Big day today!
We have our GDP report at 8:30 but that will be quickly forgotten as Bernanke is called to testify on Capital Hill in what is quickly becoming BankAmericagate and the calls are coming for Bernanke’s learned head, most notably from San Diego Republican Darrell Issa, who has charged: “The Fed engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies.“
The Democrat who heads the committee, Edolphus Towns of New York, has called Bernanke to testify on Thursday. “I am not going to prejudge these issues. We are not even close to finishing the Bank of America-Merrill Lynch investigation at this point,” Towns said in a statement. The issue has become a political football as lawmakers look to blame someone for the troubled deal amid taxpayer anger over the billions of dollars the government infused into banks to try to ease the world financial crisis.
The goal of the Republicans is to vilify Bernanke (as he is now part of the current administration so they are hoping it rubs off on Obama) while trying not to remind people that they were in charge when this happened. That is truly confounding and it should be some circus today up on Capitol Hill as all the Congressmen jockey for their moment in the spotlight to show how much they care about our nation’s financial crisis by tying up the Federal Reserve with endless requests for documents and testimony at this critical juncture in our “turnaround.”
I said to members yesterday, as this news was breaking: “So the spin on all this is going to be that it’s the attack on Bernanke and not the Fed move itself, that caused the sell-off. That will be enough to let them jam up the futures (maybe even a stick close) and keep Asia and Europe in the game, hopefully attracting more “bargain hunters” for US equities.” That’s pretty much where we’re at this morning with the futures jammed up more than 1% into Asia’s open (midnight US), where Dow futures were trading 100 points above the 4pm close yet the S&P futures got rejected off that pesky 908 mark and have since fallen back below 900as of 8:15. Asia responded as expected with 2% gains on the Nikkei and the Hang Seng but Shanghai was flat and the Baltic Dry Index has taken another sharp downturn, back to…
