IRA Comments on Goldman, Bernanke

So long as Goldman Sachs (NYSE:GS) can issue FDIC-insured debt, they can bluster on about repaying the TARP funds. Nobody in Bubbleland seems to notice that the entire market for repo, loans and anything else outside of corporate debt is basically facing the Fed. Indeed, one reason for our still bearish cast is the lack of anything resembling real action in Washington to restore private market function.

The team of Summers & Bernanke seemingly are embarked upon a strategy of cold storage and public subsidy for the very toxic waste that has the US banking system in a state of paralysis. This studied inaction, this slow motion excuse for doing nothing about the root cause of the financial crisis, is digging a very deep hole for the Federal Reserve System and the US economy, IOHO.

...

As he stated again clearly today, the Chairman of the Federal Reserve has deluded himself into thinking that when the time comes, he will be able to shrink the size of the Fed's balance sheet and reduce the monetary base with both ease and impunity. He also has deluded himself into thinking inflation will be easily contained.

It is very important that he does not fool you as well.