It’s More Akin To Printing Money

By Mar 16, 2009, 12:32 PM Author's Blog  

I shuddered a little bit when Bernanke said that on 60 Minutes last night. I realize the Fed has been printing money to try to fix this but there was something about hearing him say it…did you get a similar feeling?

I was struck by a couple of things from the interview. He recycled a couple of nuggets like the burning house analogy and he said again how angry the AIG situation made him. He said this before of course but that just seems like an odd thing for the situation; anger. I’d rather the Fed Chairman was a robot in terms of emotion.

The world is microscopically dissecting everything he says and so the points I make above probably mean nothing but still…

That none of the banks will fail is good for main street of course but he seems to have no allegiance to stock prices of any of the banks, not that he should. A winding down of a financial institution as appears to be happening with AIG will probably leave other stocks at zero or taken over close to zero like Bear Stearns and Washington Mutual.

“Green chutes” notwithstanding I did not get the feeling that this will be over soon. Not over soon does not have to mean everything gets worse although it seems like unemployment will indeed get worse. Between here and the resolution there will be ups and downs in the market (don’t laugh, I mean the potential for big moves in both directions that make navigation difficult and weighs emotionally on people) and the eventual real turn around will be met with disbelief.

What did you think about Bernanke last night?

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