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Ben Bernanke will be speaking on Thursday in New York. The speech is thought to be the most important statement in his career so far.
US Federal Reserve - Ben Bernanke
- Thread starter noirua
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Jim Rogers on Ben Bernanke...
http://www.bloomberg.com/apps/news?pid=20601084&sid=aThdP7ytP3Jw&refer=stocks
http://www.bloomberg.com/apps/news?pid=20601084&sid=aThdP7ytP3Jw&refer=stocks
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Ben Bernanke "speaks" on "Fed working with Banks", slowdown and recovery: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aeCFsQyMYvfE
This person does not agree with Ben Bernanke and his methodology.
Why do the banks need such a huge infusion of credit if they are as "rock solid" as Bernanke says?
In the last two months, the pool of qualified mortgage applicants has contracted, as has the market for merger and acquisition deals (private equity). So the banks are probably doing more with the Fed's $41 billion injection than just beefing up their reserves and issuing new loans. The market analysts at Minyanville.com summed it up like this:
"Banks are taking the liquidity the Fed is forcing out there through the discount window and repos. After using it to shore up the declining value of their assets, they have excess to lend out. Finding no traditional borrowers that want to buy a house or build a factory, the new rules the Fed has set forth allows the banks to pass this liquidity onto their broker dealer subsidiaries in much greater quantities. These broker dealers are lending thus to hedge funds and margin buyers who are speculating in stocks. Remember, the Fed is powerless unless it can find people to borrow the credit it wants them to spend. By definition, the last ones willing to take that credit are the most speculative."
This is a likely scenario given the fact that the stock market continues to fly high despite the surge of bad news on everything from the falling dollar to the geopolitical rumblings in the Middle East. Last month, the Fed modified its rules so that the banks could provide resources to their off-balance sheets operations (SIVs and conduits). If the Fed is willing to rubber-stamp that type of monkey-business; then why would they mind if the money was stealthily "back-doored" into the stock market via the hedge funds?
This might explain why the hedge funds account for as much as 40 to 50 per cent of all trading on an average day. It also explains why the stock market is overheating.
The charade cannot go on forever. And it won't. Rate cuts do not address the underlying problem which is bad investments. The debts must be accounted for and written off. Nothing else will do. That doesn't mean that Bernanke will suddenly decide to stop savaging the dollar or flushing hundreds of billions of dollars down the investment bank toilet. He probably will. But, eventually, the blow-ups in the housing market will destabilize the financial system and send the banks and over-leveraged hedge funds sprawling. Bernanke's low interest "giveaway" will amount to nothing.
Why do the banks need such a huge infusion of credit if they are as "rock solid" as Bernanke says?
In the last two months, the pool of qualified mortgage applicants has contracted, as has the market for merger and acquisition deals (private equity). So the banks are probably doing more with the Fed's $41 billion injection than just beefing up their reserves and issuing new loans. The market analysts at Minyanville.com summed it up like this:
"Banks are taking the liquidity the Fed is forcing out there through the discount window and repos. After using it to shore up the declining value of their assets, they have excess to lend out. Finding no traditional borrowers that want to buy a house or build a factory, the new rules the Fed has set forth allows the banks to pass this liquidity onto their broker dealer subsidiaries in much greater quantities. These broker dealers are lending thus to hedge funds and margin buyers who are speculating in stocks. Remember, the Fed is powerless unless it can find people to borrow the credit it wants them to spend. By definition, the last ones willing to take that credit are the most speculative."
This is a likely scenario given the fact that the stock market continues to fly high despite the surge of bad news on everything from the falling dollar to the geopolitical rumblings in the Middle East. Last month, the Fed modified its rules so that the banks could provide resources to their off-balance sheets operations (SIVs and conduits). If the Fed is willing to rubber-stamp that type of monkey-business; then why would they mind if the money was stealthily "back-doored" into the stock market via the hedge funds?
This might explain why the hedge funds account for as much as 40 to 50 per cent of all trading on an average day. It also explains why the stock market is overheating.
The charade cannot go on forever. And it won't. Rate cuts do not address the underlying problem which is bad investments. The debts must be accounted for and written off. Nothing else will do. That doesn't mean that Bernanke will suddenly decide to stop savaging the dollar or flushing hundreds of billions of dollars down the investment bank toilet. He probably will. But, eventually, the blow-ups in the housing market will destabilize the financial system and send the banks and over-leveraged hedge funds sprawling. Bernanke's low interest "giveaway" will amount to nothing.
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Slower Growth, tighter credit, continued weakness in housing and a Fed ready to act: http://biz.yahoo.com/ap/071108/bernanke_economy.html
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"Ben Bernanke is performing brain surgery in oven mitts": http://www.bloggingstocks.com/2008/01/07/ben-bernanke-is-performing-brain-surgery-in-oven-mitts
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"Bernanke says more interest rate cuts may be needed": http://www.bloomberg.com/apps/news?pid=20601103&sid=agx2yeP4PoUI&refer=news
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The thing that makes Ben and Co . look so stupid is their mouths and this tendency they have to open them , without thinking first . They've spent billions looking for weapons of mass destruction , when they could have found it with a few phone calls and some prudent reading of the globes electric rags .
We should start a bloopers section .
Looking back a little less than a year ago we had some wonderful words of wisdom from the magic men .
Here's but a few :
March 13th , 2007 in MarketWatch article .
Treasury Secretary Henry Paulson said late Tuesday the turmoil in the subprime mortgage market is no surprise given the correction in U.S housing market. Paulson also said the fallout in subprime mortgages is "going to be painful to some lenders, but it is largely contained.”
March 26th , 2007 in Reuters article .
Problems in subprime mortgages are not spilling over to the rest of the U.S. housing market, which is in the process of stabilizing, Chicago Federal Reserve President Michael Moskow said Monday.”
.... and this ones a beauty !
March 28th , 2007 in Associated Press article .
Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that growing troubles in the market for risky mortgages thus far doesn't appear to be spreading to the overall economy but the situation bears close watching. "At this juncture ... the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained," Bernanke said in prepared testimony to Congress' Joint Economic Committee.”
We should start a bloopers section .
Looking back a little less than a year ago we had some wonderful words of wisdom from the magic men .
Here's but a few :
March 13th , 2007 in MarketWatch article .
Treasury Secretary Henry Paulson said late Tuesday the turmoil in the subprime mortgage market is no surprise given the correction in U.S housing market. Paulson also said the fallout in subprime mortgages is "going to be painful to some lenders, but it is largely contained.”
March 26th , 2007 in Reuters article .
Problems in subprime mortgages are not spilling over to the rest of the U.S. housing market, which is in the process of stabilizing, Chicago Federal Reserve President Michael Moskow said Monday.”
.... and this ones a beauty !
March 28th , 2007 in Associated Press article .
Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that growing troubles in the market for risky mortgages thus far doesn't appear to be spreading to the overall economy but the situation bears close watching. "At this juncture ... the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained," Bernanke said in prepared testimony to Congress' Joint Economic Committee.”
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Federal Reserve Chairman Ben Bernanke has warned that the outlook for the US economy is deteriorating.
He said the housing and credit market turmoil had hit the economy and added that a weak labour market could further undermine consumer spending.
Given the risks facing the economy, Mr Bernanke signalled that additional US interest rate cuts were likely.
The Central Bank began lowering the cost of borrowing in September and cut rates dramatically in January.
He said the housing and credit market turmoil had hit the economy and added that a weak labour market could further undermine consumer spending.
Given the risks facing the economy, Mr Bernanke signalled that additional US interest rate cuts were likely.
The Central Bank began lowering the cost of borrowing in September and cut rates dramatically in January.
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"Dollar falls to 3-year low versus Yen as Fed cites Trade boost": http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aIkrGtrRh6U0
Time for a bit of a laugh-
"Good morning. There has been quite some concern about the general economic outlook of America. There also has been quite some concern about the existence of inflation. We will ignore the latter for the time being, at least until Zimbabwenomics is better understood and appreciate by the public. Let’s focus on the general economic outlook, and by that, I mean the stock market.
The end of last week was not pretty and I am surprised you didn’t hear my speech on Wednesday where I hinted that, yeah, some rates are gonna be cut and I will be bathing America in cheap money. Those of you who disregarded my comments should know something that is really going to make you feel foolish, but hopefully still willing to revert to some of that good old fashioned exuberance that helps keep these markets afloat.
Friday, February 29th, doesn’t count. That’s right. Simply didn’t happen. It was the leap day of a leap year, an anomaly, and we have the ability at the Fed to strike an anomalous day from existing. We plan to utilize this power that we have at our discretion, and by open market actions, remove the existence of February 29th from the record books.
If we let Friday exist, it will distort comparisons with prior years and also it meant that markets went down a lot. And to that I say, not on my watch, sir, not on my watch. So expect all your portfolios and investments to be reset to their close of business Thursday values very soon. And remember, who loves you? I do. Thank you."
Article available at-
http://longorshortcapital.com/sorry-guys-today-didnt-happen.htm
"Good morning. There has been quite some concern about the general economic outlook of America. There also has been quite some concern about the existence of inflation. We will ignore the latter for the time being, at least until Zimbabwenomics is better understood and appreciate by the public. Let’s focus on the general economic outlook, and by that, I mean the stock market.
The end of last week was not pretty and I am surprised you didn’t hear my speech on Wednesday where I hinted that, yeah, some rates are gonna be cut and I will be bathing America in cheap money. Those of you who disregarded my comments should know something that is really going to make you feel foolish, but hopefully still willing to revert to some of that good old fashioned exuberance that helps keep these markets afloat.
Friday, February 29th, doesn’t count. That’s right. Simply didn’t happen. It was the leap day of a leap year, an anomaly, and we have the ability at the Fed to strike an anomalous day from existing. We plan to utilize this power that we have at our discretion, and by open market actions, remove the existence of February 29th from the record books.
If we let Friday exist, it will distort comparisons with prior years and also it meant that markets went down a lot. And to that I say, not on my watch, sir, not on my watch. So expect all your portfolios and investments to be reset to their close of business Thursday values very soon. And remember, who loves you? I do. Thank you."
Article available at-
http://longorshortcapital.com/sorry-guys-today-didnt-happen.htm
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Bernanke to the rescue as it looks better than expected across the great pond
: http://www.necn.com/category/32/1450
: http://www.necn.com/category/32/1450
Kauri
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If the 2nd.. of 3
.. revision to to the yanker tankers 2nd 1/2 gdp comes in at 2.5% then by the Taylor rule the rate of 2% is toooo low...
The Taylor rule is a modern monetary policy rule proposed by economist J B Taylor that stipulates how much the CB should change the nominal int. rate in response to divergences of actual GDP from potential GDP and divergences of actual rates of inflation from a target rate of inflation. The rule can be written as follows:
In this equation, it is the target short-term nominal int. rate (e.g. the Fed fund rate in the US), πt is the rate of inflation as measured by the GDP deflator,
is the desired rate of inflation,
is the assumed equilibrium real interest rate, yt is the logarithm of real GDP, and
is the logarithm of potential output, and X## is the sound of me breaking wind as determined by a linear trend (Taylor, 1993).
From Wikipedia, the free encyclopedia
Slaaaaainteeee
........................KKKauri
.. revision to to the yanker tankers 2nd 1/2 gdp comes in at 2.5% then by the Taylor rule the rate of 2% is toooo low... The Taylor rule is a modern monetary policy rule proposed by economist J B Taylor that stipulates how much the CB should change the nominal int. rate in response to divergences of actual GDP from potential GDP and divergences of actual rates of inflation from a target rate of inflation. The rule can be written as follows:
In this equation, it is the target short-term nominal int. rate (e.g. the Fed fund rate in the US), πt is the rate of inflation as measured by the GDP deflator,
From Wikipedia, the free encyclopedia
Slaaaaainteeee
........................KKKauri
Kauri
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If the 2nd.. of 3
The Taylor rule is a modern monetary policy rule proposed by economist J B Taylor that stipulates how much the CB should change the nominal int. rate in response to divergences of actual GDP from potential GDP and divergences of actual rates of inflation from a target rate of inflation. The rule can be written as follows:
In this equation, it is the target short-term nominal int. rate (e.g. the Fed fund rate in the US), πt is the rate of inflation as measured by the GDP deflator,is the desired rate of inflation,
is the assumed equilibrium real interest rate, yt is the logarithm of real GDP, and
is the logarithm of potential output, and X## is the sound of me breaking wind as determined by a linear trend (Taylor, 1993).
From Wikipedia, the free encyclopedia
Slaaaaainteeee
........................KKKauri
well... what do you know... Q2 GDP grew at a 3.3% annual rate, up
from a 1.9% AR in the advance estimate.
Cheering
Slanting
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Basically: Bernanke speaks: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ar0RwycsB4_4
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Bernanke Begins 'Thorough review of Fed Disclosure.'
http://www.bloomberg.com/apps/news?pid=20601087&sid=adhpRsPpINDA&refer=home
http://www.bloomberg.com/apps/news?pid=20601087&sid=adhpRsPpINDA&refer=home
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Another motherlode of "Bernanke Wankee...."
You can always trust an "internal review" to offer up the truth of the matter....to be sure to be sure.
The last couple of paras sums it all up nicely...
"The court's in session, here come da judge, here come da judge...."
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The Americans seem to have confidence in Ben Bernanke but seem to believe that there is no way of avoiding continued recession with some prospects of a 30% downturn.Another motherlode of "Bernanke Wankee...."
You can always trust an "internal review" to offer up the truth of the matter....to be sure to be sure.
The last couple of paras sums it all up nicely...[/i]
Just accept it, I think he was saying between the lines, I'll do my best for you Guys but the lifts going down, I can't stop it.
(Australia needs to take more action as Bank write downs are going to come thick and fast. Interest rates far too high at 3.25% and a $46 million stimulus just not enough by far, imho.)
