It is interesting that Ben Bernanke feels compelled to point out that the fallout from the financial crisis will reverberate through personal and household wealth for quite some time - though he doesn't point to the 18% loss American personal wealth took in 2008, he certainly acknowledges a severe hit to American families. How precious of him.

What Bernanke does not acknowledge, which should come as no real surprise, is that while American families are hurting, watching their retirement funds dry up and learning to choose between rent and cat food for dinner, is that the major players in the TARP game are not only reporting profitability (the nerve!) but soaking credit card customers for every extra penny. If this is starting to seem odd to you, I might remind you that we have long since exited "the real world" and are now living in Bizarro World. And only here can this sort of thing go on so flagrantly without a peep from our favorite central bank.

Bloomberg on Bernanke's speech today from DC:

Federal Reserve Chairman Ben S. Bernanke said the collapse of U.S. lending will probably cause “long-lasting” damage to home prices, household wealth and borrowers’ credit scores.

“One would be forgiven for concluding that the assumed benefits of financial innovation are not all they were cracked up to be,” the Fed chairman said today in a speech at the central bank’s community affairs conference in Washington. “The damage from this turn in the credit cycle -- in terms of lost wealth, lost homes, and blemished credit histories -- is likely to be long-lasting.”

The U.S. central bank has cut the benchmark lending rate to as low as zero and taken unprecedented steps to stem the credit crisis through direct support of consumer finance and mortgage lending. The Fed plans to purchase as much as $1.25 trillion in agency mortgage-backed securities this year to support the housing market and is providing financing for securities backed by loans to consumers and small businesses.

Bernanke and the Federal Reserve Board approved rules last July to toughen restrictions on mortgages, banning high-cost loans to borrowers with no verified income or assets and curbing penalties for repaying a loan early. The action came after members of Congress and other regulators urged the Fed to use its authority to prevent abusive lending.

While identifying that credit providers are the problem, Bernanke goes on to say that we should really just sort of leave them alone, lest they be "restricted" and unable to pull creative rabbits out of their hats. Like derivatives, Dr. Bernanke? Maybe Kaufman was onto something with the whole libertarian Fed concept after all...

“We should not attempt to impose restrictions on credit providers so onerous that they prevent the development of new products and services in the future,” Bernanke said. Regulations should ensure “innovations are sufficiently transparent and understandable to allow consumer choice to drive good market outcomes.”

All in all, a dry central banker speech from Captain Inflation - as if you expected something new and revolutionary?

Come on, Big Daddy Ben, I expected a little better than this. But Bernanke's got to play nice while the "recovery" team is busy spreading propaganda about profitability and a huge pair hanging from the rejuvinated bull. Market, that is, not shit - if we were talking BS, I'd certainly file this speech in that folder. Bah.

If you're terribly bored and like your propaganda delivered as tame as it comes, the speech in its entirety may be found on the Board's website here. Yawn.