Bernanke will be in MAJOR political trouble and very likely LEGAL trouble in short order.
I warned earlier that this would be the case as soon as Lloyd Blankfein hired a defense attorney. Do you really think a Wall Street CEO is going to go to jail when he can roll back everything onto the Fed (just as Ken Lewis did)? All Blankfein or any other future Wall Street CEO recipient of a major lawsuit (and there will be much more) has to argue is that the Fed forced them to make an illegal move to save the financial system and the attention turns to the Fed, specifically Bernanke.
We’ve already had a taste of this when Ken Lewis, formerly of Bank of America tried to pin the Merrill/ Countrywide mergers on Bernanke. The ONLY reason Bernake got out of that one was because politically he was still considered the savior of the Financial System. Kicking Bernanke down would have imploded the markets as, at that time, he was the figurehead for the “Fed will backstop the entire financial system” mantra.
That has now changed and Bernanke is now political plutonium. No one, not even Obama, will be backing him up. The big issue for the 2012 election will be the Fed and the economy. And both the politicians and Wall Street will be hanging the albatross of failure and corruption on Bernanke.
You can already see the Fed starting to prepare for this. Note that the Fed is now suing its favorite firm, Goldman Sachs. This move is not without context. Bernanke and pals are aware of the political tide turning in the US. They’re also aware of what’s happening in Greece and Europe. And they’re going to try to pin the blame on Goldman and others.
So what can we deduce from this?
1 comment:
what? no comments? what is deduce? None of this stuff effects us here on the shore.....unless the cost of natural light or Marlboros is gonna go up.
Post a Comment