Thursday, August 26, 2010

BBI - Bernanke BELIEVABILITY INDEX - the MOST important Economic Indicator at upcoming Jackson Hole Speech

Supplanting capabilities, new policies, programs or arcane authorities - the essential problem is not well founded worries about the markets or concerns about the economy, or even the large stuffed bear outside the Jackson Hole conference room (true) - rather it's - BBI - the Bernanke Believability Index; the ONE common thread running through everyone's concerns and anxieties. Yet no one has stated the obvious and put their finger on it until now!

The BBI (I just made it up) is trending lower, and is near an all time low and for good reason, much the same reasons as at any organization facing a crisis. Think of the recent Toyota recall (sudden unintended acceleration) or one of the first, 1980's Johnson & Johnson (botched Tylenol recall). Poor PR fundamentals, poor communications.

  1. Admit the truth - THE WHOLE UNVARNISHED TRUTH!
  2. Tell us what YOU know, when you knew it or should have known it - all of it!
  3. Name names.
  4. Explain how it happened - including your own shortcomings - UNVARNISHED!
  5. TELL US what you tried that failed and why.
  6. Tell us how your Princeton text book admonishes students to become "Economic Naturalists," to observe and question all around but appears slipped by and STILL evading YOUR attention.
  7. Tell us what we can do to understand and help do our part.
  8. Keep us timely and properly, not selectively informed.
  9. We now know (and or should have known) that you're not a magician; but we do expect and DESERVE NOTHING LESS THAN THE WHOLE TRUTH.
  10. Last - fiduciaries serve voluntarily; at any time you can and should choose to resign - it's OK- we're adults, we can accept it - we'll be that much further along the road of the truth, then Recovery.

Bernanke action / inactions a potential BFD; breach of fiduciary duty.

Bernanke owes a fiduciary duty to the US taxpayer; period. What Bernanke can learn from OLDCAR; the acronym that describes basic fiduciary duty Bernanke OWES to the US Taxpayer, all American citizens' current and future generations.

  • O = Obedience to the Fed Charter, stable prices, stable asset prices (not housing bubbles), full employment. NOT using the Fed's Balance Sheet as a vessel to hold "toxic er excuse me AAA rated assets" YOU gladly exchanged for CASH to certain Banks.
  • L = Loyalty, see below.
  • D = Disclosure, see below
  • C = Confidentiality; to keep client's affairs private, secure but does not apply here.
  • A = Accounting, show us what's ON the Fed's trebled-in-2 years $2T balance sheet and valuations thereon in contrast to the FDIC's recent SSGN 1, 2, 3 (~0.50 cents on the dollar) implied valuations.
  • R = Reasonable Care. Reasonable does not apply here Bernanke is EXPERT. That means EXPERT level Care. Care is defined below.
Meet your basic fiduciary duty to the US Taxpayers and global creditors. In sum, as ultimate, SUPER Trustee of the US Dollar, Currency, Economy and Markets (how's that for a stew of potential conflicts of interest!) this includes:

  1. Disclosure - that means full disclosure; no hiding whatsoever' it's 2010 not 1910! or even 2000!
  2. Skill - use the ALL the skills you have; that includes telling the truth.
  3. Loyalty - the interests of US taxpayers come FIRST; not your agenda, NOT a narrow certain group like the Federal Reserve Bank District east of the Hudson!
  4. Care - Investigate BEFORE taking action or inaction, then continue to perform your "due diligence"
  5. Impartiality - NOT favoring one class of beneficiary over another; in other words not favoring the current generation at the expense of the future.
Unfortunately, due to the Fed's decisions (or the lack thereof) in 2006, 2007, 2008, 2009 and 2010 - we now realize BBI was and IS the MOST important economic indicator.

Helping to address the siesta on the US taxpayers dime - one easy to read blog at a time.

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