Bernanke: Downside Risks Have Faded…..Uhhhh Ok

June 10, 2008 2:06 AM

I believe none of this nonsense like not at all. Bernanke was speaking tonight and said that the “downside risk to the economy appears to have faded.” He might have been thinking, the downside risks to the economy have faded - other than real incomes are falling, other than consumer debt levels are at all time highs, other than we have the worst housing crisis in history, other than manufacturing is at an all time low, other than the dollar is at an all time low, other than we have a negative savings rate…..well, you get the picture, all is rosy.

This might also be credible except for the fact that Paulson called a bottom in housing over a year ago, and 11 months ago, and 10 months ago…you get the picture. Each and every time I thought…you are dead wrong. The reality is he cannot come out and say “housing is going to plunge for years”, even if it was obviously true.

The Fed cannot paint a bleak picture of the economy or it will just compound the problem. It is a self fulfilling prophecy. They have no choice but to spin it the best they can. If we were facing a depression, he would say “the outlook near term looks sluggish but longer term appears robust and we should rebound “. Yeah ok. Wake me when you have something meaningful - or truthful - to say. He is worried, and very worried, and i could see it in his eyes in front of Congress. He knows he needs time because of Greenspan’s enormous mistakes. Greenspan oversaw the largest asset bubbles in the history of the world and not only did zero, he made them far worse. If that is brilliance please send me a check for $1 Billion. I deserve it.

How Greenspan is still viewed as even a decent Fed Chairmen, let alone a great one defies logic, common sense or quite frankly, fact. His nonsensical comments after that “government cannot predict or conrol asset bubbles” is both idiotic and wrong. No, it was you that could not foresee or control asset bubbles, not anyone else. Both the stock bubble and especially the housing bubble (the largest asset bubble the world has ever seen) could have been controlled VERY easily. By the very mechanism you were SUPPOSED to be watching - CREDIT.

Oh, and please do not comment ever again on “there is a 50% chance of recession”. First, if we have a recession/depression, it is on your watch. Second, the first recession you have accurately predicted will be your first.

Sorry for the rant, but all of these problems could have been easily avoided, literally, if we had a chairmen that wasn’t 100% asleep at the wheel for 10 years. I think we should begin a new debate, who would have been a better chairmen in the height of the housing bubble: Greenspan or Leonard The Monkey. I would take the monkey hands down.

Written by Tom@StockBlade.com · Filed Under General Investing/Trading Commentary

Comments

2 Responses to “Bernanke: Downside Risks Have Faded…..Uhhhh Ok”

Henry Horschel on June 10th, 2008 3:25 am

Heavy control, like oil going up because the little guy is buying put’s on USO. It’s being manipulated, with news and false numbers because so much put buying. They hype to get investors to buy options.imo
Tom@StockBlade.com on June 12th, 2008 1:34 am

Hmm, i just get going on Greenspan. Not only was he not a decent chairmen, IMO, he was horrible, possibly one of the worst in history. He oversaw the 2 largest asset bubbles in the history of the world and he did ZERO. Not only did he do nothing in the housing bubble, he made it far, far worse by advocating the benefits of “exotic arms” at the height of the bubble. What a complete moron. Leonard The Monkey could have done FAR better at least he would have kept his mouth shut and not made matters worse.

His mistakes could possibly create a legit depression and it was all because of ego, IMO.

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