On that note, Federal Reserve Chairman Ben Bernanke started his college lecture series today. Is he indoctrinating America's college students, trying to initiate them in the cult of support for the Fed? Is he attempting to set the narrative and re-write history? We discuss with Gerald Celente. And today the muppets received a star on the Hollywood Walk of Fame, getting much better treatment than the real life ones get at Goldman Sachs, according to Greg Smith. More Goldman alumni have come forward about the firm's "muppet" treatment. We give you the round up of them as Mayor Bloomberg comes to the firm's defense and weighs in on "God's work."
Federal Reserve Chairman Ben Bernanke began his college lecture series today. He spoke to undergraduate students at George Washington University, becoming the first Fed chairman ever to help teach a college course. Eighty students reportedly applied, writing essays to get in and become indoctrinated in why the Federal Reserve is important. Needless to say, we found a few of Bernanke's lessons questionable. He talked about the Fed being a lender of last resort, lending freely against good assets at a penalty rate to discourage excessive use. However, since the financial crisis in 2008 it seems the Fed has done anything but lend against good collateral. Traditionally, the Fed has accepted only the highest quality collateral in return for a loan. The prime example is US Treasuries. During the 2008 crisis, however, the Fed was willing to accept any dubious piece of highly overvalued paper, paper that was deemed "illiquid" or "toxic" by the rest of the banking system. This includes CDOs, full of things like commercial and residential real estate loans, credit card loans, auto loans, and student loans. The Fed has also offered trillions of dollars in low-interest emergency loans that were not disclosed by the central bank until last year, to keep banks such as Bank of America afloat.
Meanwhile, MF Global's European administrator KPMG expects ligitgation to delay pay-outs to clients after the landmark ruling in the bankruptcy of Lehman Brothers. In this ruling Britain's Supreme Court said Lehman clients whose cash the US investment bank had mixed with its own have the same rights as clients whose cash was segregated. This effectively means if you have your money in a segregated account you have the same right as if you didn't and it could also mean a lower payout for MF Global customers with segregated accounts. Trends Forecaster Gerald Celente said on our show last Fall, his money was frozen in a segregated account in the MF Global bankruptcy to the tune of six-figures. In reaction to this court decision, Celente told us: i "I love my money being stolen from me; how do women like getting raped?!" Talking about the power of Goldman Sachs and the connection to the US government, and former MF Global CEO and Goldman Sachs alum Jon Corzine, Celente added, "the merger of state and corporate powers is called fascism and it's right in front of you: Goldman Sachs and the USSA."