Bernanke Says Full Speed Ahead with QE2

At the Sixth European Central Bank Central Banking Conference in Frankfurt, Germany, Federal Reserve Chairman Ben Bernanke, in ever-polite central bankese, told QE2 critics to go fly a kite.

November 22, 2010
By Dees Stribling, Contributing Editor

The Fed’s decision to go ahead with QE2 has been the subject of much international bellyaching recently, with countries such as China and Germany complaining particularly loudly, for their own reasons. At the Sixth European Central Bank Central Banking Conference in Frankfurt, Germany, Federal Reserve Chairman Ben Bernanke, in ever-polite central bankese, told QE2 critics to go fly a kite. Also, he said that calling it “quantitative easing” was “inappropriate,” but didn’t offer a catchier abbreviation.

“The FOMC announced earlier this month its intention to purchase an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month,” the chairman noted in one of his two speeches that day. “Financial conditions eased notably in anticipation of the committee’s announcement, suggesting that this policy will be effective in promoting recovery.”

More pointedly–remarkably pointed, for a Fed chairman–Bernanke also took QE2 critics (that means you, China) to task for their own macroeconomic manipulations, especially those involving currency exchange rates. “… Currency undervaluation on the part of some countries has been part of a long-term export-led strategy for growth and development,” he said. “However, increasingly over time, the strategy of currency undervaluation has demonstrated important drawbacks, both for the world system and for the countries using that strategy.”

Cook County Sheriff to Resume Foreclosure Evictions, Reluctantly

Cook County Sheriff Thomas J. Dart, whose department made news when it quit enforcing foreclosure evictions in the county on Oct. 13 because of the budding foreclosure fiasco, has been told by way of a Cook County State’s Attorney’s Office legal opinion to get on with them, when the foreclosures are signed by a judge. After a review of documents and available staff, foreclosure evictions will be added to department deputies’ schedules and could resume as early as next week, according to Dart.

But the process won’t be quite the same as it used to be. Loyola University School of Law has agreed to work with Dart’s office to comb through the 2,200 awaiting foreclosure eviction orders signed by Cook County judges. The law school’s students and staff will be looking through the case files for any signs of irregularities. Any irregular foreclosures will then be forwarded to sheriff’s staff for further review and possible referral to financial crimes investigators.

Dart said on Friday that there seem to be irregularities aplenty, namely that some foreclosures were “horribly deficient” in documentation, sporting “clear evidence” of robo-signing. The sheriff also said that his office will provide homeowners facing foreclosure contact information for free legal assistance.

EU Bails Out the Next Euro-Zone Domino, Ireland

Over the weekend, Ireland accepted a bailout–that is, was forced to accept a bailout that’s more euphemistically called a “financial rescue package–from the EU and the IMF after a week or so of hemming and hawing on the part of the Irish government. The exact terms are still being hashed out by Irish and EU nabobs, but the Irish finance minister reportedly said the amount would be less than 100 billion euros ($136 billion). Other estimates put the total at 70 billion euros or so.

By contrast, Greece received about 110 billion euros in the spring as the result of the mini-panic involving Greek debt and riots (mini compared with the Panic of 2008, that is). The jury is still out on the effectiveness of that intervention, but at least the mini-panic is over, and this time around the prospect of a broke Ireland doesn’t seem to be inspiring the same kind of consternation. In any case, the dosh will go toward stabilizing Eire’s tottering banking system.

Wall Street struggled mightily to achieve positive territory on Friday, and in the end made it, but barely. The Dow Jones Industrial Average was up 22.32 points, or 0.2 percent, while the S&P 500 gained 0.25 percent and the Nasdaq advanced 0.15 percent.