It looks obvious

“Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending.”

The former chairman of the organization that many people hope will assume more responsibilities of oversight over the financial markets.

Federal Reserve Chairman Ben Bernanke quest for more power to centrally control the market make sense because the Federal Reserve is such a phenomenal success. Like any bureaucrat, Bernanke is seeking to increase its organization, despite evidences that might suggest the opposite approach. What makes this worse is that we are being requested to hand more authorities, backed by the coercion power of the state to an organization that is not controlled by the state (and claiming that it is not for profit is euphemism for great power and profit to its board members….):

Congress should consider giving the Fed power to set standards for capital liquidity holdings and risk management for investment banks, as it now does for commercial banks, Bernanke said. Already, the Fed has offered to be the lender of last resort for the investment banks.

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“This is the first time I ever recall the Fed coming out and arguing that it needs to have expanded oversight and responsibilities,” said former Fed official Robert Eisenbeis in comments to Bloomberg television.

I thought that the new chairman can’t be worse than Greenspan, who sold his soul in exchange of power , but apparently Bernanke proves me wrong.

Is the inflation, and the declining dollar, under control? The credit crisis is not a problem anymore? or the fact that the American taxpayers are going to bailout banks that waisted their investors money irresponsibly is such an achievement that the chairman of the Fed can expend to other areas?

Bolstering the performance of the U.S. health care system is one of the biggest challenges facing the country, Federal Reserve Chairman Ben Bernanke said Monday.

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Challenges, he said, fall into three major areas: improving access to health care for the 47 million Americans — or about 16 percent of the population — who lack health insurance; bolstering the quality of care; and controlling costs.

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The Fed chief didn’t talk about the Fed’s next move on interest rates or the state of the U.S. economy in his speech or during a brief question and answer session afterward.

Or maybe, just maybe, the honorable chairman should stick to what he responsible too. It is damaging enough as it is, so any expansion will be unwelcome.

I grew up during hyperinflation, if I remember it correctly it got to around 800% when I was 18. It was devastating time. My father had a small, constantly straggling, business and I remember how He and My Mother rushed to the grocery store every time he got paid to use the money before it become worthless. I remember how many stores start posting the price in foreign currency (mostly dollars, they were not as worthless as they are now). When the government tried to control the exchange rate artificially everyone start using the black market rate , which was published daily on the front page of all the major newspapers. So when I read about the growing concern of inflation - due to the expenses of the war and the constant printing of money, is frightening. Not that any one forecasting hyperinflation here any time soon, but even a more moderate inflation tend to hit the middle class badly.

But this kind of pictures, from a country that used to export meet to the rest of Africa, should be a warning sign for anyone who take the dangers of inflation lightly.

My position on the bear-streans bailout was, and still is, that it was simple case of robbery. Having the taxpayers fund, directly and indirectly, welfare programs for banks, airlines companies, pharmaceutical companies or any other corporation doesn’t change the fact that this is improper use of the public trust. The only support a company should seek is the support of trusting investors and satisfied customers.

And the results of corporate welfare and bailout policies aren’t improve economics but rather:

I have very little patient to conspiracy theories, so I will not start a discussion about the possible relations between the fact that the chairman and CEO of JP Morgan is a member of the board of directors of the Federal Reserve and the bailout that made the deal of purchasing Bear Stearns much less risky. The decision is immoral even if it was done without any involvement of JP Morgan:

Presenting this as a necessity, for the public general good and using the fear of recession, doesn’t change the fact that the proper name for this bailout is theft. Few months ago this was a funny sketch, today it is a reality and not the funny kind.

My office is located on Wall Street. I like coming to work early and leave early - so I have more quality time with my family, so I am usually in the office at 6:30 AM.I like walking from the train station early in the morning, watching the city wake up, the streets aren’t yet full of people running and rushing. But today the feeling was completely different. Wall Street was full of cameras and reporters getting ready for the stock exchange opening. It was kind of scary, the quietness before the, unavoidable, storm.
I working here for a while now - I was here when the high-tech bubble burst. I was here at 9-11 and the days after when the streets were covered with dust and smoke. Today scene reminded me the stories about the 1929 crush - the fear on the faces, the worry about the outcome and the knowing that we are facing bad times.
I’m not an economist, but It seems to me rather peculiar that the measures the Fed took today to stop the collapse are the same, or very similar, to the policy that create this crisis to begin with.