What's Ben Selling?
Fed Chairman: Recovery on Track (CNBC)
That was the take of the MSM of Ben Bernanke’s words over the past few days. To some extent Ben’s soft talk has had a beneficial impact. “Soothing” was how Paul Mccully from PIMCO described it. But the market overall does not seem to be listening. The NY close stank. Currencies, bonds and stocks moved to risk off mode again.
I heard different words from Bernanke. I heard him say:
We have been in an environment of crisis/emergency monetary and fiscal policy for two years. We have ZIRP, QE, stimulus, 10% deficits and total debt exploding.
Bernanke said again today that these emergency responses must be continued far into the future. This high-octane life support is essential to keep the patient alive. Never before in history has so much gas been thrown on a financial fire. And if you believe Ben, we have to continue doing that or we die.
The reason the markets are punky in spite of the all pro MSM cheer leading and those "soothing" words from the Chairman is that the markets are not buying Ben’s words. They shouldn’t. Ben should take note of the reaction. At least he would better understand what he is up against.
My read and apparently the market’s is:
When Ben can stand before the cameras and put his policies where his mouth is by ending the emergency monetary steps and work with other leaders toward a more balanced fiscal approach the markets will listen and respond. In the meantime he is not going to fool the audience that really matters. That audience is the capital markets, they are not buying what Bernanke’s selling.
That was the take of the MSM of Ben Bernanke’s words over the past few days. To some extent Ben’s soft talk has had a beneficial impact. “Soothing” was how Paul Mccully from PIMCO described it. But the market overall does not seem to be listening. The NY close stank. Currencies, bonds and stocks moved to risk off mode again.
I heard different words from Bernanke. I heard him say:
“Now is not the time to change monetary policy or raise taxes.”
We have been in an environment of crisis/emergency monetary and fiscal policy for two years. We have ZIRP, QE, stimulus, 10% deficits and total debt exploding.
Bernanke said again today that these emergency responses must be continued far into the future. This high-octane life support is essential to keep the patient alive. Never before in history has so much gas been thrown on a financial fire. And if you believe Ben, we have to continue doing that or we die.
The reason the markets are punky in spite of the all pro MSM cheer leading and those "soothing" words from the Chairman is that the markets are not buying Ben’s words. They shouldn’t. Ben should take note of the reaction. At least he would better understand what he is up against.
My read and apparently the market’s is:
If the patient needs life support, then the patient is by definition not well.
When Ben can stand before the cameras and put his policies where his mouth is by ending the emergency monetary steps and work with other leaders toward a more balanced fiscal approach the markets will listen and respond. In the meantime he is not going to fool the audience that really matters. That audience is the capital markets, they are not buying what Bernanke’s selling.
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