He's also an outspoken critic of the Basel III rules - introduced globally after the crisis - which he says do not do enough to reduce the size of the riskiest banks and are easy for them to game.''

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Frankly, I view the present course of monetary policy as reckless - not because it threatens inflation (which I don't think it will for several years), but because it diverts scarce capital away from productive investment and toward speculative activities; because it fails to act on any economic constraint that is actually binding here, so has little hope of providing the economic "support" that it purports to offer; because decades of historical evidence provide no basis to expect a material "wealth effect" from stock values to the economy; because the policy lowers hurdle rates and encourages borrowing for unproductive purposes - including stock buybacks at record highs (and there is no evidence that buybacks are a good indication of value); because it punishes the elderly on fixed incomes; because it perpetuates a bubble-bust cycle created by Fed intervention, which is not the medicine but the very poison itself; and because moving to the left on the liquidity preference curve will likely be as painful as moving to the right has been pleasant. Meanwhile, we'll continue along a studied, disciplined course over the remainder of this market cycle, considering a broad ensemble of evidence that has been validated across market cycles throughout history. Our views will change as that evidence does.

A major problem is that much of this incredible surge in credit has been channeled through the shadow banking sector, which is very closely connected to the banks.  Total non-loan credit hit $5.6 trillion in 2012, with nearly $2 trillion of that credit extended by opaque non-bank financial institutions, Fitch's research shows.  Furthermore, more than $2 trillion were connected to informal securitization of bank assets in so-called wealth management products (WMP).

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In sworn testimony, six former employees describe what they saw behind the scenes of an often opaque process that has frustrated homeowners, their attorneys and housing counselors.

They describe systematic efforts to undermine the program by routinely denying loan modifications to qualified applicants, withholding reviews of completed applications, steering applicants to costlier "in-house" loans and paying bonuses to employees based on the number of new foreclosures they initiated.

The employees' sworn testimony goes a long way to explain why the government's Home Affordable Modification Program, launched in 2008 during the depths of the housing collapse, has fallen so far short of the original targets to save millions of Americans from being tossed from their homes.

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The dilemma now is that officials are in what Sylvester Eijffinger, a professor of financial economics at Tilburg University in the Netherlands, likens to what old maps would call "terra incognita" -- the Latin for "unknown land."

In the case of the Fed, while good communications are vital for controlling markets, they're complicated by the officials themselves not knowing when to exit, disagreeing over the right timing to do so and political pressure to hold back.

You mean these hacks don't know what the !@$% they are doing? Big surprise around these parts. But we can see why markets would be a little upset at the revelation...

ING Groep NV (INGA), Royal Bank of Scotland Group Plc (RBS) and UBS AG (UBSN) were among 20 banks at which 133 traders tried to manipulate the Singapore interbank offered rate, swap offered rates and currency benchmarks in the city-state, the Monetary Authority of Singapore said in a statement yesterday. The regulator said it will also make rigging key rates a criminal offense and bring supervision under its direct oversight.