Most people probably missed it. It happened so fast. But I heard it. I heard him say those three words: “…far from normal.” Did you hear it? That’s what Federal Reserve Chairman Ben Bernanke said Tuesday via satellite transmission to people attending the Federal Reserve Bank of Atlanta’s Financial Markets conference on Sea Island in Georgia.  

Those three awesome, yet simple, itty bitty words “…far from normal,” have the potential to change history; bankrupt mighty financial institutions or in my case transport a grown man back to his youth and the joy that comes to every 13-year-old who reads Mad Magazine. Stop!

Anyone who was never a 13-year-old boy or girl or is unfamiliar with Mad Magazine should stop reading, go to a newsstand now and purchase it. Even better, if you have a 13 year old just ask them because the tonic to calm the fear that comes with the ills of our slowing economy can be found in the pages of Mad Magazine.That’s not something I made up; it comes from Bernanke.

“Far from normal” is fed speak for “What -me worry?” three other awesome words which form the famous, most excellent quote attributed to one of the greatest minds of the twentieth century, Alfred E. Neuman, Mad Magazines mascot. The record speaks for itself. 

Neuman ran for president as a write-in candidate in the 1950s. We all know that only the brightest most ethical, responsible, morally fit and fiscally prudent members of our society can run for president or hope to achieve that esteemed position. Neuman also has one of the most recognized mugs on the planet. Neuman’s greatest gift to mankind is the quote, “What - me worry?” Think about what that means.

You’re driving with your wife in the middle of nowhere, miles from the nearest civilization when you run out of gas. Your cell phone is dead, it’s snowing, and you have no food in the car. Your wife decides no better time than the present to inform you that she is having an affair with your second cousin Moe who was just released from prison.  She says not to worry about a divorce or child support since your 16-year-old daughter decided to drop out of high school and run off with her boyfriend whose lawyer assures him that he will easily beat that robbery charge. 

“And by the way,” your wife says, “the IRS called to request your income tax records for the previous five years and if you don’t produce them by tomorrow morning they will throw you in jail.”   She sees panic in your eyes and asks, “What are you going to do?” Your heart is pounding; mind racing as you struggle to answer. Then you see it on the back seat, an old beat up copy of Mad. Epiphany! You quickly turn to your wife and with the same clarity and elocution that Bernanke used during his recent speech you look at her and with the conviction that is the hallmark of Neuman you say, “What-me worry?”

That’s what Bernanke did when he told all those people in Georgia--there has been some improvement in the complicated confused chaotic credit markets, “…but at this stage conditions in the financial markets are still far from normal.”   “What-me worry?”  Yup, here’s why.

The Federal Reserve has new ways to lend troubled banks money to make sure western civilization doesn’t come to a debt ridden belly flopping halt!  One of those nifty ways to lend cash is called a Term Auction Facility.  A facility is fed speak for what you and I call a loan. The Fed holds auctions where bidders, (the banks) compete for billions of dollars in short term loans. They have to pay that money back within 28 days. (And you thought ATM fees were outrageously high to fatten the bank CEO’s paycheck.) Anyway, the money gets paid back and the Fed then has another auction. This keeps money flowing in and out of the financial system. Neat isn’t it?  There are other cool “facilities” with equally cool names like The Primary Dealer Credit Facility and the Term Securities Lending Facility. I personally think they should sell naming rights to raise cash.Imagine, The Depends Cover Your Assets Lending Facility or The Schlitz Malt Liquor Debt Hangover Facility.  

So, why do we need all these facilities? Well, in a normal world, the banks lend each other the money to keep western civilization on track or at the very least from collapse, also known as Communist era Albania.  But anyone who has read the news lately; and I’m not talking about the New York anchor who dropped an F-Bomb on live TV kind of news; knows that the current financial system is as Bernanke says, “…far from normal.” A result of this lack of normality is that banks world wide are hoarding cash and not making loans to each other or you and me. Maybe it was a banker who dropped that F-bomb on TV and not a news anchor? Or maybe it was  Bernanke because he told all those financial people in Georgia, “We (the Fed) stand ready to increase the size of the auctions further if warranted by financial developments.”

In other words, we may have to lend even more money to banks because they still don’t know how much bad debt they have and as a result the banks continue to freak and hold on to their cash.  “What-me worry?”

Charles Evans, president of the Federal Reserve Bank in Chicago is worried. He says, “…many borrowers have paid higher rates than would ordinarily have been the case…” as a result of the new reluctance by banks to lend money and he’s not alone.

Janet Yellen, president of the Federal Reserve Bank in San Francisco says, “Students are finding it harder to obtain college loans…home equity lines have been capped...Many banks are raising additional capital, but most are also tightening credit terms and restricting availability of loans to many households and business.”  Why? Because banks are hoarding cash in case their bad debt is greater than they estimate.  “What-me worry?” 

Even former Federal Reserve Chairman Paul Volcker [CHOIR SINGS HALLELUJAH] who saved mankind from the damnation of inflation in the 1980s and disco music (few people know this) says the system has failed.  “This is not just a financial problem; it is an economic problem. We have had an unbalanced economy. This country has spent some years spending a lot more than it’s producing, and it’s carrying out a higher level of consumption… than we can sustain,” Volcker told the Congressional Joint Economic Committee.  In other words, Volcker says we are all spending more than we can afford and it is time to adjust and he doesn’t mean adjusting the way baseball players do it! Volcker says the financial system and the economy are broken! “What-me worry?” Yes and that’s a good thing.

When Neuman or any other equally gifted American says “What-me worry?” there is a little bit of nervousness hiding behind the façade.  That’s good because when people are nervous, not panicked, but nervous, they tend to consider their options, weigh the implications and make better decisions.  It was a lack of “What-me worry” during the past few years that got us in to this financial mess. Yellen says “the market discipline that sophisticated investors are supposed to provide was lacking.” 

Volcker says, “….adjustment has to be made sooner or later. We’re probably in the midst of making it.”

Even Mr. “far from normal” Bernanke says “once financial conditions become more normal, the extraordinary provision of liquidity (those nifty loan facilities) by the Federal Reserve will no longer be needed.”  More normal means investors, bankers and average Americans will say “What-me worry” a lot more than we have in the past because all of us will be appropriately on guard which brings me to my conclusion and the scenario regarding your wife.

After telling her “What-me worry?” you continue to say, “I knew about your affair with Moe.  His wife Inga, the 26-year-old Swedish Playboy bunny told me since we have been having our own affair after discovering what you and Moe were up to.  And don’t worry about our 16 year old daughter running off with her boyfriend.  It is legal in some states to get married at 16 and she can visit him in jail if he’s convicted on the burglary charge.  As for the IRS, several years ago I invested in oil as a way to raise money to pay for our daughter’s college education. She won’t need the money. As you know the price of oil has skyrocketed and just the other day I cashed out. I made a huge profit and my buddy Roy, who happens to be the IRS agent who called, needs my capital gains statement.  That line about sending me to jail was code Roy and I agreed upon which means, ‘I have emptied the gas tank in your car.It should run out of fuel in the middle of nowhere and I’ll pick you up.’ Here he comes now. Have you given any thought to how you’ll get home or your future?” To which your wife will probably reply, “What-me worry?”