#8162 Feb 5, 2008
Economic Insight and Analysis from the Wall Street Journal
February 4, 2008, 2:49 pm
Bernanke to Meet With Dodd Wednesday
Federal Reserve Chairman Ben Bernanke is scheduled to meet privately
Wednesday with Senate Banking Committee Chairman Chris Dodd (D.,
Conn.) on Capitol Hill, two people familiar with the matter said.
Mr. Dodd, who is reasserting himself as Senate chairman since bowing
out of the presidential race several weeks ago, recently held a
similar meeting with Treasury Secretary Henry Paulson.
There are plenty of issues the two could discuss. In addition to the
economic outlook, there are three White House nominations to the Fed
pending before the Senate Banking Committee. They could also discuss
a recent Fed proposal to limit certain mortgage practices, which Mr.
Dodd has criticized for being too weak. .Damian Paletta
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Anyone else concerned Mr.Bernanke is having too many political
It was always my understanding that the Fed should be politically
Looks like another attempts to rig markets with more Big Government
and plunge team protection.
Isn't it ironic that we fought wars in the name of democracy, but our
own government operates like the Soviet Union with their `plan and
Comment by Anonymous - February 4, 2008 at 3:35 pm
no, not concerned.
Comment by dark suit guy - February 4, 2008 at 4:30 pm
We go from one political shell game to another. I'm starting to get
used to it.
Comment by Just more slight of hand of smoke and mirrors - February
4, 2008 at 5:38 pm
The phone rang and it was Ross Perot, who hasn't given an interview
in years. Perot, who won 19 percent of the vote in the 1992
presidential election, making him one of the strongest third-party
candidates in American history, got straight to the point.
"Remember what you wrote about John McCain in the March 13, 2000,
"Sure," I lied.
"When McCain called Perot `nuttier than a fruitcake'?"
The Texas billionaire, now 77, still has some scores to settle from
the Vietnam era, and his timing is exquisite. Just days before the
South Carolina GOP primary, he wants me to know that McCain "is the
classic opportunist.he's always reaching for attention and glory.
Other POWs won't even sit at the same table with him."
Mark Salter, McCain's longtime top aide, says the Arizona senator has
plenty of veteran support and many close friendships among other
The Perot-McCain relationship goes back to McCain's five and a half
years of captivity in Hanoi. When McCain's then-wife Carol was in a
serious car accident, McCain's mother called Perot for help. "She
asked me to send my people to Philadelphia to take care of the
family," Perot says. Afterwards, McCain was grateful. "We loved him
[Perot] for it," McCain told me in 2000.
Perot doesn't remember it that way. "After he came home, he walked
with a limp, she [Carol McCain] walked with a limp. So he threw her
over for a poster girl with big money from Arizona [Cindy McCain, his
current wife] and the rest is history."
Perot's real problem with McCain is that he believes the senator
hushed up evidence that live POWs were left behind in Vietnam and
even transferred to the Soviet Union for human experimentation, a
charge Perot says he heard from a senior Vietnamese official in the
1980s. "There's evidence, evidence, evidence," Perot claims. "McCain
was adamant about shutting down anything to do with recovering POWs."
Comment by perot - February 4, 2008 at 5:50 pm
For the Perot/McCain comment.
What do you expect?
The guys lies just like most (if not all) politicans.
Everyone feels McCain is a straight-shooter.
The lies roll off his tongue, just like Clinton.
Re-read the McCain/Romney interface.
Piss poor, just piss poor.
Comment by Concerned USNA graduate - February 4, 2008 at 6:16 pm
Unless they are meeting to better understand what the consumer is up
against, it's a waste of time. It's time for this government to stand
up and take account of all the madness and get its house in order for
the American people. They are all so far in debt it's not funny
Comment by Anonymous - February 4, 2008 at 7:29 pm
Beware of weekends, the preferred time for banking shenanigans.boxes
locked over the weekend, unaccessible on Monday.
A snippet found on the Internet:
"A source at Bellaciao.com filed the following report, which I have
confirmed from other sources:
`A family member from Irvine, CA (who's a branch manager at Bank of
America) told us two weeks ago that her bank held a workshop where
the last two days were dedicated to discussing their bank's new
security measures. [M]embers from the Homeland Security Office
instructed them on how to field calls from customers and what they
are to tell them in the event of a national disaster. She said they
were told how only agents from Homeland Security (during such an
event) would be in charge of opening safe deposit boxes and
determining what items would be given to bank customers. At this
point they were told that no weapons, cash, gold, or silver will be
allowed to leave the bank . only various paperwork will be given to
its owners. After discussing the matter with them at length, she and
the other employees were then told not to discuss the subject with
`The family member has since given her notice to quit the bank. I
found the news alarming and decided to find out more myself. On a
trip to my bank here in Houston, I remarked to a young bank employee
(who's new there), `Well I guess you've been told all that stuff by
the manager and the Homeland Security about what to tell your
customers' - and to my amazement, the young woman came right out and
said yes she'd been through all that, then whispered to me across the
counter, `but we're not supposed to talk about it - I could lose my
job.'" Lesson to learn: don't depend on getting access to a safety
deposit box. If you must use one, only keep documents in it . no
valuables. Obviously the feds plan on confiscating gold again!"
Comment by bugs - February 4, 2008 at 7:44 pm
Is Bernanke too politically involved? Absolutely! About three mos. I
caught a Bloomberg snippet that mentioned him meeting with Rev. Jesse
Comment by BloggerMaster1 - February 4, 2008 at 8:26 pm
Mr. Dodd did not have a public message that anyone gave a hoot about
but maybe his powerful position will cause Mr. Bernanke will kneel to
the presents of and idiot.
When are these guys and gals that are so meaningless to anything that
has or is going on in our world go home and retire.
Mr. Dodd and the rest of those that command the presents of public
officials but not the public will only leave when the country is in
Mr. Dodd please leave us alone and take Mr. (mouth) Biden with you.
Comment by Unique Insights - February 4, 2008 at 9:52 pm
Sounds like a multiple choice question to me.
(don't mind my black humor. It helps to maintain some sanity amid a
U.S. Troops Asked If They Would Shoot American Citizens
Iraq vet exposes how he was trained to round up Americans in martial
law exercise, asked if he would kill his own friends and family
Paul Joseph Watson
Monday, February 4th, 2008
U.S. troops are being trained to conduct round-ups, confiscate guns
and shoot American citizens, including their own friends and family
members, as part of a long-standing program to prepare for the
declaration of martial law, according to a soldier who recently
returned from Iraq.
We received an e mail from "Scott", a member of a pipefitters union
that runs an apprenticeship program called Helmets To Hard Hats,
which according to its website, "Is a national program that connects
National Guard, Reserve and transitioning active-duty military
members with quality career training and employment opportunities
within the construction industry."
Scott writes that his company hired a soldier who had recently
returned from Iraq, who told him that U.S. troops were being quizzed
on whether or not they would be prepared to shoot their own friends
and family members during a national state of emergency in America.
(Article continues below)
"I have become very close to this young man and have gained his
respect and trust," writes Scott. "I want you to know that he
informed me about one particular training exercise his superiors made
them perform. It was concerning the rounding up of American citizens
that disobey any type of martial law or in other words any type of
infringement on our freedoms."
"He was asked if he could shoot his friends or family members if
ordered to do so. At the time he said he could," writes Scott.
Scott says that the soldier later "had time to clear his head" and
realize the truth, recanting his vow to kill his own countrymen if
ordered to do so.
The issue of whether U.S. troops would be prepared to round-up,
disarm and if necessary shoot Americans who disobeyed orders during a
state of martial law is a question that military chiefs have been
attempting to answer for at least 15 years.
Its known origins can be traced back to an October 1994 Marine
questionnaire out of the Twentynine Palms Marine Base in California.
Recruits were asked 46 questions, including whether they would kill
U.S. citizens who refused to surrender their firearms.
Documentary film maker Alex Jones brought to light similar training
programs that were taking place across the country in the late 90's
which revolved around U.S. Marines being trained to arrest American
citizens and take them to internment camps.
During one such program in Oakland California, dubbed "Operation
Urban Warrior," Marines refused to answer if they would target
American citizens for gun confiscation if ordered to do so.
During hurricane Katrina, National Guard units were ordered to
confiscate guns belonging to New Orleans residents.
As we first exposed in May 2006, Clergy Response Teams are being
trained by the federal government and FEMA to "quell dissent" and
pacify citizens to obey the government in the event of a declaration
of martial law.
Pastors and other religious representatives are being taught to
become secret police enforcers who teach their congregations to "obey
the government" in preparation for the implementation of martial law,
property and firearm seizures, mass vaccination programs and forced
Many scoffed at our original story, which was based on the testimony
of a whistleblower who was asked to participate in the program.
Claims that the story was a conspiracy theory soon evaporated when a
mainstream KSLA news report confirmed the existence of the program.
The experiences of U.S. troops in the worst areas of Iraq, where
soldiers are ordered to go door to door and arrest all men of
military age as well as confiscate their weapons, is a mere portend
of what is being planned for America if these training programs ever
come to fruition.
Comment by GO - February 4, 2008 at 11:12 pm
Maybe Dodd wants to know into which black hole all the non-borrowed
bank reserves have disappeared.
Non-borrowed bank reserves for the two weeks ending Dec. 5th were
$43.8B; same reserves on Jan. 30th were -$8.8B. In other words, banks
are running on fumes: reserves borrowed from the Fed. What's up here?
Comment by johnG - February 4, 2008 at 11:32 pm
Lenders freeze equity lines in response to tumbling property values
By: ZACH FOX - Staff Writer
Countrywide Financial announced this week that it cut off borrowers
Several banks issued statements this week saying they were
temporarily suspending withdrawals from open home equity lines out of
concern that borrowers could owe more than the house is worth.
Historic declines in property values have stripped many local
homeowners of their safety nets as lenders freeze lines of credit .-
even on people who are current on their mortgage payments.
"It's an emotional hardship," said Patti Lien of Menifee. "We kept
our credit good. We've done everything right, and this is what we get
because Countrywide made all these crappy loans."
Home equity lines of credit are loans that use a home as collateral
and allow the borrower to withdraw money up to a maximum credit limit.
Those lines are drying up as Countrywide Financial announced Thursday
that it has cut off 122,000 borrowers from pulling any more equity
out of their homes. Wells Fargo, Washington Mutual and JPMorgan Chase
released statements Friday saying they have also started halting
equity lines because of tumbling home values but declined to provide
numbers of suspended equity lines.
"It really wreaked havoc for me," said Dan Holbrook, a Fallbrook
homeowner. Working in the real estate industry, he is often paid in
At the end of the year, Holbrook paid off his equity line with a
$50,000 payment. Four days later, Bank of America froze his equity
line, he said.
"I'm scrambling right now," he said. "It has created a tremendous
amount of stress because that was money to live on for me."
Unlike Holbrook, Lien said she did not rely on her home equity line
as a source for daily expenses. But she said the loss of her equity
line was nonetheless an upsetting shock because she thought it could
cover unexpected medical expenses or other emergencies.
Lien said she has a 30-year fixed mortgage and has never missed a
Holbrook, a real estate consultant, said most people view such loans
as emergency-only money. That is how he viewed it until the housing
market slowed, he said.
"A lot of people figured these equity lines were safety nets," he
said. "The problem is many of us are on a high-wire act right now.
And you think the net is there, and you fall and it's not."
Banks freeze the equity line to avoid lending more money than the
property is worth because if the house then goes into foreclosure,
the lender is unlikely to recoup the value of the loan.
Mortgage brokers said lenders are especially cautious about property
values on equity lines because they generally act as second
mortgages. When a home goes into foreclosure and sells for less than
the loan amount, the lender on a second can get nothing on the loan
because the original mortgage must be repaid in full first.
"Home equity line lenders are getting their butts kicked these days,"
said Dave Hopkins, a senior loan officer with Rancho Financial
Mortgage, a brokerage firm based in Rancho Bernardo. "So (freezing
equity lines) is helping them quite a bit in reducing their exposure.
It's not good for the borrower, but on the lender side it makes
The banks' reactions follow a 17-month drop in San Diego County home
values, according to a Standard and Poor's report. And many analysts
expect them to continue declining.
Riverside County has also seen falling home values, with some areas
losing almost half their value, said Phillip A. Bellante, owner of
Guardian Mortgage and Realty, a San Diego mortgage broker.
"I can show you areas in Murrieta and Riverside that have gone down
40 percent," he said. "And is it going to go down more? Yeah, it is."
JPMorgan Chase has been focusing on homeowners with loans that are
close to the value of the home, said Tom Kelly, a spokesman for the
lender. He said the lender is primarily concerned with preventing the
borrower from owing more than the home is worth.
A statement released by Wells Fargo said that lender has increased
the frequency of regular case-by-case reviews of homeowners' credit
rating and property value to determine whether a line of equity
should remain open.
When a homeowner signs the contract for a line of equity, lenders
usually include language that allows them to close the line in
response to changing factors.
Lien said she knew of the language, but thought it only applied to
homeowners who encountered credit problems and did not know an
external factor such as declining property values could put a stop to
"It's a hardship. It's money that we thought was there and it's not,"
she said. "We didn't go on a cruise, we didn't buy new cars but we're
still suffering because of others."
Contact staff writer Zach Fox at (951) 676-4315, Ext. 5412, or
Comment by equity lines cut off - February 5, 2008 at 2:00 am
We live in most interesting times!
Comment by Gabriel Russo - February 5, 2008 at 7:41 am
By Jerome R. Corsi
. 2008 WorldNetDaily.com
Consumers should expect a deep recession, triggered by the "stealth
methodology" of the Federal Reserve to "depress" the market even
while lowering interest rates in an ostensible effort to stimulate
economic growth, an economic analyst is charging.
"The Federal Reserve is directly involved in manipulating the stock
market," said economic analyst Mike Bolser in a telephone interview
with WND yesterday.
The New York Stock Exchange finished the day down 108.03 points,
closing at 12,635.16, much as Bolser predicted, despite recent
emergency Fed rate cuts of 1.25 percentage points aimed at
stimulating the economy.
"Fed wants the Dow Jones Industrial Average and other financial
indicators to descend in a managed way," Bolser said. "The Fed wants
to drive the DJIA toward the 8,000 level, or below, in order to help
create a deep recession which will have the effect of slowing
consumption across the board, and dampening the otherwise harmful
effects of inflation.
"A falling DOW is only one element of the recession effects of the
excessive Fed-created housing and credit creation, whose bubbles are
now bursting," he added.
"Without this recession, we would be on quick trip to hyper-
inflation," Bolser, the author of an internationally followed
newsletter published in conjunction with his
In his twice-daily subscription newsletter, Bolser has devised a
quantitative methodology for utilizing Federal Reserve repurchase
agreements to predict upward and downward movements of the DJIA,
measured on a 30-day moving average.
Comment by PREDICT - February 5, 2008 at 9:02 am
Why am I not surprised!
Comment by TTT - February 5, 2008 at 9:16 am
Bloomberg: U.S. service industries unexpectedly shrank in January at
the fastest pace since the last recession as the housing slump
deepened and consumer spending cooled.
The Institute for Supply Management's non-manufacturing index, which
reflects almost 90 percent of the economy, fell to 41.9, the lowest
since October 2001, from 54.4 the prior month, the Tempe, Arizona-
based ISM said. A reading of 50 is the dividing line between growth
Comment by Frank - February 5, 2008 at 9:58 am
Back to the original article.
Bernanke and Club Fed should be independent of political pressures.
However, the markets and media glorify the Fed as some soothsayers
while reporting their testimony (live) to Congress.
These 'secret' meetings are ridiculous.
Mr. Ben should just do his friggin' job and not be a slave to Bush
and his cronies.
Comment by Independence - February 5, 2008 at 10:21 am
Why is anybody surprised the consumer is in serious trouble?
Let BB talk with whomever he likes. He is talking to the same people
who have provided no leadership for America over the last 15 years,
while giving lip service to the changing world economy. They had no
clue then, they have no insight now.
Comment by mmark - February 5, 2008 at 11:14 am