Watching Bernanke Day Trade The Economy


young ben

“The Federal Reserve is not currently forecasting a recession.” Ben Bernanke, Jan. 2008

“The Federal Reserve cuts the funds rate to 0.25% and announces unconventional measures to take country out of recession.”- Bloomberg December 2008

Yes Ben, do give us some more of your prognostications about future unemployment, inflation and growth.

In March of or 2007, Ben told us this:

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

Hey Ben, what are your feelings on assisting banks and other lenders should they get in trouble?

“It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.” –October 2007

Hey Ben I’d love to know your opinion on housing.

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.” -May 2006

They have a street sign named after Bernanke and his ilk, it’s called “One Way”.  It’s he only thing they know.  Ben got us here (debate whether or not it was a good thing long term or not). The market has sure loved it. Anyway, he will soon pass the baton (or the hot potato),  to his pal Janet Yellen. Ben does book tours and speaking engagements, becomes the President of Princeton, and us  traders and investors will start hanging on every word, sigh, and facial twitch of our New Boss.  Its all part of the cycle of change, yet everything will stay the same.

It’s all fun and games until one gets a stick in the eye. Next week should be a hoot as Fed speakers opine and housing data gets released.  The market held support on Friday. Many market technicians were watching that 1577 level and was tested twice on Friday and held. It was also quadruple witching for options, and a re-balancing day that followed a 500 point decline in the Dow. Crazy.

I’m not knocking The Bernanke, or anything he did when Rome started to burn, but I do think Vegas has a better handle on what unemployment, inflation and growth will do over the next sixteen months than Benny.

Watch the 10 year next week. $TNX

Grab a free trial here. In depth market video will be out on Sunday. I will be back with some set ups later.

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