Clueless

The Curiously Uncurious Ben Bernanke

"If I were chairman of the Federal Reserve and didn't understand the forces that move gold, learning about them would be near the top of my to-do list, if for no other reason than a large swath of the investment community uses gold as a barometer to evaluate how good a job I'm doing. Bernanke's clueless quote paints a stark contrast between the academic and real world. Upon observing the recent correction in the price of gold, how many asset managers do you think threw their hands up in confusion and proclaimed that no one can possibly know what's going on, so why even try?" Continue reading →

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U.S. Marshals lose track of 2,000 encrypted two-way radios

"The U.S. Marshals Service has lost track of about 2,000 encrypted two-way radios worth millions of dollars, the Wall Street Journal reported on Sunday. It said an internal technology office had warned about the issue, but the problems tracking the equipment persisted. The U.S. Marshals Service serves to protect federal courts and judges. It also administers the witness protection program and tracks down fugitives. In interviews with the paper, some Marshals said they were worried not only about the wasted money, but also about the prospect of criminals getting hold of the radios and using them to gain access to privileged law enforcement activities." Continue reading →

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Bernanke: I’m Clueless About Gold

"Chmn. Bernanke: When we buy securities from a private citizen, we create a deposit in their bank, and it shows up as reserves. So if you look up our balance sheet, our balance sheet balances. We have Treasury securities on the asset side. On the liability side we have either cash or reserves at banks, and on the margin that’s what has been building up as excess reserves at banks. Rep. Rothfus: You create the reserves? Chmn. Bernanke: Yes. Rep. Rothfus: Is that printing money? Chmn. Bernanke: Not literally." Continue reading →

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Larry Summers’s Billion-Dollar Bad Bet at Harvard

"Matthew Klein at WaPo reminds us of the reckless bet that Larry Summers made on interest rates when he was president of Harvard. The Harvard endowment suffered serious losses. These were the risky investments that Iris Mack warned Summers about in an email and which resulted in her getting fired. Summers is now being considered for chairmanship of the Federal Reserve, where he would be in charge of interest rate policy." Continue reading →

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Riot after Chinese teachers try to stop pupils cheating

"Last year, the city received a slap on the wrist from the province's Education department after it discovered 99 identical papers in one subject. Forty five examiners were 'harshly criticised' for allowing cheats to prosper. So this year, a new pilot scheme was introduced to strictly enforce the rules. By late afternoon, the invigilators were trapped in a set of school offices, as groups of students pelted the windows with rocks. Outside, an angry mob of more than 2,000 people had gathered to vent its rage, smashing cars and chanting: 'We want fairness. There is no fairness if you do not let us cheat.'" Continue reading →

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Senators push bill to replace Fannie, Freddie with national mortgage insurance

"The two firms, which back nearly half of all new U.S. home loans, were chartered by Congress to expand mortgage finance but operated as private, profit-making companies. Given the central role they played in the financial system, the government felt compelled to bail them out when they ran into trouble. The bill would require private entities to buy mortgages from lenders and issue them to investors as securities. Private equity would be required to absorb a 10 percent loss of the principal underlying those new mortgage-backed securities if the loans went bad. A new guarantor, called the Federal Mortgage Insurance Corp., would replace Fannie Mae and Freddie Mac." Continue reading →

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Obama (Scut Farkus), Europe (Grover Dill), and Snowden (Ralphie)

"It is obvious that nobody in the highest levels of government thought through the implications of the bonehead decision of the advisor who decided that the government was going to get Edward Snowden off that plane. It never occurred to him that Snowden was not on the plane. It never occurred to him that toadies in Western Europe would resent the fact that they were exposed as toadies. Finally, he never figured out that this would enable two near-communists and the anti-American President of the number-four oil-exporting nation to the United States the opportunity to offer asylum to Snowden, when they had not had the courage to do this prior." Continue reading →

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Irish ‘rage’ after bank cheated on multi-billion bailout

"The taped conversations, obtained by the Irish Independent newspaper, between John Bowe and Peter Fitzgerald, who led Anglo-Irish's capital markets and retail banking arms, respectively, indicate the Irish government was duped into pumping €7 billion of emergency cash into the bank on the assumption that it would plug the lender's funding crisis. But the €7 billion figure was just a ruse to get the government to put 'some skin in the game,' with the bankers assuming that politicians would have no choice but to provide further emergency funding once they had been 'pulled in'." Continue reading →

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Bitcoin Trade Group Bites Back at California

"The Bitcoin Foundation is defending the virtual currency to California’s banking department, explaining bitcoin doesn’t qualify as a payment instrument under the state’s money-transmission rules. In a lengthy letter addressed to Tara Murphy, an assistant attorney general in the California Department of Financial Institutions, the Washington-based group also stuck up for itself, saying it doesn’t sell or exchange the virtual currency. California is known to be particularly aggressive in enforcing money-transmission rules. In the letter, the foundation made it clear that it doesn’t even operate in California." Continue reading →

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