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Desperate Bernanke Panics

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January 22, 2008 – Comments (10)

So wait, what's Inkjet Bennie's job again?

1) Monetary Policy (watching inflation)

2) Economic Policy

3) Supporting asset prices?

Today, taking his orders from dropping foreign markets, Inkjet Ben decided that asset bubbles need more air, and the Fed cut rates 75 bp.

He looks pretty desperate, doesn't he?

Why can't he just let the market work things out? I suspect he's only made things worse by telegraphing his fear and impotence to the entire world.

This will pass, but only if meddling bureaucrats like this one recognize that "stability" of markets doesn't mean supporting asset bubbles during down times and standing by during "irrational exuberance." It means letting them work things out on their own and maybe, just maybe, using regulatory tools on the way up to make sure that things don't get stupid.

Sj

10 Comments – Post Your Own

#1) On January 22, 2008 at 9:33 AM, ctojeira (40.46) wrote:

Amen.

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#2) On January 22, 2008 at 9:52 AM, dwot (39.79) wrote:

Double Amen...

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#3) On January 22, 2008 at 9:55 AM, EScroogeJr (< 20) wrote:

When both the money and the economy depend solely on asset prices, monetary and econonomic policy by necessity boils down to supporting asset prices :):):)

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#4) On January 22, 2008 at 10:02 AM, camistocks (< 20) wrote:

desperate shorts to panic...

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#5) On January 22, 2008 at 10:03 AM, Gtrinvestor (99.71) wrote:

The capriciousness of Bernanke is doing a great job taking all the heat off of Greenspan's missteps.... I mean at least with Greenspan you kind of knew what you were getting, but Bernanke?     

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#6) On January 22, 2008 at 10:06 AM, FourthAxis (< 20) wrote:

Seth, I fully agree.  I said the same thing today about causing more panic.  Oh well, I'm short still, here we go. 

Scrooge, glad to see your back and as delusional as ever.

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#7) On January 22, 2008 at 10:18 AM, saunafool (98.69) wrote:

The NYT ran a long article about Bernanke this weekend: "The Education of Ben Bernanke"

He wants to be remembered as a great central banker. So far, he's doing a heckuva job. It will be interesting, and perhaps disasterous, to see how the next few years play out.

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#8) On January 22, 2008 at 1:15 PM, floridabuilder2 (99.33) wrote:

it worked for me... i bought some unbelieavable deals at the open... it took for ever though for those market orders to execute..

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#9) On January 22, 2008 at 4:10 PM, Imperial1964 (97.81) wrote:

4) Punish anyone who is short. 

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#10) On January 22, 2008 at 4:49 PM, abitare (35.60) wrote:

I have posted this before, but I will let billionaire Jim Rogers explain my view: 

This currency, as we manage it, is a wonderful machine. It performs its office when we issue it: it pays and clothes troops and provides victuals and ammunition , and when we are obligated to issue a quantity excessive, it pays itself off by depreciation.

Benjamin Franklin (1706-90)

In a letter to Samuel Cooper, 22 Apr 1779 

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