Bernanke, Paulson Lies

Thursday, June 18, 2009

Par for the course. Reflate those popped tires and keep driving towards that vast chasm in the distance.

Who trusts anyone right now?

From Austrian Filter via Zero Hedge:

February 28, 2007 – Dow Jones @ 12,268

March 13th, 2007 – Henry Paulson: “the fallout in subprime mortgages is “going to be painful to some lenders, but it is largely contained.”

March 28th, 2007 – Ben Bernanke: “At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained,”

March 30, 2007 – Dow Jones @ 12,354

April 20th, 2007 – Paulson: “I don’t see (subprime mortgage market troubles) imposing a serious problem. I think it’s going to be largely contained.” , “All the signs I look at” show “the housing market is at or near the bottom,”

April 30, 2007 – Dow Jones @ 13,063

May 17th, 2007 – Bernanke: “While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S.”

May 31, 2007 – Dow Jones @ 13,627

June 20th, 2007 – Bernanke: (the subprime fallout) “will not affect the economy overall.”

July 12th, 2007 – Paulson: “This is far and away the strongest global economy I’ve seen in my business lifetime.”

August 1st, 2007 – Paulson: “I see the underlying economy as being very healthy,”

October 15th, 2007 – Bernanke: “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.”

December 31, 2007 – Dow Jones @ 13,265

January 31, 2008 – Dow Jones @ 12,650

February 14th, 2008 – Paulson: (the economy) “is fundamentally strong, diverse and resilient.”

February 28th, 2008 – Paulson: “I’m seeing a series of ideas suggested involving major government intervention in the housing market, and these things are usually presented or sold as a way of helping homeowners stay in their homes. Then when you look at them more carefully what they really amount to is a bailout for financial institutions or Wall Street.”

February 29th, 2008 – Bernanke: “I expect there will be some failures. I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.”

March 16th, 2008 – Paulson: “We’ve got strong financial institutions . . . Our markets are the envy of the world. They’re resilient, they’re…innovative, they’re flexible. I think we move very quickly to address situations in this country, and, as I said, our financial institutions are strong.”

March 18th, 2008 – Bear Stearns Bailout Announced

May 7, 2008 – Paulson: ‘The worst is likely to be behind us,”

May 16th, 2008 – Paulson: “In my judgment, we are closer to the end of the market turmoil than the beginning,” he said.

May 30, 2008 – Dow Jones @ 12,638

June 9th, 2008 – Bernanke: Despite a recent spike in the nation’s unemployment rate, the danger that the economy has fallen into a “substantial downturn” appears to have waned,

July 16th, 2008 – Bernanke: (Freddie and Fannie) “…will make it through the storm”, “… in no danger of failing.”,”…adequately capitalized”

July 20th, 2008 – Paulson: “it’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”

July 31, 2008 – Dow Jones @ 11,378

August 10th, 2008 – Paulson: “We have no plans to insert money into either of those two institutions.” (Fannie Mae and Freddie Mac)

September 8th, 2008 – Fannie and Freddie nationalized. The taxpayer is on the hook for an estimated 1 – 1.5 trillion dollars. Over 5 trillion is added to the nation’s balance sheet.

September 16th, 2008 – $85 Billion AIG Bailout “Loan”

September 19th, 2008 – $700 Billion Bailout Plan Announced

September 19th, 2008 – Paulson: “We’re talking hundreds of billions of dollars – this needs to be big enough to make a real difference and get at the heart of the problem,” he said. “This is the way we stabilize the system.”

September 19th, 2008 – Bernanke: “most severe financial crisis” in the post-World War II era. Investment banks are seeing “tremendous runs on their cash,” Bernanke said. “Without action, they will fail soon.”

September 21st, 2008 – Paulson: “The credit markets are still very fragile right now and frozen”, “We need to deal with this and deal with it quickly.”, “The financial security of all Americans … depends on our ability to restore our financial institutions to a sound footing.”

September 23rd, 2008 – Paulson: “We must [enact a program quickly] in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families’ financial well-being, the viability of businesses, both small and large, and the very health of our economy,”

September 23rd, 2008 – Bernanke: “My interest is solely for the strength and recovery of the U.S. economy,”

October 31, 2008 – Dow Jones @ 9,337

March 31, 2009 – Dow Jones @ 7,609From

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Retail Sales Take “Unexpected” Drop

Tuesday, April 14, 2009

Only a complete moron (read: 73 separate economists) would believe that a 1.1% drop in U.S. retail sales is unexpected. What data are these people looking at?

From Bloomberg:

Retail sales were projected to rise 0.3 percent in March after an originally reported 0.1 percent decline the prior month, according to the median estimate of 73 economists in a Bloomberg News survey. Forecasts ranged from a decline of 0.2 percent to a gain of 1.2 percent.

Comical.


Companies That Are NOT Laying Off Workers

Tuesday, April 7, 2009

Three cheers for Costco. From CNBC:

Costco Wholesale’s profit is down 27 percent year-over-year, but the discount store has not laid anyone off, choosing instead to freeze hiring at its corporate offices. The only workers let go have been holiday seasonal hires.

The company says it recognizes that labor remains its most valuable — if costliest — resource.

And Wynn and Equifax, and whoever else. Someone (maybe me) should make a list of companies that have avoided layoffs despite the economy so people know who to give their business to. I encourage everyone to patronize these companies (even if their motive is strictly financial). After all, it is a disgraceful act to layoff workers at a profitable company (which many have done).


Unemployment Hits 8.1%

Friday, March 6, 2009

Submitted without comment.

From CNBC:

U.S. employers axed 651,000 jobs in February, pushing the unemployment rate to its highest in 25 years, as companies buckled under the strain of a recession that is showing no signs of ending, according to a government report.

“Since the recession began, the rise in unemployment has been concentrated among people who lost jobs, as opposed to job leavers or people joining the labor force,” said Bureau of Labor Statistics Commissioner Keith Hall


GDP Dropped 6.2% in Q4

Friday, February 27, 2009

Ouch.

Who wants to take a swing at Q1?

Previously, I said a 6% drop. Do I hear 10%?


Japan’s Exports Halved

Wednesday, February 25, 2009

From Reuters:

Exports plunged a record 45.7 percent in January from a year earlier, Ministry of Finance data showed on Wednesday, roughly matching a median market forecast.

Exports to Asia sank 46.7 percent, the fourth straight month of decline, with shipments to China falling 45.1 percent.

Many Japanese companies ship automobile and consumer electronics parts to assembly lines in Asia, from which final products are shipped to countries across the globe.

A collapse in global demand since late last year, which caught most manufacturers off guard, has led to a sharp increase in inventories and forced many leading Japanese companies to slash production at an unprecedented pace.

With Eastern Europe on the brink and Japan already in depression, America’s “sneeze” has turned into the world’s sepsis.


Buy Now

Sunday, February 22, 2009

Ok, I hesitate to write this one because I believe that the economy is still heading down and we are on the verge of a global depression.

But…

The stock market has just reached near its 10-year low and I believe this mark is roughly the floor. That is not to say that the market won’t test this bottom again and that we are going to have years of, on average, a flat return.

But…

I’m going to buy now.

There are global stimulus efforts afoot, which will create a temporary boost, and there will be opportunities for both active trading gains and, if you’ve got thirty or forty years, tremendous long-term returns.

This is a dark moment. Maybe the darkest yet.

But…

That’s the time to buy. Just don’t do it if you need the money soon and/or can’t stomach the roller coaster. I also warn you that I, like everyone else, have no idea what’s going to happen. I’m going on gut and a sense that you stay calm when everyone else is panicking.

Remember, Cassandra was right.

In this case, I’m just betting – and it is a bet – that I can make money while she screams.