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justme
@
2007 Dec 17, 3:56am
Be careful what you wish for, we could get another cooky crook like Greenspan again.
Honestly, SIBA, I seriously doubt that whomever happens to be in charge of the Fed on any day cares one iota about what media commentators, worker peons or bloggers like us think about them. The only "respect" that seems to matter to elites like Greenspan & Bernanke is the respect of Wall Street and the banksters --and they get that in spades with every fresh new bailout plan, FF/discount rate-cut, or "liquidity injection".
The Fed will try to re-inflate the credit bubble and prop-up housing prices with ill advised policies that rewards bad decision making by lenders and borrowers alike. In "the end", their efforts will fail of course (as in Japan), but not before inflicting considerable damage on the rest of us blameless non-participants, and artificially extending the correction phase of the business cycle far beyond the time it would have taken on its own. And let's not forget that in the long run, we're all dead.
How far will "teaser freezers" and ZIRP-style policies drag out the correction? Who knows? It took 16 years in Japan (and still counting?), though luckily for us, their bubble was far larger. Anyone here care to wait an *additional* 5 years before you can buy a reasonably priced house? Too bad for you, you bankster freedom-hater, you.
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It was always known that Mr Bernanke will have one tough job as the Fed Chairman. The bubble was already at the bursting stage when he took over, and there wasn't any way he (or anyone else) could have kept it going. His real task and challenge was to limit the fallout.
How has he done ? I would say very poorly.
I have no misconceptions about the difficulty of his job. The balance between slowing the damage from the credit crunch, falling USD, rising commodity prices and most difficult - the different expectations of groups with vested political and financial interests. With politicians breathing down his neck, he is in a situation where it is impossible to not antagonize someone.
But the Fed under his watch is turning out to be a PR disaster. The slashing of discount rate on an option expiry day in August was ridiculous and was criticized very strongly. Just last week, the market dropped after the small rate cut, and next day there was an announcement of the TAF (Temporary Auction Facility). The move was in plan for some time, but the timing of announcement creates a perception that Fed is scared of market drops.
Here is one quote from MSN Investor's daily dispatches.
Newsletter writer Tom McClellan of McClellan's Market Report said the Fed's clumsy moves "introduces a new type of risk, which is that we have a central bank in the U.S. which cannot walk and chew gum at the same time."
And another
Dennis Gartman of the Gartman Letter said he'd lost confidence in Fed Chairman Ben Bernanke.
Quite simply, the Fed is losing respect. My bet is after one year, and in less than 2 years, the new Government will appoint a new Fed Chairman. Unless Ben get's his PR act together, which is not very likely if past is any indicator.
StuckInBA