The AP is reporting that Obama is planning to nominate Fed Chairman Ben Bernanke to a second term:
http://finance.yahoo.com/news/AP-source-Obama-to-…
Frankly, I'm a little surprised by this move. I would've bet big money that Larry Summers would be the next chairman, and I'm still a little skeptical about this announcement.
In any case, the mayor of New York City has become a big pain in Bernanke's ass by winning a Freedom of Information Act suit against the Fed, forcing the Fed to disclose reports on emergency bank loans (props to tpf):
http://www.bloomberg.com/apps/news?pid=20601087&s…
We all know how much the Fed loves transparency. I can picture an enraged Bernanke printing an extra billion or two tonight while he ponders the audacity of the taxpayers demanding to know what the Fed did with their money.
I think that it would be ridiculous to bring someone else in. The market has been looking for stability and a sense of consistency among government decisions. Why would you replace the man that has been orchestrating the entire recovery? Whether you like him or not the decision to keep him was the only one.
I think it was a vote for stability/continuity rather than a vote for Big Ben.
I still don’t understand the praise he gets. Applauding his handling of the crisis is akin to applauding a quarterback for making a tackle after throwing an interception. He made some bad calls before/during to the crisis.
March 28th, 2007 – Ben Bernanke: "At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained,"
May 17th, 2007 – Bernanke: “While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S.”
June 20th, 2007 – Bernanke: (the subprime fallout) ``will not affect the economy overall.''
October 15th, 2007 – Bernanke: "It is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions."
(I’m not saying I disagree. However, his actions sure don’t match his words).
February 29th, 2008 – Bernanke: "I expect there will be some failures. I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system."
June 9th, 2008 – Bernanke: Despite a recent spike in the nation's unemployment rate, the danger that the economy has fallen into a "substantial downturn" appears to have waned,
July 16th, 2008 – Bernanke: (Freddie and Fannie) “…will make it through the storm”, "… in no danger of failing.","…adequately capitalized"
http://zerohedge.blogspot.com/2009/06/confidence-game-in-quotes.html
Before that info comes out, I'd def short C & BAC maybe wells...
If the economy weren't so fragile, there's no way he gets the vote of confidence. Of course, it's clear that Obama & Co. have zero economic know-how, so maybe he would have gotten the nod regardless. In all fairness though, you can't expect a Fed Chairman to tell it like it is when it comes to the economy; given their position, what they say can cause panic. Their actions speak louder than their words, and in that respect, Bernanke, and Greenspan, screwed up.
"Give me guys that are poor, smart, and hungry. And no feelings." - Michael Douglas as Gordon Gekko in "Wall Street"
well, congrats Helicopter Ben! whats going to be next, social sec. or the FDIC?
Bernankruptcy lives on
Wow! I can't believe the hate for Bernanke on this site. The truth is that he did a great job in 2008 (outside of letting Lehman collapse) and deserves to be lauded for his decisions.
Ofcourse he could have started lowering interest rates sooner or quicker, but that is easy to see in hindsight. You all easily forget that inflation rates were creaping up towards 6% in the middle of 2008 and that was a legitimate concern.
Bernanke did a hell of a job and you guys need to show him some more respect.
@buyside CFA - it is easy to point out only the bad calls and then conclude that he did a bad job. You should go work for the media instead of banking; they are very good at that crap.
,,,my problem isnt with bernanke but rather with the entire notion that 12 un-elected guys in a try to manage the economy by setting short-term interest rates. There is no proof at all that the Federal Reserve has any expertise greater then that of the market when it comes to setting rates/guiding the economy. In fact, it is quite clear to most that the artificially low rates set by Greenspan in the earlier part of the decade contriuted to the volatility we have seen in the economy. So the question is, why does nobody talk about the real fallacy which is that central banking and the federal reserve system even exists?
Switching out Bernanke for Yellen, Summers, or some other mainstream academic would be useless as it would do nothing to solve the core problem, which is the inherent futility of the fed's attempt to centrally plan the economy.
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