http://www.facebook.com/tos.php?api_key=bca707d76dc9d70695d7674bad8284d3&next=http%3A%2F%2F208.85.146.37%2Fq%2F106627%2F%3Fref%3Dnf&v=1.0&canvas#/photo.php?pid=1415591&id=653987458&ref=mf

This is great. Take a look.

I really enjoyed the interview. It was positioned directly to calm people and provide a sense of trust that the Fed / President are in the peoples court.

Often I read the comments on this site and am astonished at how cynical many are. It astounds me that a country that voted in a President on the platform of hope, can’t see that so much of the current problem is derived from fear and anxiety.

Of course the basis of mess is real, the Chairman of the Federal Reserve – Mr. Bernanke – has me feeling much more comfortable that a depression has been overted. That he is going to bring the ship into safe harbor.

The mess of Wwallstreet is not going to be fixed on wall street. It is going to be fixed with the wider public has faith in their future. The banks lending again will give people a sense that the world is not going to end.

Count me in with a huge amount of respect for Mr. Bernanke. I wish him good-luck and God-speed.

The interview indicates that Bernanke seems to believes fixing banking will fix the problem (ie, there is a demand for credit that isn’t being met due to mispricings, fear, etc) The perspective of BR and some other astute people is there is not a demand for credit, that the engine (the consumer) is satiated, and therefore has led to supply imbalances, etc…

I tend to be in the camp of BR. Know too many people who, even if the “price was right” have no interest in a car, if the mortgage rate was low enough would not buy a house, and have managed to by every ticky tacky think they wanted or needed over the past 5years… People look around and have said, “enough”… or they fear that their job is no longer secure.

Look, this isn’t just the run of the mill economic pull back. All classes have been affected. No, really, all classes have been affected. Ok, Bill Gates is all right, but I hear he is looking at a Mac…

We are in the Springbreak cycle in our schools. I’m hearing a lot more about “stickin’ around, and daytrips, and less of the annual Florida trip. Or if they’re going somewhere now, they are cutting back in the summer…

This is a cycle that is hard to snap. Next thing you know, people are thinking “hey, that wasn’t bad–we still had fun” People are less worried about the Joneses and keepin’ up.

Now, maybe BR and others are wrong and there is some clearing price at which people can just not help themselves and have to buy stuff regardless of their level of debt and current economic situation. But that just sounds like the way people used to think advertising worked, a magic arrow that caused an uncontrollable urge to buy… it just aint so.

Thirty year fixed mortgage rates are well below 5% in our area (non-Jumbo), but few than half the population can qualify for this rate. Even if you’ve paid your bills and are timely on credit cards, the precautionary move by many credit issuers to lower credit ceilings has changed people’s debt to available credit ratios to the worse–giving them worse credit scores. What a pickle.

Anyhow, people need to take a breath, quite being so angry and hateful, and see what positive things you can do to help. If you aren’t helping, you are just in the way.

If a combination of the Fed, Treasury, Barney Frank and the White House can reflate asset prices just by talking and not using my tax dollars in a multitude of failed strategies, then I am all for them talking all they want. Government cheerleading will work until it doesn’t. The US economy is fundamentally sound unless it isn’t.

My point is that HOPE is not an investment strategy. Hoping in the Fed to fix the very mess they fostered is not a good strategy. Today’s market action was instructive. Up on HOPE (Fed), then down on REALITY (AMEX). More reality to come . . . .

Yet another colossal waste of the ether.

From all the remarks above, I made far better use of my time watchin’ a TIVOed episode of “Breaking Bad”.

Ben, you are Pinocchio by any other name.

March 16th, 2009 at 1:03 pm
Bernanke appearing on 60 Minutes is rare, but not good news. This is more desparation

……Sure there’s an element of infomercial about it but what ‘s wrong with that given the amount of misinformation out there including here at times with folks who have pretensions to being economically literate….There’s nothing new about the chairman of the fed sounding optimistic….seems to be working….Dow up about 2%

“Some observers have expressed concern about rising levels of household debt, and we at the Federal Reserve follow these developments closely. However, concerns about debt growth should be allayed by the fact that household assets (particularly housing wealth) have risen even more quickly than household liabilities. Indeed, the ratio of household net worth to household income has been rising smartly and currently stands at 5.4, well above its long-run average of about 4.8. With real disposable income having risen over the past few quarters, most consumers are in good financial shape—a positive indication for household spending. One caveat for the future is that the recent rapid escalation in house prices—11 percent in 2004, according to the repeat-transactions index constructed by the Office of Federal Housing Enterprise Oversight—is unlikely to continue. A plausible scenario is that house prices will either move sideways or rise more slowly during the next few years, eventually bringing the rate of return on housing in line with the relatively low prospective rates of return that we currently observe on virtually all assets, both real and financial. If the increases in house prices begin to moderate as expected, the resulting slowdown in household wealth accumulation should lead ultimately to somewhat slower growth in consumer spending.”

His actual track record speaks for itself. He only keeps his job if he sees recovery just around the corner (at all times) and makes us all believe that the Fed knows what it is doing (nice actual track record there too, eh?).

Bernanke appearing on 60 Minutes is rare, but not good news. This is more desparation . . . .

1. Why was AIG worth saving but Lehman wasn’t? Neither firm was under the Fed’s regulatory framework, yet $160B was spent on AIG propping it up.

Potential response from Bernanke: We had decided that Lehman was our line in the sand, and let it fail. And then realized we had utterly screwed the financial system.

2. You have claimed that there are no zombie banks, including “stealth” banks like AIG. How can that be right with $160B spent to prop up AIG?

Potential response from Bernanke: I’m lying for the cameras with a straight face because I don’t want to bring the financial system down. Clearly I should have saved Lehman, I am now depending on the lack of collateral to explain why the Fed didn’t. I admit that is a canard.

3. Do you have a plan to get the economy going?

Potential response from Bernanke: Yes, but the new Administration and the Fed are having a lot of trouble getting confidence back, and we also really don’t have a plan that Congress can get behind due to public anger and misconception about the role of banking in the economy.

4. Should the folks who got us in this sh-tshow get bonuses?

Potential response from Bernanke: Very tough one. Lots of folks made a lot of money, which of course the public is angry over payouts (understandably). They also got killed with the market downturn in financial stocks, which accounted for 50%+ of their comp, and is now worth 10% of what they got paid in stock.

I wish that the Congress would at least admit that some got hurt personally on the stock and bonus, which was the majority of their comp, and they did nothing wrong.

Some can leave to other, more remunerative jobs, which applies to the top folks, not the middle or junior ranks. But even the top folks are finding it difficult.

5. Are you freaking out about the financial situation?

Potential response from Bernanke: Yes. But don’t quote me.

It’s as if we just discovered AIDS yesterday and the idiots are screaming their heads off that we don’t have a plan for curing it by noon today!