Defending Bernanke

Randall Forsyth does a good job explaining what FOMC Chair Ben Bernanke has done right:

"Yet much of the criticism seems unfair and after the fact. Not only have Bernanke’s unorthodox moves staved off a full-fledged financial meltdown, but they also have done so while reducing the inflation risks inherent in the traditional policy response of merely slashing interest rates.

That’s not my opinion. It is the one rendered by the currency, credit, Treasury, equity and gold markets. Since the credit crisis peaked (or reached its nadir, depending on your point of view) on St. Patrick’s Day, the Monday after the Sunday night special with the Bear takeover by JPMorgan Chase, the extreme tensions in all those markets have eased.

It was not just the Bear deal per se. The Fed established the Primary Dealer Credit Facility, which let Wall Street investment firms to borrow from the central bank, a privilege reserved for commercial banks, except for the rarest instances in the Great Depression.

The PDCF joined other, new Fed instruments to funnel liquidity where it was needed most. Last December, the central bank began the Term Auction Facility, or TAF, which permitted banks to borrow anonymously for longer periods than via the traditional discount window borrowings, which were to cover overnight shortfalls. TAF also permitted borrowing against lesser-quality but still prime collateral.

The Fed also established the Term Securities Lending Facility, which allowed banks and dealers to swap their illiquid but high-quality government and mortgage-backed securities for Treasuries. It was like a pawnshop for the financial system, allowing Wall Street to exchange their (real, not fake) Rolexes for good-as-cash obligations of Uncle Sam."

What say ye? How much of the benefit of the doubt do you want to give Ben Bernanke?

Hey, Bernanke Bashers: His Moves Have Been the Right Ones
Barron’s April 29, 2008

Category: Commodities, Federal Reserve, Inflation, M&A


Category: Federal Reserve, Psychology

Yahoo Tech Ticker

Category: Economy, Federal Reserve, Inflation

Worldwide Fertilizer Usage

Category: Commodities, Data Analysis

Congratulations! Its a Recession!

Category: Data Analysis, Economy, Inflation

GDP is . . . 0.6%

Category: Data Analysis, Economy

GDP, Inflation & Recession

Category: Data Analysis, Economy, Inflation

Video: Bear Stearns Bailout “Worst Fed Mistake in a Generation”

Category: Derivatives, Federal Reserve, Financial Press

Business Video

You may have noticed that I run a bit of video a few days a week on the site, usually overnight.

As part of the redesign, I am setting up a tab for Video (hence, the slow loading video won’t impact the main page). As such, I have been compiling a list of Business-related Video for the update, and this is what I came up with. 

(Have I missed anything significant?)

Video Reports:

Financial Times (FT)





Business of Innovation





Yahoo Finance Tech Ticker TV

CNN Money

New York Times

BBC tv

Fox Business


60 Minutes

CNET Video


Category: Television, Video

Media Appearance: CNN Money (04/29/08)

Category: Inflation, Media