Too much corn pone personal story, not enough real interview. But I must say, Bernanke is either an astoundingly self contained man or is on the best meds modern science has to offer.
Paul Kedrosky thinks this appearance is either wildly bullish or wildly bearish, and is somewhat inclined to the former view. I see this as enough of a departure from normal Fed rectitude to be Not a Good Sign, but I do have a nose for trouble.
The folks at One Salient Oversight commented on Bernanke’s end of recession call in this broadcast:
Given that in 2005 Bernanke said there was no housing bubble and in 2007 he said that any damage from the housing bubble would be contained, can we therefore trust in Bernanke’s predictions?
I suppose we could use it as a negative indicator and conclude beyond reasonable doubt that the recession WON’T end this year?
2005 comment:
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html2007 comment:
http://www.federalreserve.gov/newsevents/testimony/bernanke20070328a.htmThe only option I see is for Bernanke to jump or for someone to push him.
Australians do tend to be more bloody-minded about such things than we are. However, just as telling is the fact after each major intervention in the crisis, the Fed (in conjunction with the Treasury) figured it had the crisis licked. There was a lack of additional contingency planning until a new emergency erupted.
Part I
Part II
33 comments
Comments are closed.
The big banks are solvent? eh hmm…
All I can say is I look forward to the follow-up interview a year from now.
Yves,
I laughed at your comments about Bernanke possibly being on real good drugs because I had the same thought after hearing him. The other options of him being delusional or a consumate liar just didn’t seem to work for me.
It could be a combination though.
Can we hold his words against him in a court of law if they turn out to be as delusional as they seem in 9 months?
psychohistorian
i guess we all have to be in soup lines before we all collectively start thinking “Gee, this guy couldn’t see an obvious housing bubble, said things were “self contained” apparently didn’t know or care about banks dealing in CDS,CDO, SIV, ABCDEFG… ad infinitum”
Are there deals where interviewers understand that they can’t ask any critical questions??? It never occurred to Pelley to list all Bernanke’s Wrong predictions and ask, “why should we believe you when you have been demonstratably wrong on every major issue?”
That wasn’t a softball interview. It didn’t rise to the level of softball. It wasn’t even a cream puff interview. It was more like the kind of thing they used to do on Soviet state TV. It reminded me somewhat of the media puffing the Clintonoids, but worse. Please Lord, let the Obama effect wear off soon.
Why don’t they call it the Federal Reserve Corporation, so that the supernatural aura it has cultivated, ends the kowtowing?
Nothing ever good comes from blind faith
I bought some new cookies form the Girl Scouts… not all that good. I don’t even like cookies especially, but they have this aura of being born from the good will of the world’s young girls, handed down from an omnipotent transcendent authority, delivered with unyielding momentum, unwavering refusal of noncompliance, compelling submission, surrender… undeniable. I can’t even say the name of the ‘meh’ brand, or speak to dissatisfaction. See what blind faith manifests in man?
I lived through Finland’s depression in the early 1990s and one of the things I remember very vividly was how politicians and civil servants would keep saying it’s going to turn soon. It was absurd how they kept going for years. And as if they hadn’t realized we the people had cottoned on long since they kept up the same mantra when it came to balancing the budget. I understand that politicians and civil servants are in a position where they don’t want to undermine confidence, but it becomes a running joke after a while.
Anyway, America should be so lucky if the recession/depression is over before 2011. A banking crisis takes a long time to sort out.
This guy is sailing around the world in his head, we are just phantoms in the fog.
Grosse Pointe….Nero would be proud.
Yves said: “But I must say, Bernanke is either an astoundingly self contained man or is on the best meds modern science has to offer.”
Bernanke’s blink rate seems to be about half that of his interviewer, suggesting to me that he is taking a highly lipid soluble beta blocker like propranolol or oxyprenolol. These are commonly prescribed to control hypertension (and commonly taken by public speakers and muscians to block the effects of adrenaline). Propranolol et al are banned in the Olympics because they make shooters TOO calm and tremor-free.
“Prosperity is just around the corner.”
Looked like the Bernanke I’ve
seen in any other public appearance.
What I took away from the interview
is that they are resolute that
the financial system -saving the banks – will be the absolute focus.
Make of that what you will.
The federal reserve building itself
looked like it could withstand the
gales of hell.
I’m surprised that people saw Bernanke as calm. I thought he looked quite uneasy and exhibited some trembling, with occasional wet eyes. Seemed to me like he was lying (but that may be my ears at work rather than my eyes.)
Ben Bernanke
Needs a hankie.
We see now that we need to fear
Our anger may cause him to tear.
“Don’t be mad
I’ve not been bad–
Chinese savers’ excess dough
Forced us to this horror show.”
“But I’m so mad at AIG
(They’ve acted just so piggishly)
I’ll feed them extra carefully!”
It was more like the kind of thing they used to do on Soviet state TV.
So are the numbers issued by the Bureau of Labor Statistics.
This interview was clearly for the masses. I can’t see how it could reassure experienced market participants.
I think the main point of the interview was to make the case to the public that more support would be needed for the banks and that it is imperative that the populace support this.
For example, when asked when this would end and whether we will have a depression, he said, It when end only if we have a functioning financial system. He also said his great worry is that we lack the political will to fix the situation.
So I think he is basically trying to get the people to turn away from the Republican point of view that we need to stop all the bailouts and let the bankers suffer.
His analogy about the neighboring smoking in bed is pretty stupid.
Bernanke reports from the Titanic: smooth sailing ahead!!
Could it be that they have called on David Axelrod to save the economy ?
David said…
“I think the main point of the interview was to make the case to the public that more support would be needed for the banks and that it is imperative that the populace support this.”
I agree. Bernanke seems to come from a highly doctriaire place, a universe where the only thing that matters is that the big banks must be saved, and saved at any and all costs. That this might murder the economy for years to come, or that this might fly in the face of the morals of 99% of Americans, doesn’t seem to register with him.
This veneration of banking and finance at the expense of any and all other considerations is the trademark of an empire in decline. As Kevin Phillips wrote in Bad Money:
No previous leading world economic power has enjoyed a full-fledged manufacturing renaisaissance after becoming unduly enamored of finance.
Phillips goes on to quote Joseph Chamberlain, the British colonial secretary, who made the following statement to a gathering of bankers in 1904:
Granted that you are the clearing house of the world, [but] are you entirely beyond anxiety as to the permancene of your great position?…Banking is not the creator of our prosperity, but is the creation of it. It is not the cause of our wealth, but it is the consequence of our wealth.
“His analogy about the neighboring smoking in bed is pretty stupid.”
Yea, especially when you consider the guy smoking in bed was the Fire Chief, and Bernanke thinks he should keep his job.
I agree with David that Bernanke was on 60M to build public support for more bailouts. Sheila Bair was on last week too.
But was I the only one noticing Ben’s quivering upper lip? That was one nervous dude. And when he was asked about inflation coming in the future I saw a micro-expression flash. So I’m guessing maybe he thinks there’s a chance we should invest in wheel barrels.
Fewer and fewer serious comments, where are all the intelligent guys went?
Retired doctors(and janitors) with (now)101K’s need just the interview that Bernanke gave.They are scared and they don’t know finance.A technical reference talk would not have done it.If everyone will predict a 2010 recovery,then it will happen(RE: Rev.Norman Vincent Peale)
It looks like most of the comments here are focused on what Bernanke said or his mannerisms or what have you, but what I noticed most is something that Michael Shedlock writes about today = where was all the hard-hitting questioning? It really says something about journalism today when the only person asking such tough questions is Jon Stewart.
Hilarious comments in this thread: the one asserting that masses are not “market participants,” and the other asserting that the media fluffs “Clintonoids.”
I’ll take this possibly medicated, possibly less clueful Ben than this type of elitist thinking anyday.
Finally, Bernanke’s smoking metaphor is simplistic, but essentially correct. Unless you think that regular folks aren’t “market participants.”
The same nonsense about the global savings glut…
JGU said…
Fewer and fewer serious comments, where are all the intelligent guys went?
….
They all left on the good ship lolliepop and sailed right off the flat world that Reagan and his followers have created.
I can’t believe you and Paul completely missed the point of the hometown visit and discussion. It wasn’t just a “middle-brow television style” waste of time, it was a very explicit attempt to get the burst the “ivory tower” bubble and show that we have a guy in charge who “gets” that real, and bad, things are happening to real people. To me it made that case terrifically, and I’m as cynical as they come.
I didn’t know Bernanke had worked as a waiter in a Mexican restaurant. And I’ll admit to being comforted by that, because I think it means he WILL do whatever’s possible not just to save BofA, but to get credit flowing again, to keep interest rates low, and most of all, that some part of him hurts that so many regular people are hurting. I for one was very glad to see that, especially because I think Geithner’s all the opposite: an arrogant little prick who doesn’t listen to anyone and whose perpetually confusing and relentless drive to avoid nationalization could sink the whole ship.
The most frightening part of it was when he said his biggest fear was the political system stonewalling getting anything done. Because I think with psychopaths like McConnell, Boehner, and McCain wielding any kind of power in the process, that’s exactly what’ll happen.
What would you have liked to hear Ben say?
“Sorry folks, its broke and we can’t fix it. Buy gold, buy food, buy ammo. Its everyman for himself”
Personally, I prefer they keep the charade going for as long as possible.
Fed Chairman Ben S. Bernanke’s BIG LIE, “… we have no choice but to stabilize [AIG], or else risk enormous impact, not just in the financial system, but on the whole U.S. economy.” Equating saving AIG, Citigroup and BofA with saving the entire financial system is bunk. We have 8,000 banks, two banks and one insurance company will not be missed. Let zombie banks die or Bernanke will condemn the US to a Japanese style lost decade. Stop using taxpayer money to prop up directors, managers, stockholders and bondholders of failed financial institutions. The pain is coming, the only question is: who will bear it, taxpayers or risk takers.
It’s impossible to admire the man, extremely difficult even to respect him.
Paul Kedrosky thinks this appearance is either wildly bullish or wildly bearish,…
He has it narrowed down then.
What would you have liked to hear Ben say?
How about:
“I stuffed up big time. I wish I had seen this coming. I resign.”
Really good drugs and Botox came to my mind.
The way he qualified everything with “I believe” sure made me a believer.
Now. Can anyone tell me why Brooksley Born is not getting a ticker-tape parade down Madison Avenue? Maybe she’s on honeymoon with Kyle Bass?
Really good drugs and Botox came to my mind.
The way he qualified everything with “I believe” sure made me a believer.
Now. Can anyone tell me why Brooksley Born is not getting a ticker-tape parade down Madison Avenue? Maybe she’s on honeymoon with Kyle Bass?
RN
Google: Barnake Dillon SC
There are WaPo & WSJ articles from a few years ago.