Bernanke is a complete goof

[polpolik]

Quote from thecalip:

I completely agreed, however, this WON'T happens any time soon. So the best to do now is raise rate to control inflation.

Reminds me of Greenspan's book when he told the story of Paul Volcker back in the 80s when people thought he was crazy when he raised rates in a slow and sluggish economy to combat inflation.

Not that we're in that level of inflation yet but the feds are starting to get painted into a corner between choosing high inflation or deep recession.

 

[Pilotboy]

Quote from day7793:

Look you are the moron who doesn't understands how things work.

Everything is going down but " energy prices/gas" keeps going up and causing inflation. Nobody in the Federal government can put a lid on that and that's why these pressures were countered with increasing rates that eventually killed the real estate market. Now the real estate market is dragging the economy and the stock/ equities markets into a downward spiral with mortgage mess. Fed has no control on domestic oil companies or even our Congress doesn't wants to lift an eyebrow. Consumers are very upset and concerned with gas prices and the woes will not stop here.

A rate cut will help a long way, but the gas energy prices and the profit taking need to be curbed as well.

It is a bit more complicated than that buddy. You know if they raise rates, the dollar could strengthen right? Thus oil, food, imports get cheaper for us. The FED is in a box, as they say.

Increasing rates killed the Real Estate market? I never heard that one before.

 

[my2cents]

Quote from sprstpd:

I think he should raise rates 100 bps to wring out the excesses in one swoop and tell market participants there ain't no Fed put anymore. And all those speculating homeowners can go suck it (along with the banks who lent them the money).

Why stop at 100? Make it 200 and give me the windfall I've been waiting for all my life. I'm already up 50% in my portfolio since Sept. Did I fail to mention I'm net short.

Just
My2¢¢

 

[Kicking]

Yes he's a goof. For letting Greenspan lower rates to 1% and saying he will do it again .

He 's lost all credibility I think. I mean this week was just the last nail in the coffin . He comes out promising to give all the cuts necessary and then some other Fed speaker comes and say maybe not, headline inflation counts after all. No matter what they do , market doesn' t care anymore.
If they cut as much as the market expect we'll be at 3% soon.
This crisis is going to take years to resolve I think that means they will runout of ammo at 3%.

 

[Landis82]

Quote from AAAintheBeltway:

What I meant by "piss away" was that the venal idiots in congress and the administration are now in a panic to shower people with money under the guise of stimulus. Plus, if things continue on their current trajectory I can see FNM and FRE lining up at the Treasury for a taxpayer-funded bailout. If a couple of bond insurers go insolvent, which could easily happen, do you think congress will just let muni debt get destroyed? Not in our lifetimes. So by the time the smoke clears, we will have wasted hundreds of billions of dollars.

I fully understand the concerns about inflation, the dollar, moral hazard, etc but we're in a situation where we have to choose between less than ideal options. A big drop in rates lowers the temperature and gives the financials some breathing room. Plus, it is inevitably going to happen eventually anyway. That is my main beef with Bernanke. He has fiddled while the pot boiled over.

I would tend to agree with AAA on this ( for perhaps the first time ever in the history of ET! ).

But what is worth mentioning here is that while Bernanke is certainly BEHIND the CURVE in lowering rates, he is obviously in a very tight spot here and I think that he is smart enough to KNOW that.

I believe that he is being slow to react, by design.

I think that he is fully aware that the Fed Funds rate is nearly 2 full percentage points above the 2-year TNote yield and that is ANYTHING BUT an aggressive easing of monetary policy!

He doesn't care about the real estate market. He just wants to keep the commercial banking sector liquid enough to "muddle" through this painful process; hence the temporary repos that get served-up in those "sexy" little auctions just below the Discount Rate for our nation's banks.

He's walking a tight-rope and trying to clean-up the mess that was left from Greenspan's monetary policies.

As for inflation and the dollar . . .

It won't matter as our economy ( and the economies overseas of our trading partners ) decelerate. Oil and other basic materials will "pop" and go thru some pretty nasty corrections. Just look at the Monthly Copper chart for example . . . That chart looks ripe for one helluva "rollover".

Have a nice 3-day weekend everybody and enjoy the football games!

 

[buzzy2]

Bernanke and Paulson got it wrong and that's because this is a counterparty risk crisis, not a fiscal or monetary problem. So this mess is not going to be fixed with BS money pumping.

They should round up all wall st CEO's and tell them no more monkey business, from now on they should back all the papers they sell with actual dollar reserves, no BS mark-to-model, no BS "correlation" hedging etc.

 

[sprstpd]

Quote from my2cents:

Why stop at 100? Make it 200 and give me the windfall I've been waiting for all my life. I'm already up 50% in my portfolio since Sept. Did I fail to mention I'm net short.

Just
My2��

Anyone for 300bps? I'm game. Interest rates would still be trailing inflation.

 

[Covertibility]

Quote from sprstpd:

Anyone for 300bps? I'm game. Interest rates would still be trailing inflation.

Santelli said it best this morning, cut the rates to zero and declare a tightening bias.

 

[kashirin]

Quote from Landis82:

It won't matter as our economy ( and the economies overseas of our trading partners ) decelerate. Oil and other basic materials will "pop" and go thru some pretty nasty corrections. Just look at the Monthly Copper chart for example . . . That chart looks ripe for one helluva "rollover".

[/B]

When it doesn't matter then he can cut
For now we have the worst consumer inflation in decades
And economy is not for economy but for people, right?

And people feel this inflation, something must be done
Look how recession is priced into stock but oil still in 90s and when fed start cutting it was 60s
so your assumption about oil correction is just assumtion. I Guess with those $2500 cars american should forget about private transportation and be prepared to use public buses till the end of the world unless US does something with rates, dollar and globalization
everybody can't be rich. so if china and india rich know US must be ready for bad times

 

[jonnyy40]

Everybody can be rich(er).Just like the world food shortage that's been postulated for centuries,we've used ceative technology to produce more.The next big idea is just around the corner.Human ingenuity is inexhaustible.The future's very bright.