AP Writes: Bernanke likens ’08 financial crisis to car crash
WASHINGTON (AP) — In his final public appearance as chairman of the Federal Reserve, Ben Bernanke took a moment to reflect on the 2008 financial crisis and compared it to surviving a bad car crash.
During an interview Thursday at the Brookings Institution, Bernanke recalled some “very intense periods” during the crisis, similar to trying to keep a car from going over a bridge after a collision.
The government had just taken over mortgage giants Fannie Mae and Freddie Mac. Lehman Brothers had collapsed. He recalled some sleepless nights working with others to try and contain the damage.
“If you’re in a car wreck or something, you’re mostly involved in trying to avoid going off the bridge. And then, later on, you say, ‘Oh my God!'” Bernanke said.
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An innocent car crash Mr. Bernanke? Just an accident? I guess that’s one way to look at it. There is another. How about getting so drunk that you drive your car into a pole.
Of course, the above is an analogy for using entirely too much credit to propel our financial system and our underlying economy right after the Tech crash. As we know, that led to the housing bubble, the stock market bubble and the credit market bubble that all blew up in 2007-09. Now, you can’t blame Mr. Bernanke for that. For the most part, another “brilliant economist” under the name of Mr. Greenspan was responsible for the financial collapse we have all suffered during that time.
You can, however, blame Mr. Bernanke for what happened between 2007 and today. It seems like he took Mr. Greenspan’s playbook, squared it and then multiplied it by 100. By pumping a tremendous amount of credit into the system since the market meltdown of 2007-09 Mr. Bernanke upped the ante for any reasonable resolution to our current financial issues.
Make no mistake………..the current stock market, real estate and economic recovery has very little to do with the underlying fundamental economy and everything to do with massive infusion of credit into the financial system by the FED.
It is a speculative illusion at best. When the credit card is finally maxed out, there will be hell to pay. Based on my mathematical work we are just a few short months away from the start of the bear leg. Get yourself ready.
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