resume Ben Bernanke’s criticsgrow by the day. What hasBernanke done to generatethis criticism, what exactlyare his responsibilities, andwhat was I thinking paying ascalper $200 for Eddie Granttickets in 1984? We’ll try touncover most of theseanswers right now.

Weekend at Bernanke’s:Unlike a normal person whowould spend their weekendupdating their Facebook status2 or sit around eating

cool ranch-flavored DoritosBernanke has been known towork tireless seven-dayweeks. Running the FederalReserve is not as easy as itlooks, Mortgage Fans. Tounderstand what he does let’stake a little history lessoninto why his job was createdin the first place and whatthe Federal Reserve’s responsibilities are.

The Federal Reserve is thecentral banking system of theUnited States. It was createdin 1913 and was largely aresponse to prior financialpanics and bank runs, themost severe of which was thePanic of 19073 - a panic thatstarted when the New YorkStock Exchange fell close to 50% from its peak the previous year (sound familiar?).Over time the responsibilitiesof the Federal Reserve grewand molded into four different areas:

1. Conduct the nation’smonetary policy by influencing monetaryconditions in pursuit ofmaximum employment,stable prices, and moderate long-term interest rates.

2. Supervise and regulatebanking institutions toensure safety and creditrights of consumers.

3. Provide financial servicesto depository institutionsand the U.S. government.

4. Ensure a World Series forthe Cubs.

In addition to all of thisBernanke’s role is micromanaged by Congress,the media, and the public likeit has never been before. Everymove he makes, every breathhe takes, we’ve been watchinghim. And he’s handled it withgrace under pressure. If theeconomy is a hurricaneBernanke has been the eye ofthe storm where birds arechirping and the sun is shining.And while it’s not in theFed’s job descriptions above,I personally feel that half ofhis job is to keep the panicunder control. He’s beenmarvelous at this.

Ba-Ba-Ba Benny and the Feds:I will most likely enter geekstatus by saying this, but formany years Alan Greenspanwas my hero. Here was a guythat took a job that wasn’treally mainstream and turnedit into the financial face ofpop-culture. Do you rememberor did you hear of any FedChairmen before Greenspan?You don’t because they didn’thave the flair that Greenyhad. (Side note: beforeGreenspan it was Paul“Gaylord” Vocker from ’79-’87.He will be known for beingthe Fed Chairman who raisedthe Prime rate to 21.50% in1981 – the all-time high.Before Vocker it was WilliamMiller, a guy who stated itwas his belief that inflationcould “prime the pump” ofthe economy. Eleven monthsinto his term the dollar hadfallen 42% against the Yen,

Valuable Mortgage Information and a lot of other really Cool Stuff !

Volume 11 issue 2 – Summer 2010

“I lived through thedepression. My mother’s.”– Stuart Smalley.

At age 11 he won the SouthCarolina state spelling bee.Since his high school did notteach calculus, he learned iton his own. His SAT scorewas 1590 out of 1600. Hegraduated summa cum laudefrom Harvard1. He succeededAlan Greenspan as Fed Chiefin 2006 and was TimeMagazine’s Man of the Yearin 2009. Yet despite this

1. While this is impressive he couldn’t compete with me in naming every Brady Bunch episode. 2. How great would it be if Bernanke were on Facebook? His status would read, ‘Ben Bernanke: is headed to Starbucks for a latte and I’m

thinking about raising rates LOL.’3. Not to be confused with the Panic of ’87 when the answers to the Spanish test I had written on my arm had smudged because of my

nervous sweat or the panic of 2007 when Hostess Brands (Twinkies, Ding Dongs, etc.) declared bankruptcy.

TARP’s unpopular bankbailouts, and for now we areslowly seeing signs of hisgambles paying off (employment, home sales,and new construction are allup from a year ago). Onlyhistory will let us know whatkind of job Bernanke isdoing. People loved Greenspanwhen he was in office, butnow a lot of people arepointing the finger at him for not seeing the warningsigns. Years from now whenBernanke has been retired I’m guessing we won’t seethat same finger pointing.For now I’m driving theBernanke Bandwagon. Iencourage you all to comealong for the ride because itwill not be as bumpy as thecritics will lead you to believe.

No worries, folks. The economy is picking up.

he was fired, and PresidentCarter launched a “dollar rescue package” that includedemergency sales from theU.S. gold stock4!) Maybe thetiming was right forGreenspan to take centerstage because the Fed, withall their power, didn’t reallyhave an identity. But was itright to look at Greenspan asa hero? As much as I admiredhim he never really had muchof a crisis to deal with in his19 years serving as FedChairman, and he got out justin time before the biggesteconomic collapse in our lifetime. Enter Ben Bernanke…

Philosopher GeorgeSantayana said, “Those whodo not study history aredoomed to repeat it5.” Maybeit’s a good thing that by hisown account Bernanke hasspent more than 10,000 hoursstudying the Great

Depression6 and even wrote abook called Essays on theGreat Depression. I think I’llwait for the movie7 on thatone. Could there have been abetter person to step in andsave this country from experiencing anotherDepression? He immediatelyintervened to curb financialpanics and made major radical decisions that no Fedhad ever done before. Thisconsisted of printing up $700billion in relief (TARP) moneyto stimulate the economy;assisting in public takeoversof Fannie Mae and FreddieMac; against the advice ofhis own cabinet members heapproved the bailout ofinsurance giant AIG; convinced Bank of Americato acquire Merrill Lynch;ratcheted interest rates tozero; revolutionized housingfinance by buying $1.25 trillion of mortgage bonds;and approved of the Bearstrading draft picks to Denverfor Jay Cutler. None of thiswas pretty. The Fed is supposed to lend onlyagainst safe collateral, andthe Fannie/Freddie and AIGdeals clearly went againstlogical thinking. Bernankeisn’t just trying to save us;he’s led an effort to save the

world economy. Has thereever been a more powerfulbald man in this country?!Well, some critics say thebald man has gone too far inhis saving- the-world-campaign.Critics say Bernanke’s expertise of the Depressionhas diverted him from thereal threat to the UnitedStates now: inflation. Criticssay that by trying to avert afinancial slump and completeand total economic collapse,Bernanke may have fueledhigh inflation for many yearsto come. This is bad forinterest rates, Mortgage Fans.There are a handful of representatives in Congressthat felt Bernanke’s reappointment was a mistaketoo. Alabama Senator RichardShelby voted against a 2ndterm for Bernanke, saying,“We are still deep in thewoods and Bernanke is notthe best-suited person to leadus out and keep us out. Hecares more about inflationthan he does double-digitunemployment8, and billionsof TARP money was spentwithout consequences.”Despite all of the criticism itlooks like Bernanke’s movesare starting to pay off.Interestingly enough taxpayersare on track to profit from

4. Can you imagine if this happened today? Would love to see the administration panicking and sweating in a huge vault as they bagged upeverything to send out to Cash 4 Gold.

5. This is true. I failed History my freshman year in high school and had to take it again the next year. 6. Bernanke ranks in my top 5 list of guys I would not want to spend a weekend with in Vegas. 7. I know the rule of thumb is that the book is always better than the movie, but if there were a Rocky 3 book my guess is that the movie

would be better.8. It’d be fun years from now if the economy is thriving to have Bernanke pull a ‘Will Hunting’ and hold a glowing Employment Report up

to the Senator’s face. “You like apples, Shelby? How ‘bout them apples!”9. “We gonna rock on down to Electric Avenue. And then we’ll take it higher.” Thank you to all of my friends who talked me out of using

these lyrics as my senior yearbook quote.

At least Bernanke’s not here lecturingus about the Great Depression.

Were you alive in the 80s and 90s? Metoo! Were you paying attention? Me neither. But let’s try some trivia anyways.Nine out of ten correct will win a coolmystery prize. Seven to eight will win acongratulatory email from my assistant.Six or less correct will win bits of dried-out Play Doh I found in my sockdrawer last night. Good luck (emailanswers to Barry@Perl Mortgage.com):

1. Eddie Grant wrote two hit songs9 in hiscareer. Name the one that was the titletrack for a Michael Douglas movie.

2. What did Nirvana smell in 1991?3. What movie was Keyser Soze in? 4. Cher, Meryl Streep, Jodie Foster,

Barbara Hershey, Debra Winger,Michelle Pfeiffer, Goldie Hawn, andDiane Keaton all passed on this movie

before Davis and Sarandon were signed.What movie?

5. In the 1984 Family Ties episode DoubleDate what are the real life names of thetwo girls Alex brings to the prom?

6. This girl had a controversial speech afteraccepting her Best New Artist award atthe 1997 MTV Music Awards show.

7. Whose 1981 wedding was the mostwatched in TV history next to Charles and Diana?

8. What 1993 movie is this quote from:“Oh. Wow. Gee whiz. Looky here. Youknow we’re always fascinated when wefind leg irons with no legs in them.Who held the keys, sir?”

9. Who played Officer Tom Hanson on 21Jump Street?

10. In 1987 what reason did Julie Valvanogive for not wanting to date me anymore?

You’d look angry too if you only hadtwo hits on a greatest hits album.