More Nitwittery from the Fed

I'm not sure why I keep posting these criticisms of the Fed because they all seem to read the same way and it's a bit like pounding my head against concrete. I may think it is necessary, but it's not going to make me feel any better. History will look back and point out the Fed's many missteps (both from Greenspan and Bernanke) which made the difficulties we faced even worse than they were. As I felt at the start of this financial crisis (well, actually before it) government intervention is predictable and will make a situation which might have caused us a year or two of severe grief, into a situation that will affect us for decades to come as the powers that be fight the inevitable all the way into the economic dump heap of history.

Devil's Dictionary - Financial Edition

This is an absolutely brilliant and hilarious article. You have to have been following the financial meltdown to really "get" what he's talking about. It also helps if you know what the original "The Cynic's Wordbook" is all about.

One of my favorites:

GREEN SHOOTS, n. 1. The first signs of spring, often clobbered by summer's heat and autumn's rain. 2. A sign the economy is falling apart more slowly than previously thought. Related: DAISIES, PUSHING UP. See also THINKING, WISHFUL.

And Another:

CREDIT-DEFAULT SWAP, n. loose translation from the original Latin "ubi mel ibi apes," or "where there's honey there are bees." 1. A complex financial instrument vital to the functioning of a modern economy in the way it spreads risk among consenting parties. (Greenspan, A., pre-Sept. 2008.) 2. A complex financial instrument that nearly destroyed modern capitalism (Greenspan, A., post-Sept. 2008).

Brilliant!

Alan Greenspan - Weasel

Sir Alan is desperately trying to weasel his way out of responsibility for the mess that we are in. Fortunately, facts and data preclude him from doing so.

History's Greatest (Worst) Fed Chairman

The broader public is beginning to get a glimpse into the checkered legacy of Alan Greenspan. This is a pretty good article exploring why he is a central figure, perhaps the central figure in the financial disaster we have on our hands. My favorite part:

“Aren’t you concerned with such a growing concentration of wealth that if one of these huge institutions fails that it will have a horrendous impact on the national and global economy?” asked Representative Bernard Sanders, an independent from Vermont.

“No, I’m not,” Mr. Greenspan replied. “I believe that the general growth in large institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically — I should say, fully — hedged.”

Nice call there Mr. Greenspan.