent. When Obama entered the White House in January 2009, the city average price for one gallon of regular unleaded gasoline was $1.79, according to the BLS. (The figures are in nominal dollars: not adjusted for inflation.) Five months later in June, unleaded gasoline was $2.26 per gallon,...

Looking at the Federal Reserve's FOMC meeting schedule for the rest of the year one meeting looms politically large, the meeting on October 23-24 (September 12th a close second). This meeting takes place just two weeks before the November 6th Presidential election. A Fed decides to make a dovish move at this meeting, thereby rallying the markets just weeks before the election, there is no question it would have a psychological effect on voters in favor of the Obama administration.

WASHINGTON – The desperation of homebuilders was a running joke among top Federal Reserve officials during the waning phase of the housing bubble in 2006, according to transcripts released Thursday. They laughed about the cars that builders were giving to buyers. They laughed about efforts to make empty homes look occupied. They laughed at a report that one builder said inventory was rising “through the roof.”

The U.S. government-run mortgage finance firms Fannie Mae and Freddie Mac could play a bigger role in turning around the battered U.S. housing market, the Federal Reserve told Congress, a call that looks set to run into stiff political opposition. The Fed, in a paper sent to lawmakers on Wednesday, outlined an array of steps that could be taken to help the housing sector, including allowing Fannie and Freddie to provide cheaper mortgages to a broader pool of homeowners. The two companies, the biggest sources of U.S. mortgage funding, were seized by the government in 2008 when they were on...

First it was Zero Hedge. Then Ron Paul joined in. Now it is the turn of a former Dallas Fed Vice President, Gerald ODriscoll, to outright accuse the Fed of bailing out Europe courtesy of "incomprehensible" currency swaps, and implicitly accusing Bernanke of lying that he would not bail out Europe even as he has done precisely that. And not only that: by cutting the USD swap spread from OIS+100 to OIS+50, the Fed has made sure it gets paid less than ever for extended Europe the courtesy of bailing it out all over again. Incidentally, O'Driscoll says, "America's central...

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday pushed back against reports that the Fed had lent banks $7.77 trillion or more during the financial crisis, saying they contained "egregious errors and mistakes." Bloomberg Markets Magazine last month published an article called "Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress." The article was widely referenced by other news organizations, including the New York Times. The Bloomberg article said the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system when all guarantees and lending limits were added up. While Bernanke did not...

Major television broadcast and cable TV networks have refused to air ads of animated Obama and Bernanke characters, on grounds that they were “too political.” Google TV has broken this censorship of the ads by the old establishment media, making it possible for DISH and DirecTV to begin airing the ads. The two provocative commercials were developed by Swiss America Trading Corp., a national investment firm that was clever enough to do an ‘end run’ around the networks by going through Google whose contract with DISH and DirecTV satellite networks resulted in the scheduled airing of the ads on Monday,...

Leaping Toward The Keynesian Dream By Jeffrey Tucker 11/30/11 The Fed’s latest inflationary scheme sounds like a technocratic innovation. It lowered the costs of currency swaps between central banks of the world with the idea that the Fed would do for the globe what Europe, England, and China are too shy to do, which is run the printing presses 24/7 to bail out failing institutions and economies. In effect, the Fed has promised to be the lender of last resort for the entire global economy. It sounds new, but it is not. Following the Second World War, John Maynard Keynes...

The U.S. Federal Reserve, acting with five other central banks, took steps Wednesday to boost the troubled global financial system by making it cheaper for banks to trade in U.S. dollars. The Fed -- along with central banks of the eurozone, England, Japan, Switzerland and Canada -- announced a coordinated plan to lower prices on dollar liquidity swaps beginning on December 5, and extending these swap arrangements to February 1, 2013.

WASHINGTON -- Federal Reserve Chairman Ben Bernanke on Thursday tried to reassure U.S. soldiers, a group hit hard by high unemployment, that the Fed is working to strengthen the economy. In a speech at Fort Bliss, Bernanke told the soldiers and their families that the Fed is trying to lower unemployment. He talked about the Fed's policies of keeping short-term rates near zero and buying securities to try and lower longer-term rates, such as mortgages. Many veterans of the Iraq and Afghanistan wars are returning home to find few jobs and limited prospects. The unemployment rate for veterans of those...

EL PASO, Texas -- Federal Reserve Chairman Ben S. Bernanke will be hosting a town hall meeting at Fort Bliss in El Paso with soldiers and their families and greet military personnel returning from combat. Bernanke's trip to Fort Bliss is his first visit to an Army installation. It will also be his first visit to the state after GOP presidential candidate and Texas Gov. Rick Perry said earlier this year Texans would treat him "ugly" if he continued lowering interest rates. Perry and other critics say that policy is akin to recklessly printing money. Another Texan seeking the presidency,...

America's top central banker "sympathizes" with the Occupy Wall Street protesters and thinks many of their frustrations with the sluggish economy are "understandable." But there's one complaint Ben Bernanke does take issue with: the backlash against the Federal Reserve. "I think that the concerns about the Fed are based on misconceptions" The Occupy Wall Street protests, which started in New York in September and have since spread around the world, are known for their ever-evolving and diverse list of grievances. Among them are the common themes of distaste for the banking system and frustration with government. With that in mind,...

As the Federal Reserve downgraded its economic projections, Chairman Ben S. Bernanke admitted that the central bank's board was in the same distressing position as the average American family — frustrated by the slow recovery, limited in its options and largely reduced to hoping for the best. "I certainly understand that many people are dissatisfied with the state of the economy," Bernanke told reporters Wednesday when asked about the Occupy Wall Street protests. "I'm dissatisfied with the state of the economy." The Fed noted in its official statement after its two-day meeting that economic conditions strengthened somewhat from July through...

To know what is wrong with the Federal Reserve, one must first understand the nature of money. Money is like any other good in our economy that emerges from the market to satisfy the needs and wants of consumers. Its particular usefulness is that it helps facilitate indirect exchange, making it easier for us to buy and sell goods because there is a common way of measuring their value. Money is not a government phenomenon, and it need not and should not be managed by government. When central banks like the Fed manage money they are engaging in price fixing,...

Federal Reserve officials are starting to build a case for a new program of buying mortgage-backed securities to boost the ailing economy, though they appear unlikely to move swiftly. The idea would be to target any new efforts by the central bank at the parts of the economy that are most severely impeding a recovery—the housing and mortgage markets—by working to push down mortgage rates. Lower mortgage rates, in turn, could encourage more home buying and mortgage-refinancing, and help the economy by freeing up cash for consumers to spend on other goods and services. Mortgage rates are already very low,...

Bernanke to Senate Democrats: Don’t expect more stimulusBy Alexander Bolton - 10/20/11 04:42 PM ET Federal Reserve Chairman Ben Bernanke told Senate Democrats Thursday they should not expect additional monetary stimulus from the Fed, putting pressure on them to pass jobs and deficit-reduction legislation. Some Democratic lawmakers have urged the Fed to take more aggressive steps to spur the economy and lower the national unemployment rate. But Bernanke said he’s done all he can to boost confidence through monetary policy, putting the ball in Congress’s court. “He’s said he’s done all he can do on the monetary side, and I...