“FEDspeak” – The Never-Ending Saga of Double-talk and Distraction

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“The measure of a man is what he does with power” – Plato

America’s political class is famous for having said some remarkably silly things over the years.

No argument there.

In today’s world, anyone letting slip the wrong word or an unpopular opinion can most assuredly count on being “called out” and attacked by social media critics until the mob tires of them and moves on to the next perceived injustice.  

Once upon a time however, in a world before social media tweets, Instagram posts and DMs going viral, the duty and responsibility of holding others to account fell exclusively on the shoulders of the program host.  

People like CNBC’s “Mad Money” personality, Jim Cramer.

For those unfamiliar with Jim, he made a name for himself in one such public shaming back in August of 2007 when, during an otherwise routine, end of day chat segment with fellow commentator Erin Burnett turned into the now famous diatribe where he accused Federal Reserve Bank officials of being clueless and “knowing nothing” about what was really going on with the economy.

In the segment, Cramer opened fire on the FED’s top brass, calling out at least two by name while warning the economy was so far off-course there existed the potential for some rather significant problems unless policymakers took immediate and effective action.

The Rant Heard ‘Round the World’

While many observers, including a few Federal Reserve officials, found Jim’s theatrics both amusing and entertaining, ultimately, it was Cramer who had the last laugh when the economy, just as he had predicted, started falling off a cliff a year later.

Here, in the video, you’ll see a man quite obviously frustrated — perhaps the kind of frustration that comes only after years of watching unelected bureaucrats entrusted with inordinate amounts of power remain oblivious to circumstances and events taking place all around them.

Cramer was clearly perplexed as Ben Bernanke, then Chairman of the Federal Reserve, dismissed repeated calls for easing and instead chose to push rates higher in what was seen by many on Wall Street as a truly fragile market growing weaker by the minute.

You may also recall Chairman Bernanke having made a series of questionable pronouncements in the years leading up to the crash of 2008 — leaving many to wonder how anyone so well-connected could have been so wrong on matters so important to so many.

Here are some of Mr. Bernanke’s more dubious remarks:

Feb. 15, 2007 — “Despite the ongoing adjustments in the housing sector, overall economic prospects for households remain good. Household finances appear generally solid, and delinquency rates on most types of consumer loans and residential mortgages remain low.”

March 28, 2007 — “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”  

May 17, 2007 — “All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system. The vast majority of mortgages, including even subprime mortgages, continue to perform well. Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.”

Jan. 10, 2008 — “The Federal Reserve is not currently forecasting a recession.”

Jan. 18, 2008 —”They will make it through the storm….” (This comment was made just two months before Fannie Mae and Freddie Mac completely collapsed and had to be nationalized)

June 9, 2008 — “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”

Pretty unbelievable, right?

Mr. Bernanke’s completely absurd, illogical statements would suggest a rather significant disconnect between himself and the real world, the kind of thing you might expect find on the reality scale somewhere between arrogance and outright incompetence.

After all, the “substantial downturn” he so casually dismissed did in fact begin to unfold within months, and no one here need be reminded of the economic pain, chaos, and widespread panic that followed in the wake of his wildly off-target remarks.

But indifference is not a crime, and to be sure, Mr. Bernanke is not the first person in a position of prestige and power guilty of making ridiculous and otherwise nonsensical comments.

I’m Nominating Cramer for FED Chairman

More recently, on June 27, 2017, the outgoing FED Chair Janet Yellen, shared some thoughts that made a few jaws drop when she revealed to a London audience that she does not believe there will be another banking crisis for at least as long as she lives.

Her words, according to Reuters:

    “Would I say there will never, ever be another financial crisis? You know probably that would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes, and I don’t believe it will be.”

Now, I can assure readers this is not a misprint, and after seeing this you might get the idea Janet’s grasp on reality is on the same level as Mr. Bernanke’s.

This, in my opinion, would have to be one of the most ridiculous things she or any other member of officialdom could ever say, especially for the soon-to-be retired head of the Federal Reserve Bank.

Of course, the question remains whether her remarks, made during Ms. Yellen’s farewell world tour, turn out to be wise and prescient or end up falling as wide of the mark as so many of Mr. Bernanke’s ramblings.

For that we’ll have to wait and see, but perhaps this, like so many other prognostications from highly positioned bureaucrats, might best be taken with a few (or many) large, oversized grains of salt.

Another Vote for Cramer

Since being confirmed by the senate and sworn-in last month, new Chairman of the Federal Reserve Jerome “Jay” Powell, Yellen’s successor, is off to a dubious start having already made a few highly questionable statements of his own.  

So far, Jay’s on the record stating he’s pleased with the current state of the economy, going as far as to say that it’s “substantially more resilient” than it was before the 2008 crisis, adding he believes the most important thing he can do in his new position is remain vigilant, and ever on the lookout for “excesses” in the economy.  

Now, does that sound like the voice of reason to you, or just another heaping helping of more FED-speak silliness?

Clearly, with respect to the subject of resilience there already exists a worrisome number of economic statistics, so many in fact they can easily be found in any direction one dares to look.

For instance, the global debt burden has grown by at least 60 trillion dollars since the financial crisis of 2008, which some might consider both a truly shocking and excessive number, while here in the U.S. the national debt has exploded more than 120% while in the same period GDP has increased by only about 35%.

Furthermore, the Congressional Budget Office (CBO) estimates the amount of debt is expanding at about 6% annually — making the ballooning debt and the government’s continued reliance on borrowing the fastest growing segment of the economy.

These metrics, along with a host of other financial and monetary indicators would suggest if Mr. Powell were genuinely interested in identifying dangerous economic excesses, he’d have to be lost in the dark while blindfolded not to clearly see at least a few of them.

All in favor of Cramer say ”Yea”

We’ve all heard the adage, “to a hammer, everything looks like a nail”.

That said, I find it troubling the same failing economic conditions Cramer saw as a massive, Mt. Everest sized problem was seen by FED officials as little more than a bump in the road — a pothole-sized nuisance they’d have to get around to addressing eventually.

Of course, anyone as astute a FED-watcher as Mr. Cramer would have known what to expect from Ben & Co almost nothing — hence, I believe, the reason for his rather vociferous, on-air calling out.  

He’s also well-aware of the Federal Reserve’s rather dismal record of forecasting the direction of markets and the economy, which is something, after all, they kinda, sorta, are supposed to know something about.

So, for the new chairman to now kick-off his tenure echoing the same silly, meaningless drivel we’ve been hearing for decades should be seen clearly for what it is — another government bureaucracy trying to keep you in the dark and another big obstacle to your retirement progress and security.

His comments should serve to remind us that it’s all just smoke and mirrors… it’s all a bunch of political satire… more false promises… so why not stop relying on those who choose to rule over us and start thinking for ourselves?


Washington D.C. has become a giant, “no-fly zone” when it comes to integrity, where honest, hard-working professionals interested in helping move the country forward need not apply.

Consider this: what if instead of all the happy talk we heard from Bernanke there had been an alternate figure — someone steadfast and trustworthy who clearly spelled out the enormous imbalances in the banking sector and how both Fannie and Freddie were grossly overextended and on the fast-track to insolvency — what do you suppose the impact that level of transparency would have had on the stock market? 

Likely, a massive financial sector selloff, followed by lots of questions in Senate subcommittee hearings, and possibly even a fair number of Americans snapping out of the trance cast upon them by the easy-money advocates and policy manipulators.

But no one in government wanted that so instead, we got more FED-speak.

Winston Churchill paid the U.S. an offhanded compliment when he said, “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.”

Do you believe you have the patience, or more importantly, will your retirement last for as long as it takes Washington to come to its senses?

If you knew the stock market was going to crash in 24 hours and you would have to endure the loss of half (or more) of your savings for a decade or two (like in Japan), what would you do?

Don’t wait until tomorrow, next week, next month, or next year to get started.

The best time to start building a safe, reliable, and dependable retirement plan for you and yours is right now, today.

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