Friday, November 9, 2007

Bernanke's Crime Spree Continues-2

"The Federal Reserve is working with banks to help establish 'true valuations' of securities linked to subprime mortgages, chairman Ben S. Bernanke [BSB] said. ... 'It's very much in the interest of the banks to disclose as much as possible as to write down their losses', [BSB] said in a hearing of the congressional Joint Economic Committee today. ... 'We are working with the banks, the ones who sponsor these off-balance-sheet instruments, to make sure they are getting true valuations,' [BSB] said in response to questions at the hearing today. Banks 'are being aggressive in marking down their assets,' he added", Scott Lanman, at, 9 November.

This post's title is from 26 October's, so look for Bernanke's Crime Spree Continues there. In 1979 I read this joke in Barron's, "How do you know when the chairman of the Fed is lying? Every time he moves his lips". For a guy who got 1590 on the SATs and is a Harvard man, BSB should be able to do better than this. BSB wants to help banks establish "true valuations"? What does that mean? How does be define a "false" valuation? Are BSB's "true valuations" the 21st Century equivalent of the Medieval "just price" or "fair wage"? Will BSB next try to lead into gold? Stay tuned.

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