Monday, December 21, 2009

WaPo and HuffPo Throw a Double Team Bodyslam at Bernanke

HuffPo's frontpage web site is carrying the headline: Heroic Arsonist Puts Out Own Fire. They continue with this grinning pic of Bernanke:

They then link to a WaPo story, Fed's approach to regulation left banks exposed to crisis, that starts off this way:
Foreclosures already pocked Chicago's poorer neighborhoods but the downtown still was booming as the Federal Reserve Bank of Chicago convened its annual conference in May 2007.

The keynote speaker, Federal Reserve Chairman Ben S. Bernanke, assured the bankers and businessmen gathered at the Westin Hotel on Michigan Avenue that their prosperity was not threatened by the plight of borrowers struggling to repay high-cost subprime loans.

Bernanke, who was in charge of regulating the nation's largest banks, told the audience that these firms were not at risk. He said most were not even involved in subprime lending. And the broader economy, he concluded, would be fine.

"Importantly, we see no serious broad spillover to banks or thrift institutions from the problems in the subprime market," Bernanke said. "The troubled lenders, for the most part, have not been institutions with federally insured deposits."

He was wrong. Five of the 10 largest subprime lenders during the previous year were banks regulated by the Fed.
Stories like this do not appear by accident in Washington D.C. There's a major player still operating to derail the Bernanke renomination. This is not the time to get out of your seat to go to the restroom.

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