Word is our Fed Chairman will be reappointed this morning.
This is good news for the markets,who hate uncertainty and settling this matter well ahead of Ben’s Jan expiration date and I agree with Calculated Risk’s take on the subject: “As Fed Governor Bernanke supported the flawed policies of Alan Greenspan — he never recognized the housing bubble or the lack of oversight — and there is no question, as Fed Chairman, Bernanke was slow to understand the credit and housing problems. And I’d prefer someone with better forecasting skills. However once Bernanke started to understand the problem, he was very effective at providing liquidity for the markets. The financial system faced both a liquidity and a solvency crisis, and it is the Fed’s role to provide appropriate liquidity. Bernanke met that challenge, and I think he is a solid choice for a 2nd term.”
So congratulations to Bernanke who still has a chance to oversee the Great Depression Part II according to our friend Nouriel Roubini, who is getting very little US coverage for his warning that “the recovery is likely to be anaemic and below trend in advanced economies and there is a big risk of a double-dip recession.” Of course the MSM is in IGNORE mode when it comes to economic bad news this month, even media darling Meredith Whitney was swept under the rug this weekend as she predicted 300 bank failures (“only” 81 so far) while at the conference in Jackson Hole, where she was shouted down with happy talk by – you guessed it – Ben Bernanke!
“There will be over 300 bank closures,” Ms. Whitney said. “The small-business owner on Main Street continues to see liquidity come away.Many banks may be OK for while, but the real driver for the economy, which is consumer spending, I don’t expect that to come back anytime soon.” That figure sounds about right to me, especially after looking over the American Banker’s list of 150BanksRanked by Commercial Real Estate Loanstopped by BAC ($1Tn), WFC ($888Bn), JPM ($720Bn) and C ($685Bn). Not on the list AT ALL with (presumably)less than $5Bn in commercial real estate loansare the smartest guy in the room, the market manipulating team of GS and CS while their partners in crime at MS have just $13Bn in commercial loans.
So the guys who MAKE money wouldn’t touch CRE with a 10-foot pole but our too big to fail crew is sitting…
