PressTV: US Fed shocked at 2008 collapse

So during the financial crisis of 2008, the guys in charge didn’t believe it would be a problem, while the finance- watchers, both pro and am, from Peter Schiff to yours truly, were jumping up and down screaming TSH is going to HTF! So outside observers actually seem to understand finance better than the captains of the Titanic! It’s as though passengers on the Titanic knew “this sucker is going down” while the captain and crew are saying, “everyhting is OK, wait and see.” There’s some kind of interesting psychology going on here, and it doesn’t just apply to the Fed; it applies to things like college administrations where they demand to increase diversity even though it is easily predictable that this will lose money, then fire the admissions director for losing money. The people who are actually in power seem to be psychologically disabled from perceiving very ordinary reality and common sense. Speaking of which, liberal philosophy professors bash common sense as ignorance, because they know so much better than the common folk. Professor Bernanke would have dismissed us in a similar way, and professors also dismiss common sense on race, divilization and demographics. Clever Sillies is the term that’s been coined for rule by Marxist professors, whose number one belief is that the world should be ruled by Marxist professors!

Anyway, to wrap this up — the whole premise of Mindweapons in Ragnarok is that the Clever Sillies are going to crash the system; they are creating Ragnarok with their clever silliness, and it is up to us to survive and thrive Clever Silly Doom, and then make sure those bastards are out of power and salt their fields so they don’t get so much as a job teaching kindergarten. The Clever Sillies must no longer be allowed to fail upward! When we get a chance, we purge them from all positions of power and influence, and replace them with people of common sense.

At a September meeting held one day after Lehman went bankrupt, some Fed officials speculated the economic impact could be muted, and would perhaps be restricted to New York City or the financial sector.

Others argued it was a positive thing that the government did not step in to rescue Lehman, sending a message to markets that the government would not provide a safety net.

Still others, including Chairman Ben Bernanke, said it was too soon to make that call.

“We may have to wait for some time to get greater clarity on the implications of the last week or so,” he said at the Sept. 16 meeting.

Fed officials noted their concerns, but expressed hope that the housing market, which had long driven the decline, could turn around soon and pick the economy back up.

With that in mind, the Fed wrapped that meeting by deciding to keep interest rates at 2 percent.

“Overall I believe that our current funds rate setting is appropriate,” said Bernanke at the time. “I don’t really see any reason to change.”

It turned out that “some time” would be just a few weeks. The bankruptcy of Lehman exacerbated concerns about other major Wall Street banks, as several major institutions teetered on the brink of insolvency or had to be taken over by competitors to remain afloat.

A little over two weeks after the Fed held steady, Congress agreed to pass the massive Troubled Asset Relief Program, giving the government the power to pump hundreds of billions of dollars into the financial sector.

And just days after that, the Fed convened for a rare, phone-in, unscheduled meeting to cut rates by half a percentage point. By December, rates would fall to near-zero, where they currently remain.

Roughly a month and a half after the Fed adopted a “wait and see” approach, they were confident the verdict was in.

“It is becoming abundantly clear that we are in the midst of a serious global meltdown,” said Janet Yellen, then the vice chairwoman of the Fed and now its current head, at an Oct. 28-29 meeting. “The deterioration in overall financial conditions since the September … meeting is truly shocking.”

By the fall of 2008, the Fed had spent most of the year helping the U.S. government battle an economic downturn. The subprime mortgage crisis had enveloped housing giants Fannie Mae and Freddie Mac, necessitating their government takeover in the summer. And in March, the Fed announced plans to provide direct liquidity to financial institutions like JPMorgan.

And Fed officials, including Bernanke and Yellen, were aware of the risks of a recession. In January, Yellen warned that the housing downturn had placed the U.S. “if not beyond, at the brink of recession.”

By the end of the year, the transcripts reveal that Fed officials were deeply concerned about the trajectory of the economy, and had no idea how far it could sink before turning it around.

With that backdrop in mind, Bernanke pressed his colleagues to prepare to take aggressive, and perhaps unprecedented, action to right the economy.

“We do have to continue to be aggressive. We have to continue to look for solutions. Some of them are not going to work. Some of them are going to add to uncertainty,” he said at the Oct. 28-29 meeting. “I recognize that critique. I realize it’s a valid critique. But I don’t think that this is going to be a self-correcting thing anytime soon. I think we are going to have to continue to provide support of all kinds to the economy.”

In November, the Fed announced it would begin buying mortgage bonds directly from Fannie Mae and Freddie Mac in its first round of “quantitative easing.”

Since then, the Fed has gone through three rounds of easing, accumulating trillions of dollars’ worth of securities in its portfolio.

The central bank has faced ample criticism from Republicans over the approach, but the Fed is still buying bonds, albeit at a slower pace. Bernanke announced in his final press conference at the end of 2013 that the Fed will begin shrinking the size of its purchases, and continue to do so so long as the economy continues to improve. The Hill


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10 Responses to PressTV: US Fed shocked at 2008 collapse

  1. “Speaking of which, liberal philosophy professors bash common sense as ignorance, because they know so much better than the common folk.” I began college in 1963-1965, out for three years to work for the rest of my tuition, finished 1968-1969 in an unbroken run. During that time, I believe now that we who did go to college were imparted a sense of bigotry against the working class. I further believe that that inculcated bigotry leads to arrogance, sometimes blatant, sometimes subtle, mostly between those two poles. I, for one, regret having absorbed that miseducation.

  2. From 1984 (bolded parts mine)…

    It need hardly be said that the subtlest practitioners of doublethink are those who invented doublethink and know that it is a vast system of mental cheating. In our society, those who have the best knowledge of what is happening are also those who are furthest from seeing the world as it is. In general, the greater the understanding, the greater the delusion; the more intelligent, the less sane…World-conquest is believed in most firmly by those who know it to be impossible. This peculiar linking-together of opposites — knowledge with ignorance, cynicism with fanaticism–is one of the chief distinguishing marks of Oceanic society. The official ideology abounds with contradictions even when there is no practical reason for them…Even the names of the four Ministries by which we are governed exhibit a sort of impudence in their deliberate reversal of the facts. The Ministry of Peace concerns itself with war, the Ministry of Truth with lies, the Ministry of Love with torture and the Ministry of Plenty with starvation. These contradictions are not accidental, nor do they result from ordinary hypocrisy; they are deliberate exercises in doublethink. For it is only by reconciling contradictions that power can be retained indefinitely. In no other way could the ancient cycle be broken. If human equality is to be for ever averted — if the High, as we have called them, are to keep their places permanently — then the prevailing mental condition must be controlled insanity.

    Of course, Orwell believed that human equality was possible if only “the people at the top” didn’t keep interfering, but he was from a different time. As John Derbyshire pointed out in one of his post-ousting interviews, people used to really believe that stuff.

  3. paladinjustice says:

    Since everyone high up in the “public service” profession (there’s a laugh for you) is a pathological liar, I think they knew the train was headed for a wreck, but don’t want to admit it because then they would have to take the blame for it. Greenspan in particular wants to guard his legacy. For that matter, so does Obama, Bernanke, et al.

    As an aside, a collegue of mine and myself wrote Greenspan a letter after he left the Fed asking him to be senior author on an economics book we had written. We wanted his name and expertise in critiquing what we had already written, and we offered him the lion’s share of the profits. We never heard back from him. I guess that’s because he was working on his autobiography and had an enormous advance already. Of course, I always ask if famous authors write their own stuff or use ghostwriters. Probably the latter.

  4. Pingback: Sabotage the Marxist System by Surviving to See the “Clever Sillies” Purged from Power | saboteur365

  5. ben tillman says:

    It’s interesting that Milton Friedman. ben Bernanke, and Greenspan all blame the Fed for the Great Depression.;wap2

  6. Nick Dean says:

    On page 666 (coincidentally) of former British Home Secretary David Blunkett’s memoirs, THE BLUNKETT TAPES, he let slip that then Chancellor of the Exchequer, Gordon Brown, had warned his cabinet colleagues in July 2004 “of what would happen from 2008 onwards … how dreadful things were going to be and how everybody needed to wind down what they wanted to do.”

    Of course, publicly nothing was ever said, and according to Brown and co. in 2008, the whole crash was a Complete Surprise.

  7. TabuLa Raza says:

    Win converts by going under the radar:

  8. wobbly says:

    “Since everyone high up in the “public service” profession (there’s a laugh for you) is a pathological liar, I think they knew the train was headed for a wreck, but don’t want to admit it because then they would have to take the blame for it. ”

    I think it’s very different from that. They have **evolved** to be the way they are over millenia of being minority money-lenders and needing to survive the cyclical economic collapses that usury creates. Because of this they don’t have any brakes other than those imposed on them by the majority which in the ex-Anglosphere is none. Once you realize this you realize they will always defeat themselves eventually; it’s just a question of how much damage they do in the process and whether one’s own race / nation / ethnicity can survive that damage.

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