Wall Street, World Financial Markets Very Sad Free Fed Money May Be Coming To An End

From The Guardian:

Stock markets worldwide plummeted on Thursday, after the Federal Reserve chairman, Ben Bernanke, rattled investors by signalling an end to America's drastic recession-busting policy of quantitative easing.

Share prices across the globe have surged over the past year, helped by an unprecedented injection of cheap money, with the Fed buying up $85bn (£55bn) worth of bonds every month, and the Bank of Japan pledging "shock and awe" QE to revive a stagnant national economy.

But when Bernanke laid out a timetable on Wednesday night for cutting off the Fed's bond purchases by mid-2014, his words prompted a violent sell-off, which began in New York after European markets were closed, and ricocheted around the world on Thursday, from Tokyo to Istanbul and Oslo to Jakarta. In London, the 2.98% decline in the FTSE 100 index was the steepest since September 2011.

Elsewhere in Europe, shares suffered their biggest one-day fall in 19 months, with Spain's Ibex losing 2.9%, and the German, French and Italian markets all down by more than 3%.

The slide on Wall Street resumed when US markets reopened on Thursday. After heavy selling throughout the day the Dow Jones closed down 2.3%.

"We've had a market that for some years has been addicted to stimulus, and it's taken a brave man to say it has to end somewhere," said Neil Mellor, of BNY Mellon. He added that the true test of whether the US economy was strong enough to cope without QE would come when the prop of cheap money had been removed. "We don't know if there's a credible recovery there; we're peeling back the plaster."

Bond prices also fell worldwide, a trend that will push up borrowing costs for governments and consumers if it is sustained. Andy Haldane, the Bank of England's outspoken director for financial stability, warned last week that through QE, policymakers had deliberately inflated "the biggest bond bubble in history".

Let's repeat: "through QE, policymakers had deliberately inflated 'the biggest bond bubble in history'".

From a tech bubble to a real estate bubble to a commodity bubble to a bond bubble.

That's the 21st century economy in a nutshell.

Phonied up profits and stock prices propped up by the Fed printing press and cheap money.

Market-Based B.S.

Global stock markets plunged overnight and here is how Reuters explained the moves:

(Reuters) - Share markets fell sharply on Thursday as investors piled back into safer assets, unnerved by the twin setbacks of unexpected weakness in China's economy and signals that the U.S. central bank may soon scale back its stimulus program.

The yen bounced sharply off recent lows and German Bunds rose, gaining support from a shift in sentiment that followed Fed Chairman Ben Bernanke's comment that the bank may trim its bond purchases at one of its next policy meetings.

A surprise drop in Chinese factory activity in May, followed by data pointing to a second quarter economic contraction in the euro zone, added to investors' worries.

The revived concerns about global growth sent Oil and copper prices lower, and MSCI's world equity index .MIWD00000PUS fell 1.2 percent, putting it on course for its worst day of the month.

Japan's main Nikkei share index .N225 earlier plunged 7.3 percent, its biggest one-day percentage drop in two years and calling a halt to a rally driven by aggressive stimulus measures that the Bank of Japan unveiled in April.

"All the global developments we see in the markets right now are purely liquidity-driven, they are no longer underpinned by fundamentals," said Tobias Blattner European Economist at Daiwa Capital Markets.

"We must learn to live with that kind of volatility."

Let's repeat - "All the global developments we see in the markets right now are purely liquidity-driven, they are no longer underpinned by fundamentals."

This should end well.

The next time you see Ben Bernanke claim the Fed is not creating bubbles, remember that statement:

"All the global developments we see in the markets right now are purely liquidity-driven, they are no longer underpinned by fundamentals."

Obama Set To Screw College Students, Parents On Loan Rules

Oh yes he is:

The Obama administration has found itself at odds with a key voting block—college students and their advocates—as well as many of its Democratic allies in Congress, because of an important, if technical, budget proposal that could have significant implications for college access.

In a move intended to stave off a doubling of interest rates on federally backed Stafford Loans over the summer, the administration is seeking to shift those interest rates from the current predictable, fixed-rate system to a market-based rate at the time of the loan. Right now, interest rates on subsidized Stafford Loans are set at 3.4 percent, but they're slated to jump to 6.8 percent in July, unless Congress and the administration act.

The shift to a 6.8 percent fixed rate could cost a student with $20,000 in debt—roughly the national average—an additional $12,000 over the life of their loan, according to an analysis by the Institute for College Access and Success, a nonprofit organization in Oakland, Calif.

The administration and some Democrats in Congress have very different ideas about how to head off that potential rate increase. Advocates for students agree that under current interest rates, which are at historic lows—for instance, the rate was 1.73 on April 17—President Barack Obama's fiscal 2014 budget proposal offers a better deal for borrowers than they're getting right now.

But the proposal doesn't place any cap on the interest rate, leaving students open to much more expensive loans if interest rates soar in the future, critics argue.

Just hours after the Obama administration released its budget blueprint April 10, a coalition of student-advocacy groups including the National Campus Leadership Council, U.S. PIRG, Our Time, Rock the Vote, and the Young Invincibles put out a joint statement disparaging the loan plan.

 "Students have never taken out federal student loans without a cap on how high interest can go," they wrote. "The president stood with us by investing in higher education during his first term, and we're concerned that his budget does not deliver the same investment this time around."

 Nope - sounds like he's throwing college students and their parents overboard.

6.8% interest rates on student loans is high.

But leaving the Stafford Loan program without a cap means those rates can go much higher than that.

Sure, with the Federal Reserve printing press in overdrive these days, the loan rates are low right now.

But they won't remain low forever.

Not with all those extra Uncle Ben's Federal Reserve Chairman Bernanke threw into the system that eventually he (or his successor) will have to pull out of it.

I dunno, maybe we'll never see 17% interest rates the way we did back in the 70's.

But if we did, and there was no cap on Stafford Loans, that's where those interest rates would go.

Hey, Obama, how about extending the 3.4% rate on Stafford Loans by going on the TV and telling everybody Republicans want to double the loan rate to 6.8% so they can pay off their banker and Wall Street friends?

Bernanke Cannot Guarantee Reliability Of LIBOR Rate

Federal Reserve Chairman Ben Bernanke just admitted in testimony before the Senate that he cannot guarantee the reliability of LIBOR and avoided answering whether U.S. banks are implicated in the rate fixing but did say "two US banks' have been asked to submit detailed information into the ongoing US inquiry into Libor."

Which is a roundabout way of saying "Of course U.S. banks are implicated in the LIBOR fixing scandal!"

It's all rigged.

All of it.

If The Economists Can't Get The Economy Right, Why Should We Trust Them On Education?

The FOMC transcripts from 2006 are out and they show how clueless and idiotic the people running economic policy in this country are:

WASHINGTON — As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.

“We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.

Some officials, including Susan Bies, a Fed governor, suggested that a housing downturn actually could bolster the economy by redirecting money to other kinds of investments.

And there was general acclaim for Alan Greenspan, who stepped down as chairman at the beginning of the year, for presiding over one of the longest economic expansions in the nation’s history. Mr. Geithner suggested that Mr. Greenspan’s greatness still was not fully appreciated, an opinion now held by a much smaller number of people.

Meanwhile, by the end of 2006, the economy already was shrinking by at least one important measure, total income. And by the end of the next year, the Fed had started its desperate struggle to prevent the collapse of the financial system and to avert the onset of what could have been the nation’s first full-fledged depression in about 70 years.

The transcripts of the 2006 meetings, released after a standard five-year delay, clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.

“It’s embarrassing for the Fed,” said Justin Wolfers, an economics professor at the University of Pennsylvania. “You see an awareness that the housing market is starting to crumble, and you see a lack of awareness of the connection between the housing market and financial markets.”

“It’s also embarrassing for economics,” he continued. “My strong guess is that if we had a transcript of any other economist, there would be at least as much fodder.”

These morons have a deep, abiding and arrogant confidence in themselves and their economic models, only it turned out their models were WRONG and they didn't know what the hell they were doing.

And yet these people are still in power, still running things, still, as Cunning Realist noted, "failing upward."

What's worse, they're now bringing their economic models - you know, the ones they were certain were absolutely correct in gauging the economy in 2006 but turned out to be horribly, horribly flawed - to public education by forcing value-added measurements of teachers using student test scores.

We already know that these value-added models have huge margins of error and wide swings in stability, but nonetheless the VERY SERIOUS PEOPLE in this country - from Obama to Cuomo to Bloomberg to Gates and the rest of the corporate criminal class - are promoting these models as absolutely essential for improving public education.

Never mind the margin of error.

Never mind the wide swings in stability.

Never mind that we'll have to add new standardized tests to every grade in every subject to pull this off.

Never mind that tying teacher jobs to these scores means the only thing kids will be doing in schools is either prepping for the tests or taking the tests.

Never mind that the algorithm they're using to measure teachers is so complex NASA scientists have trouble explaining it.

Never mind that the one state already doing this kind of system has discovered it's an absolute mess.

You see, this is SCIENCE they're using in their value-added models and they're going to be able to tell who's a good teacher and who's a bad teacher using these models just the way they can predict future inflation or unemployment rates.

And let's face it, who doesn't trust these guys when they're predicting future inflation and unemployment rates?

Oh, right - they were wrong about that.

Completely wrong.

Oh, well - don't worry, they're going to get this right.

Trust them.

How is it our society continues to listen to economists who are WRONG about almost EVERYTHING, who have DESTROYED people's lives and life savings with the bad calls they have made on the economy in the past and are now are telling us to trust the education and care of children to them through the value-added models they plan to use on teachers?

This is EXACTLY what Cuomo , Obama and Bloomberg are doing by promoting a test score-based evaluation system using a value-added model as the major measure of the evaluation - trust the economists to tell us who is a "good" teacher and who is a "bad" teacher.

I'm sure this will all turn out well - just the way the stewards at the 2006 FOMC meeting made sure things turned out well for the economy at large back in 2007 and 2008.

Here Comes The Inflation

You can't print money night and day at the Federal Reserve to paper over the insolvency of the banking system, hand that money over to the banksters for 0% interest and have them speculate with that money in commodities and not bring nightmare inflation.

Here it comes:

Fresh financial pain is on the way, with price hikes expected on everything from underwear to cereal.

City merchants say they've held the line during the economic downturn, but now, because of the increased cost of cotton, wheat and other commodities, price increases are inevitable on almost everything we use.

"It's like a tsunami - when it happens, it hits you later," said Ricardo Rezk, owner of empanada maker Rico M. Panada in Mott Haven, the Bronx. "The warning siren has sounded."

Consider:

- Global wheat prices more than doubled from June to January, the World Bank says. Corn and sugar prices rose 73%. Experts say that means the price of cereals, sugary drinks and other foods have nowhere to go but up.

"[It] is a perfect storm. Food prices are going up at precisely the time when people have less money to buy food," said Joel Berg of the New York City Coalition Against Hunger, who predicted that rising prices will drive more New Yorkers to food pantries and soup kitchens.

- Gasoline prices are soaring as New Yorkers struggle to pay higher bus and subway fares. Gas costs an average $3.46 for a gallon of regular in the city, up from $2.91 a year ago, AAA New York says.

"I can see gas going to $4 a gallon," said Dino Lombardi, 44, an accountant who often buys gas at the Hell's Kitchen Hess station, where it's $3.49 a gallon.

- Cotton futures have risen 44% since Jan. 1, so clothing is getting more expensive. Underwear maker Hanesbrands warned it will mark up prices throughout the year - and for some products, every three months.

Food costs are up. Clothing costs are up. Transportation costs are up. Energy costs are up. Gas prices are up.

You know what's not up?

People's wages.

Meanwhile Little Andy Cuomo insists on making cuts to programs that help working and middle class people so that he can keep taxes on rich people low and Barack "Where Are The Goldman Sachs Campaign Contributions" Obama partners with the corporate whores in both the Republican and Democratic Parties to slash food stamp programs and raise taxes on families making less than $40,000 a year while extending the Bush tax cuts for wealthy people.

I just hope when this inflation hits - and make no mistake, it will - the right people get blamed.

Obama renominated Bernanke to the Federal Reserve. Bernanke has whirled up his helicopter and pursued a monetary policy that consists of showering the banksters with free money so that they can do their evil deeds, speculating on commodities and causing food and energy prices to soar.

Both men belong in jail.

When prices soar, I suspect the demagogues in the country will try and turn the blame for this inflation to unions and public employees, just as they have tried to blame the financial fallout of the Wall Street and bankster-created financial collapse of 2007-2008 on public employees and unions.

But this will squarely be the fault of Obama and the Obama administration, Bernanke and the Federal Reserve, and the Wall Street and hedge fund criminal class.

It will behoove those of us about to be tarred with this mess to get even louder about pointing this out.

Obama caused this mess.

Bernanke caused this mess.

Wall Street caused this mess.

The banksters caused this mess.

These people belong in jail.

Why aren't they in jail?

Obama, Bernanke Inflate Commodity Bubble

Obama renominated Bernanke, Bernanke has been running the Federal Reserve printing presses night and day to bail out insolvent banks, that newly printed money is being used to speculate on commodity prices - especially food.

See here.

More change we can believe in?

Nope - same old shit as usual.

Remember the tech and real estate bubbles?

They didn't end so well.

And bet your bottom, inflated dollar that this one won't end so well either.

Unless your a bankster or hedge fund criminal like Whitney Tilson, of course.

Ron Paul Worries Wall Street

Via Political Wire, here is Bloomberg Businessweek on the rise of Ron Paul, the incoming chairman of the House Financial Services Comittee:

It may have taken 34 years, but Ron Paul has arrived, and he doesn't plan to squander the moment. His agenda includes landing the chairmanship of the House Financial Services Committee panel that oversees monetary policy—a job that will give him the power to push legislation reining in the central bank and to haul Fed governors up to Capitol Hill for hearings.

The prospect has Wall Street, Fed officials, and even Republican House leaders worried that Paul's agenda could roil the markets and make a mockery of the U.S. financial system. This is a man, after all, who entered politics because President Richard Nixon bucked the gold standard in 1971, and now wants to make gold and silver legal tender. He is pressing for an audit of the Fort Knox bullion depository and, earlier this year, grilled Fed Chairman Ben Bernanke about the central bank's alleged funding of Watergate and Saddam Hussein's nuclear program. Bernanke called the charges "absolutely bizarre."

Although his book ploy was couched in humor, Gregg laid plain a new Washington reality: Moderate, probusiness lawmakers like him, who consistently protected the central bank's independence and ability to set monetary policy, are mostly gone. In their place are politicians who view the Fed with suspicion, or worse. Their unofficial leader is Paul, the 75-year-old Texan whose quixotic 2008 Presidential run on the twin themes of ending the federal income tax and abolishing the Fed vaulted him to prominence with the nascent Tea Party. Some of those admirers are among the 75-plus new Republicans about to join Congress. For the first time since he was elected to the House in 1976, Paul's followers are formidable.

...

Officials at several major banks have privately raised concerns with Republican leaders that, by allowing Paul to become a chairman, his radical views would gain legitimacy, according to three bank lobbyists. Others are watching with great interest. "Congressman Paul has his own very strong views on things, and you've got to respect that," says Steve Verdier, a lobbyist for the Independent Community Bankers of America, which represents smaller lenders and has fought efforts to weaken the central bank. "I think there is a strong consensus in the country to maintain the independence of the Fed," he adds.

If he gets the subcommittee gavel, Paul says he plans a thorough review of Fed policy. Fear of inflation is what motivates him the most. Next to the doorway in his Washington office are six framed German bank notes dating from the 1920s hyperinflation era. The notes are sequentially dated "to show how quickly the zeroes were added onto the bills" as inflation skyrocketed, Paul says. The notes are arranged around a quote by one of Paul's favorite Austrian School economists, the late Hans F. Sennholz, who Paul once met and calls "a tremendous influence on me." Paul is a devotee of the Austrian School, which teaches that manipulating money supply and interest rates are responsible for history's boom-and-bust cycles. "The Fed creates all of the bubbles and they create the inevitable bursting of all of the bubbles," says Paul.

He believes his oversight role is long overdue. "There has been a politically cozy relationship between Congress and the Federal Reserve," he says. That includes past efforts to keep him from heading the subcommittee. "Republican leadership, with the Fed's influence, has been working to keep me away from this for a long time. That's not going to happen this time."

Don't be surprised if something happens and Ron Paul does NOT get the chairmanship of the House Financial Services Committee.

Because anything that scares Wall Street scares corporate Repubs and Dems both.

And when corporate Repubs and Dems want to take care of their corporate masters, they do it.

I'm hoping Ron Paul gets this chairmanship.

The Bernanke testimony visits and the audit of the Federal Reserve Paul wants to conduct will be priceless pieces of theater, but also important pushback against the pre-eminince of the banksters.

Federal Reserve Wants To Make Foreclosures Easier For Banks

Gee, this sounds fabulous - for the banksters:

WASHINGTON — As Americans continue to lose their homes in record numbers, the Federal Reserve is considering making it much harder for homeowners to stop foreclosures and escape predatory home loans with onerous terms.

The Fed's proposal to amend a 42-year-old provision of the federal Truth in Lending Act has angered labor, civil rights and consumer advocacy groups along with a slew of foreclosure defense attorneys.

They're not only asking the Fed to withdraw the proposal, they also want any future changes to the law to be handled by the new Consumer Financial Protection Bureau, which begins its work next year.

In a letter to the Fed's Board of Governors, dozens of groups that oppose the measure, including the National Consumer Law Center, the NAACP and the Service Employees International Union, say the proposal is bad medicine at the wrong time.

...

Since 1968, the Truth in Lending Act has given homeowners the right to cancel, or rescind illegal loans for up to three years after the transaction was completed if the buyer wasn't provided with proper disclosures at the time of closing.

Attorneys at AARP have used the rescission clause for decades to protect older homeowners stuck in predatory loans with costly terms. The provision is also helping struggling homeowners to fight a wave of foreclosure cases in which faulty and sometimes-fraudulent disclosures were used.

...

Critics say the proposed change by the Fed would render the rescission clause useless. The Fed proposal would require homeowners who seek a loan rescission through the courts, to pay off the entire loan balance before the lender cancels the lien.

"This, of course, would be almost impossible for most consumers to do because they can't come up with the money until they get out of the loan. And they can't get out of the loan until the lien is released," said Barry Zigas, director of housing and credit policy at the Consumer Federation of America. "None of us are quite sure what purpose is being served by this proposal or what prompted it."

It's a bankster nation - we just slave in it.

Let me remind everybody that the Change We Can Believe In president was the guy who renominated Ben Bernanke to the Fed.

Heckuva job, Barack!

Woman Who Questioned Obama On Jobs At Forum Laid Off From Her Job

How ironic - the woman who offered some accountability to President Accountability at a CNBC forum back in October was laid off from her job:

Velma Hart, who burst onto the media scene after telling President Obama she was scared about her financial future, has been laid off. Hart was let go as the chief financial officer for Am Vets, a nonprofit Maryland-based veteran services organization.

Hart has become another casualty of the tough economy in which so many people have lost their jobs.

"It's not anything she did," said Jim King, the national executive director of Am Vets. "She got bit by the same snake that has bit a lot of people. It was a move to cut our bottom line. Most not-for-profits are seeing their money pinched." ...

Hart's comments to Obama became political fodder as proof that the president was losing his die-hard supporters - African American voters. Hart told me at the time that she still supported Obama but that she had expected more changes by now.

I dunno - I think there have been plenty of changes since President Accountability took office.

He renamed the federal bank bailout TALF (it had been named TARP under Bush.)

He renominated Ben Bernanke to the Federal Reserve instead of picking somebody who didn't, you know, help bring about the financial collapse of 2008.

He pulled troops out of Iraq and put them into Afghanistan.

He created a federal education policy that promotes testing in ALL subjects at ALL levels, not just in math and ELA as used to be done under the Bush policy.

He took unemployment from 7% and brought it to 9.6%.

And of course now he wants to raise the retirement age for Social Security to 69.

Come on, Velma, that's plenty enough change for me.

Frankly, I don't think the country can take any more of the kind of changes Obama brings with him.

Fed Drops Money From The Sky

No wonder the interest rate on my savings account went down over the weekend.

They were anticipating Helicopter Ben flying into action:

WASHINGTON — The Federal Reserve, getting ahead of the battles that will dominate national politics over the next two years, moved Wednesday to jolt the economy into recovery with a bold but risky plan to pump $600 billion into the banking system.

...

The action was the second time in a year that the Fed had ventured into new territory as it struggles to push down long-term interest rates to encourage borrowing and economic growth. In a statement, the Fed said it was acting because the recovery was “disappointingly slow,” and it left the door open to even more purchases of government securities next year.

Current policy is brutal on people trying to save some money.

Here's how Firedoglake put it:

Who gets hurt? Savers, the people who husbanded their income during the long boom period, putting money away for retirement. Who gets helped? Wall Street traders and banks, and anyone who bet that they would be the groups targeted for protection by the US government.

Great - Wall Street banksters and traders make out once again, while people trying to do the right thing and save a little get hurt.

More change we can believe in.

Remember, Obama RENOMINATED Mr. Bernanke to the Federal Reserve.

The Fed Vows To Print More Money

Oh, goodie - more free money for the banksters:

WASHINGTON — The Federal Reserve acknowledged on Tuesday that its confidence in the economic recovery had dimmed, and announced that it would use the proceeds from its huge mortgage-bond portfolio to buy long-term Treasury securities.

Saying it would buy relatively modest amounts of government debt, analysts said the Fed signaled that it had no intention to back away from steps that it took, starting in 2007, to prop up the financial and housing markets. While the central bank held off on taking more aggressive steps, like a new, huge round of asset purchases, it left open the possibility that additional easing of monetary policy could take place in the fall if the recovery were to continue to weaken.

The Fed’s new stance marked the completion of a turnabout from a few months ago, when officials were discussing when and how to eventually raise interest rates and gradually shrink the $2.3 trillion balance sheet the Fed amassed through its response to the 2008 financial crisis.

In buying new Treasury securities to the tune of about $10 billion a month — a small fraction of the roughly $700 billion in Treasury debt sitting on the Fed’s balance sheet — the Fed will not let the balance sheet shrink for the time being.

More than anything, the announcement was a signal to the markets that the Fed was concerned about the pace of the recovery, and had shifted from its more optimistic assessment earlier this year, that economic growth was sufficiently strong to begin thinking about how to gradually return to normal monetary policy.

It would be nice if the Uncle Ben and the rest of his merry men and women gave a shit about, you know, jobs.

Actually it would be nice if President Accountability gave a shit about the same thing.

But so long as the banksters are happy, Uncle Ben and the FOMC are happy.

And so long as the ed deform movement is happy and Uncle Arme has $4.3 billion in walking around money to fire teachers, close schools and hire all sorts of people who don't know the first thing about education or school turnaround, President Accountability is happy.

And really, other than those things, what else matters?

Accountability Check

Via Cunning Realist, here is a snapshot TODAY IN ECONOMIC HISTORY:

"The impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained."

-Ben Bernanke in congressional testimony, 3/28/07


Gee, how'd that work out?

From what I recall, not well.

Was Mr. Bernanke held accountable for his horrific inability to see the catastrophe he and the boys and girls on the Federal Reserve Open Market Committee helped create by enabling the worst excesses of Wall Street?

Nope - President Accountability renominated him to the Fed.

Heckuva job, Barack!!!!

It's Only Teachers Who Are Accountable

The financial system nearly collapsed last year because people in the financial industry at "Too Big To Fail" institutions like AIG, Citigroup, Bank of America, Goldman Sachs and others took too much risk and needed to be bailed out by hundreds of billions of taxpayer dollars.

Many of those same people are being rewarded with seven and eight figure bonuses this year.

The financial policy makers who helped create this mess - like Ben Bernanke who voted yes on every Greenspan "moral hazard" policy decision and who has been printing money hand over fist to give to the "Too Big To Fail" institutions and Treasury Timmeh Geithner who oversaw the AIG bailout wherein he handed AIG counterparties 100 cents to the dollar on money owed to them for toxic assets they themselves had bought that were worth at best 20 cents and who asked one of those counterparties, Goldman Sachs, to keep this deal secret from the investigators at the SEC - continue to cheerfully make financial policy.

In fact, Obama renominated Bernanke for another four years and the administration said last week that Geithner has the full confidence of the president.

On December 25, 2009, a Nigerian man set his penis on fire trying to blow up a plane over Detroit. The man's father had warned the State Department that he had become radicalized and was a danger to the United States. In addition, the CIA knew he visited radical elements in Yemen and was a danger to the United States. Nonetheless the man bought a one way ticket with cash and bordered a plane in Nigeria without any luggage and flew to the United States with a visa that said he was coming for a "religious ceremony" (a jihadi euphemism for martyrdom.) The attack was only averted because passengers on the plane noticed his crotch was on fire and held him down until the plane landed.

Two days after the incident, Director of Homeland Security Janet Napolitano said "The system worked..." when talking about the incident. Widely ridiculed for that statement, the administration forced her to walk that back the next day when she said "The system actually didn't work..." and Obama himself said there had been systemic failures throughout the intelligence apparatus that kept the Feds from stopping this man before he got on the plane to Detroit.

Nonetheless, Obama said he was not going to be part of a blame game and point fingers at anybody, so nobody was fired, nobody was held accountable for any of this.

Essentially Obama said "Mistakes were made" and left it that.

Now compare the way Obama has treated the "Too Big To Fail" institutions, the people at those institutions who are pulling in seven and eight figure bonuses for 2009, the policymakers who helped create the mess and the people in his government who missed the very obvious signs of a incoming terrorist attack and then afterward brushed aside criticism by saying "The system worked..." with the way he treats teachers and schools that he considers "failing."

You work in a school that used to be a "good school" but had hundreds of ELL's, support service students and other at-risk students dropped on it in the last few years from other schools that were closed, but have received no extra resources to handle the new students - too bad, Obama says your school needs to be closed down, the teachers need to be fired and a non-unionized charter should be opened in its place. Remember, it's only the test scores that matter.

You work in a school that has few resources, an overpopulated building, overcrowded classrooms, and bathrooms being used to hold math classes in because a charter school has been placed on the first and second floors of your building - too bad, Obama says your school needs to be closed down, the teachers need to be fired and a non-unionized charter should be opened in its place. Remember, it's only the test scores that matter.

You're teaching students who come from impoverished families with generations of dysfunctional behavior, mental illness, alcoholism and other addictions, students themselves who are in great emotional pain and act out that pain through angry outbursts in school or by simply never coming to class and you don't have any way to reach them - too bad, it's your fault they're that way and Obama says you're school needs to be closed down, the teachers need to be fired and a non-unionized charter should be opened in its place. Remember, it's only the test scores that matter.

In Obama's America, like in Bush's America, nobody is accountable for anything except for the teachers and the public education system.

Everybody else, including the president who gave himself a B+ for his first year in office (record deficit, 10% unemployment, hundreds of billions in giveaways to the "Too Big To Fail" firms, no major legislation passed, health care reform turned into major giveaway for the health insurance industry, reneged promises on Card Check legislation and DaDT) gets a pass, a "Heckuva job, Janet" pat on the back, or an eight figure bonus for taking the economic system to the point of collpase and needing billions in bailout dollars and continued access to Federal Reserve 0% interest-free loans to survive.

I cannot wait to hold President Accountability accountable come November 2010 and November 2012.

It's time everybody hold President Accountability accountable for not holding all these other crooks and incompetents accountable.

Plunge Protection Team

I'm a huge fan of CNBC's morning show.

Watch it nearly every morning.

What I have learned from watching that show in the last half year is that everything is fine and dandy with the stock market.

And if the market's up, well, then all is well with the state of the nation.

And since last March, the markets have been going up.

So all must be well with the economy and the nation , right?

Maybe.

Or maybe someone's funking with the numbers:

WASHINGTON (MarketWatch) -- The massive stock-market rally in the past nine months is mostly due to secret government buying of stock-index futures, a respected stock-market analyst said Tuesday.

Charles Biderman, chief executive of TrimTabs Investment Research, is the latest and most credible person to charge that the Federal Reserve and the Treasury (in league with top Wall Street firms) is rigging the stock market on a daily basis.

In a special report released Tuesday, Biderman said the $6 trillion increase in U.S. stock-market capitalization since March can't be explained by the usual sources of funds flowing into the market -- such as mutual funds, direct retail investment, pension funds, hedge funds or foreign purchases.

The only logical explanation for the extent of the rally, he suggested, is secret buying by a government committee known colloquially as the Plunge Protection Team. It's like the dark matter that astrophysicists conjecture must be there, even if we can't detect it.

The PPT was established by President Ronald Reagan in 1988 after the 1987 stock crash to coordinate the government's response to market meltdowns. It consists of the Fed chairman, the Treasury secretary, the head of the Securities and Exchange Commission and the head of the Commodity Futures Trading Commission.

Biderman acknowledged that he had no direct evidence that the Fed and other agencies have intervened in the stock market. But he worried about what will happen to the market if the PPT has been buying and suddenly stops.

Now maybe the government is doing nothing wrong and maybe they're disclosing all the Treasurys, agency bonds and mortgage-backed securities they've been buying in the fixed income markets.

Or maybe they're printing money at night and buying stock futures in the morning and hiding it from view.

Hard to know since there is no transparency at the Federal Reserve (which is the way Fed chief Ben Bernanke and Bernanke's boss, President Obushma, want it.)

But until the Fed proves differently, I'd lean toward the government buying up a bunch of Treasurys, bonds and securities with freshly minted greenbacks.

Remember, the people who caused last year's near financial collapse are still the ones running the show at the Fed and the Treasury Department.

Lots of good reasons why they'd be operating the Plunge Protection Team overtime these days.

Of course they can put all this tin foil hat stuff to rest by submitting to an audit of the Federal reserve the way Ron Paul and lots of others in Congress want.

Talk About Passing The Buck

Ben Bernanke said in a speech over the weekend that low interest rates didn't cause the housing bubble.

Instead he said lack of regulation caused it.

Uh, huh.

As a voting member of the Federal Reserve, Bernanke rubber-stamped ever Alan Greenspan move on money policy. That includes really cheap rates. Now it is true that a slew of financial innovations in mortgages allowing people to borrow money with little to no principle, to lie about their income and never get called on it, or to buy a house with mortgages payments that only pay interest helped bring about the bubble.

But so did really, really low rates. ARM's don't happen when interest rates are high.

Boy, it's a good thing President Obama has reappointed Ben Bernanke to the Federal Reserve for another term.

I mean, who doesn't want a guy who can't take responsibility for his own mistakes in charge of monetary policy for the U.S.

Silly me - accountability is for teachers, not Federal Reserve Open Market Committee members.