Why Bernanke Was Wrong - Motley Fool

[Rubber Duck]

Some Interesting comment here:

On that day, we learned for certain what many of us had long been suspecting. The current Federal Reserve under Chairman Ben "Helicopter" Bernanke:

* Answers to Wall Street banks and Jim "Mad Money" Cramer.
* Is spurred to action by stock market gyrations.
* Acts directly contrary to its primary duty of fighting inflation.
* Wants to "help" by trying to reinflate the bursting housing bubble.

...In years gone by, aggressive rate cuts helped stimulate the American economy by encouraging domestic investment and spending. That worked wonders when manufacturing and consumption were heavily centered in the United States. These days, however, the rules of the global game have changed. A policy that may have worked years ago will fail in today's globalized economy. As a result of continued Fed missteps, capital is clearly fleeing the U.S. for more lucrative opportunities abroad...

.....That's why, at Motley Fool Global Gains, we believe that every American investor must have exposure to foreign economies

http://www.fool.com/investing/international/2008/01/23/why-bernanke-was-wrong.aspx

[bwhhisc]

QUOTES...from article about the US economy:

"Lost in all of the banking panic is that the real economy is turning in impressive results"

"Aside from people who borrowed too much to buy homes they couldn't afford and banks that devised
too-clever derivative securities to try to pass on the risks, the overall economy is not so horribly off-track."

Not sure IMO that this is the picture moving forward!~

[Rubber Duck]

QUOTES...from article about the US economy:

"Lost in all of the banking panic is that the real (US) economy is turning in impressive results"

"Aside from people who borrowed too much to buy homes they couldn't afford and banks that devised too-clever derivative securities to try to pass on the risks, the overall economy is not so horribly off-track."

Yes, those comments do rather undermine the guy's credibility somewhat! :p

[bwhhisc]

Yes, those comments do rather undermine the guys credibility somewhat! :p
Actually, his article is a come on for his service of selling advice for where to invest in the stock market.
Over a long period, the track record at the Motley Fool is very good, but I don't think the stock market is the place to be.
To quote Jim Cramers famous line, the economy IMO is heading for "the house of pain".

[Rubber Duck]

Actually, his article is a come on for his service of selling advice for where to invest in the stock market.
Over a long period, the track record at the Motley Fool is very good, but I don't think the stock market is the place to be.
To quote Jim Cramers famous line, the economy IMO is heading for "the house of pain".

This is a good commentary from the FT:

http://www.ft.com/cms/s/0/f49c67e8-caa7-11dc-a960-000077b07658.html

My pick:

"Furthermore, the domestic political pressures on the Fed are stronger. The US is the epicentre of the current economic storm: it is there that the subprime crisis began; it is there, too, that house prices have already fallen significantly. Americans also expect their monetary and fiscal authorities to try to eliminate even the risk of significant slowdowns. For this very reason the Fed has a mandate to seek maximum employment, while the Bank’s primary objective is its explicit inflation target."

My perception is that Recessions are necessary. They provide corrections that are essential to development. Trying to keep an Aeroplane permanently in the Air is possibly not a clever thing to try to do! I think Bernanke is trying to buck the market. I think it will come back and bite his arse.

[bwhhisc]

My perception is that Recessions are necessary. They provide corrections that are essential to development. Trying to keep an Aeroplane permanently in the Air is possibly not a clever thing to try to do! I think Bernanke is trying to buck the market. I think it will come back and bite his arse.
People just need to quit living on credit they aren't going to be able to pay back for years and years.
It's now clear why the banks lobbied for changes to personal bankrupcy laws a few short years back. :p

[Rubber Duck]

People just need to quit living on credit they aren't going to be able to pay back for years and years.
It's now clear why the banks lobbied for changes to personal bankrupcy laws a few short years back. :p

Yep, and that includes US Presidents. :p

[bwhhisc]

Yep, and that includes US Presidents. :p
Amen.

[touchring]

Over a long period, the track record at the Motley Fool is very good, but I don't think the stock market is the place to be.
To quote Jim Cramers famous line, the economy IMO is heading for "the house of pain".



If stocks fall out of fashion, I don't mind buying google at one hundred fifty bucks. :o

[jose]

The subprime for Dummies: http://news.bbc.co.uk/1/hi/business/7073131.stm

And for the ones who missed it: http://www.youtube.com/watch?v=I20lMyYW83E

And, have you heard this theory: Did SocGen trades trigger market rout, Fed cut?
http://news.yahoo.com/s/nm/20080124/ts_nm/socgen_markets_dc

[Drewbert]

GWB early Jan 2008: "The economy is strong"

GWB a few days later: "Sorry I can't come to the phone right now, I'm in crisis talks with the congress, desperately trying to stave off a recession."

EVERY business venture Dubya tried b4 he went into politics either failed, or had to be bailed out by Daddy's rich friends. Now he's done it to the entire country.

The first bank closure since 1994 just occurred with the FDC appointed as liquidator. Get ready for the rush...

[Rubber Duck]

The problem is that the American Democratic process is much less capable of spotting talent than American Idol, and that is dire enough at times!

GWB early Jan 2008: "The economy is strong"

GWB a few days later: "Sorry I can't come to the phone right now, I'm in crisis talks with the congress, desperately trying to stave off a recession."

EVERY business venture Dubya tried b4 he went into politics either failed, or had to be bailed out by Daddy's rich friends. Now he's done it to the entire country.

The first bank closure since 1994 just occurred with the FDC appointed as liquidator. Get ready for the rush...

[bwhhisc]

The problem is that the American Democratic process is much less capable of spotting talent than American Idol, and that is dire enough at times!
So who would you like to see as our next president? (wide open, they don't even have to be running for office)

[Rubber Duck]

So who would you like to see as our next president? (wide open, they don't even have to be running for office)

Well I am not really overly impressed with the choice that are running so far.

I guess of the candidates the Clinton has to be the pick of the democrats and Romney for the Republicans. At this stage the only likely wild card is Michael Bloomberg, I guess. An independent would really make a difference, if he could survive 4 years in Washington. I guess avoiding another religious zealot would be a good thing. In Hindsight perhaps Kerry would have done a better job, but I must admit he didn't appeal to me at the time.

[Drewbert]

Al Gore, baybeee!!!!

[Rubber Duck]

Al Gore, baybeee!!!!

Wasn't he black balled by the CIA last time out?

[websjapan]

So who would you like to see as our next president? (wide open, they don't even have to be running for office)

ARNIEEEEEEEEEEEEEEEEEE

"There is another way you can tell you're a Republican. You have faith in free enterprise, faith in the resourcefulness of the American people ...and faith in the U.S. economy. To those critics who are so pessimistic about our economy, I say: Don't be economic girlie men!"

http://www.usatoday.com/news/politicselections/nation/president/2004-08-31-schwarzeneggerfulltext_x.htm

[Rubber Duck]

Mercifully, the constitution bars him from standing. :p

ARNIEEEEEEEEEEEEEEEEEE

"There is another way you can tell you're a Republican. You have faith in free enterprise, faith in the resourcefulness of the American people ...and faith in the U.S. economy. To those critics who are so pessimistic about our economy, I say: Don't be economic girlie men!"

http://www.usatoday.com/news/politicselections/nation/president/2004-08-31-schwarzeneggerfulltext_x.htm

[websjapan]

come on - what better way for their last hurrah than Arnold.

[bwhhisc]

ARNIEEEEEEEEEEEEEEEEEE

"There is another way you can tell you're a Republican. You have faith in free enterprise, faith in the resourcefulness of the American people ...and faith in the U.S. economy. To those critics who are so pessimistic about our economy, I say: Don't be economic girlie men!"

http://www.usatoday.com/news/politicselections/nation/president/2004-08-31-schwarzeneggerfulltext_x.htm
ROTFLOL
If allowed to run, Arnold would probably have a pretty good go of it. No doubt it would make for an interesting election!

Well I am not really overly impressed with the choice that are running so far.
Neither are most of the voters :p

[mulligan]

Go Ahead .. Make my .. Huh, damn it I've forgotten