Bernanke is a complete goof

[Optionpro007]

Quote from AAAintheBeltway::

I think Bernanke is developing into something of a disaster as Fed Chairman. He is close to having the markets totally lose confidence in him. The last time that happened was with Jimmy Carter's Fed Chairman, and the results were not pretty.

I said before the last meeting they should cut 50 bps, and I was attacked by many of you. Now, after saying risks were contained, Bernanke will be forced to cut at least 50. Fed futures are now pricing in incredible cuts by summer. He looks like a friggin' idiot. The banking system is coming down around his ears, FNM and FRE will require huge bailouts, there is no way the bond insurers can make good on all their exposure, and people are worrying about the cost of corn or oil? If you want ag prices down, do something about the idiotic ethanol policy. If you want oil down, talk to the Saudis. Oh wait, Bush already did that and they told him to f*ck off.

Bernanke's incompetency is now leading to congress wanting to pass "economic stimulus", which will be some collection of the most mis-guided giveaways possible. Incredibly, Bernanke seems to be encouraging it. He seems to lack the respect of his fellow Fed members, as they seem to feel free to go out and say whatever crosses their mind. This did not happen with Greenspan.

I will repeat my advice. We have a serious financial problem. One way to make things better in a hurry is to lower rates aggressively. There are costs to that policy but they pale in comparision to what we will piss away if somethng isn't done.
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Quote from Bigpipn:

Excellent commentary.

My only problem is that our national debt is financed in [short-term] treasury bills. What are we going to do to stop this inflation? The only way to slow inflation is to tighten monetary policy--raise rates. What happens when we are paying $1+trillion in interest on foreign debt?

How is this game of Writing Checks We'll Never Cash going to solve anything?

Lowering rates won't solve anything, it will only push the problem to a later date, and the more we push it off the worse it's going to be. Is the fed going to have $2 and $3 trln TAFs??!?

This isn't liquidity issues, it's inflated paper assets being repriced, it's bankrupcy.

You're absolutely right we are in serious, serious trouble.

Great commentary by you both. Perfect assessment of the situation imo. Thanks!!

 

[HedgefundTrader2]

Quote from 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.

Bernanke should shave and go home.

 

[TraderAnon]

But then he would have less time to be lurking on EliteTrader.com

Quote from day7793:

Bernanke should shave and go home.

 

[HedgefundTrader2]

Quote from TraderAnon:

But then he would have less time to be lurking on EliteTrader.com

Bernanke proved to be behind the curve once again. Only when the world wide markets melted and the US futures pointed to pre-market crash this idiot went out and cut rates. He could have done that 1 week ago and saved all this meltdowns around the world.

He is reactionary ivory tower intellectual with an unshaven face.

 

[Hydroblunt]

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.

The system was designed to produce chronic inflation. Raising rates does not do much, really more of a psychological effect. To push up rates to over 10% would take years under their current way of doing things.

Now if they decide to truly shrink money supply, then you will have deflation, via 1930s style. But there won't be any recovery, just a full bankruptcy of the nation.

As long as you focus on the Fed Funds Rate, you will continue being hoodwinked. The whole nation is controlled by credit and the banks which extend that credit. So call Bernanke a goof all you want, he may be a naive fool, but the Federal Reserve and those who truly control it have you by the balls.

 

[HedgefundTrader2]

Quote from Hydroblunt:

The system was designed to produce chronic inflation. Raising rates does not do much, really more of a psychological effect. To push up rates to over 10% would take years under their current way of doing things.

Now if they decide to truly shrink money supply, then you will have deflation, via 1930s style. But there won't be any recovery, just a full bankruptcy of the nation.

As long as you focus on the Fed Funds Rate, you will continue being hoodwinked. The whole nation is controlled by credit and the banks which extend that credit. So call Bernanke a goof all you want, he may be a naive fool, but the Federal Reserve and those who truly control it have you by the balls.

Bernanke cut the rates and that is an empirical fact. There is not much you can do about it either. Sorry to disappoint you, but there is no recession on the horizon or in an election year.