The talking heads (and writers) in the financial world are starting to admit Ben got punked. The melt down wasn't the US economy, it was the unwinding of a $7 billion fraud. oops - but the press is great to read.
From the Dow Jones Newswire:
One market professional who went on the record about the likelihood of
Chairman Bernanke's having been euchred into a rate cut by Societe Generale's
one-off fire sale told The Wall Street Journal:
"I think Mr. Bernanke is clearly a very bright guy but he lacks the market
savvy" that former Fed head Paul Volcker had, said Jeff Saut, head of
investment strategy at Raymond James.
More below:
And the other banks are showing the true opinion of Ben - the EU Bank, the Japanese Central bank, what have they done? No interest rate cut. If things were so bad (note their markets tanked too) why did they sit tight?
Because they saw that if Ben got punked, their markets would be covered by the US recovery and they could avoid the massive inflationary boost of the big cut. Gee, maybe they know something Ben didn't.
Plus, it is coming out that the French central bank people knew last week that SocGen had a problem. Either Ben knew this and panicked anyway or, worse, the French thought so little of the US that it slipped their mind to mention it to the Fed - either way that is a dis of major proportions.
Anyway, nice to know the world financial traders now know who the fool at the table is. Unfortunately for the US citizen, it is the guy who controls our economy and printing presses for the paper. This is like giving your house payment money to a gambling addict and saying "have at it".
God, I am getting even more depressed today.
Updated My favorite industry email of the day yesterday:
"I'm waiting to see Goldman Sachs' announcement that they had an unexpected $7.1 billion profit in trading last quarter."