Morning Coffee: Stimuli Stimulee!
(Stocks in article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: SDS, NYSE: MER, NYSE: ABK, Nasdaq: AMTD, NYSE: BK, NYSE: PNC, NYSE: NVS, NYSE: CAL, NYSE: BLK, NYSE: MCO, NYSE: K, XETRA: NGL.DE)
Big Ben Bernanke hit the hill today to discuss fiscal stimulus. Here's how I understood the discussion. Ben says stimulus now, not after ten months of debate, and aid that would not significantly hurt the budget would be helpful. How you do that, I have no clue. The timeline is manageable, but there is no avoiding impact to the budget without compensatory action on another front.
Poor Ben looked and sounded like he was about to break though as he started his opening statement and answered the first question. Come on Ben, pick yourself up, stand to your height! He just looked so intimidated, like he clearly sensed his neck and job on the line and was impacted by it. You don't think he read our "Guillotine" piece yesterday do you? Who are we to judge him though, as that position he occupies draws perhaps even more scrutiny than the presidency. Still, we need a leader now, so stand up Ben.
Bernanke, while needing government help, stuck to the Fed line that the economy should not sink into recession this year. Just as the Fed did not see the spread of credit market issues coming, it is missing the next round of troubles on the way, and misjudging how low this economy will sink without fiscal stimulus and deep Fed rate cuts. What really irked me is this sense the Fed has that its stated goal to defend against inflation is so critical a market influence. He really thinks that the market, if lost confidence in the Fed's inflation targeting, would fear runaway inflation. That may be so, but at the same time, the market and everyone else is losing confidence in the Fed's ability to protect our economy as is. Parties are not being planned tonight because we are so happy Ben is fighting inflation while we are losing our jobs.
We thus believe Ben failed somewhat today in communicating the critical importance of significant government stimulus. This does not mean Hank Paulson and others will not reach the President's and Congress' ear, and that other election year influences will not drive significant stimulus. In fact, we think those drivers will bring stimulus, but we are disappointed Ben did not sell the direness of need to policy makers today. The only positive driver of Ben's discussion was his reading of his statement from paper, which no matter how intelligent you are, has the power of hypnosis. We're sure half of those congressmen fell asleep or turned into chickens.
Philadelphia Fed Survey Posts Negative 20.9
Big Ben Bernanke hit the hill today to discuss fiscal stimulus. Here's how I understood the discussion. Ben says stimulus now, not after ten months of debate, and aid that would not significantly hurt the budget would be helpful. How you do that, I have no clue. The timeline is manageable, but there is no avoiding impact to the budget without compensatory action on another front.
Poor Ben looked and sounded like he was about to break though as he started his opening statement and answered the first question. Come on Ben, pick yourself up, stand to your height! He just looked so intimidated, like he clearly sensed his neck and job on the line and was impacted by it. You don't think he read our "Guillotine" piece yesterday do you? Who are we to judge him though, as that position he occupies draws perhaps even more scrutiny than the presidency. Still, we need a leader now, so stand up Ben.
Bernanke, while needing government help, stuck to the Fed line that the economy should not sink into recession this year. Just as the Fed did not see the spread of credit market issues coming, it is missing the next round of troubles on the way, and misjudging how low this economy will sink without fiscal stimulus and deep Fed rate cuts. What really irked me is this sense the Fed has that its stated goal to defend against inflation is so critical a market influence. He really thinks that the market, if lost confidence in the Fed's inflation targeting, would fear runaway inflation. That may be so, but at the same time, the market and everyone else is losing confidence in the Fed's ability to protect our economy as is. Parties are not being planned tonight because we are so happy Ben is fighting inflation while we are losing our jobs.
We thus believe Ben failed somewhat today in communicating the critical importance of significant government stimulus. This does not mean Hank Paulson and others will not reach the President's and Congress' ear, and that other election year influences will not drive significant stimulus. In fact, we think those drivers will bring stimulus, but we are disappointed Ben did not sell the direness of need to policy makers today. The only positive driver of Ben's discussion was his reading of his statement from paper, which no matter how intelligent you are, has the power of hypnosis. We're sure half of those congressmen fell asleep or turned into chickens.
Philadelphia Fed Survey Posts Negative 20.9
If you wanted to write a dire economic forecast, you could not have done much better than the Philly Fed did today. What's even more scary is that they just told it like they saw it. Manufacturing activity and orders were weaker, and prices for inputs and finished goods rose. The employment outlook was also weaker, and generally, all forward looking aspects of the survey portend a deteriorating environment. This is why the market is lower today, after an early tick up to start the day. January's reading of negative 20.9 was the lowest measure since October of 2001, a time period we recall that was dire. Today's reading illustrated sharp deterioration just from December, which was revised to a level of negative 1.6.
Market-Moving News
- Federal Reserve: Bernanke's Statement on Capitol Hill
- Philly Fed Shows Manufacturing Tanking
- Bloomberg: Housing Starts Lowest in December Since 1991
- CNN Money: Market Comes to Capitol's Doorstep
- AP/Yahoo!: Merrill (NYSE: MER) Suffers Steep Q4 Loss $22 Bln.
- DOL: Jobless Claims Fall, Ongoing Jobless Sticky
- CNBC: Fed's Pianalto Discovers Economy on Slower Growth Track
- DailyFX: Would 75 BPS Do It?
- Platts: Crude Futures Rebound
- MarketWatch: Retail Upbeat, Lead London Market
- Yahoo! Earnings Calendar
- Bloomberg: Ameritrade (Nasdaq: AMTD) Profit Up 65%
- Financial Times: Anglo American (XETRA: NGL.DE) Eyes $5.5 Bln. Brazilian Deal
- AP/Yahoo!: Bank of NY Mellon (NYSE: BK) Profit Falls
- CNBC: PNC Financial (NYSE: PNC) Profit Falls
- AP/Yahoo!: Novartis (NYSE: NVS) Q4 Sinks
- CNBC: Continental (NYSE: CAL) Driven By Strong Int'l Business
- Bloomberg: BlackRock (NYSE: BLK) Earnings Surge on Hedge Fund Fees
- TheStreet: Moody's (NYSE: MCO) Might Cut Ambac (NYSE: ABK)
- AP/Yahoo!: Kellogg (NYSE: K) Buys Russian Food Co.
- Greek: Buy Investment Banks
- Greek: Sunset for Solar Stocks
- Economist: The Geopolitical Week Ahead
- Iran Daily: Tales from the Dark Side
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posted by The Greek | 9:33 AM
2 Comments:
The problem is worse for Bernanke.
The problem (IMO) is that this recession was induced by monetary inflation under Greenspan. More monetary inflation cannot be the answer.
Once the money supply is too great, and it may already be, changes in monetary policy and even fiscal policy will have increasingly less effect.
The system is becoming uncontrollable.
I'm not understanding how your opinions regarding abortion hold any relevancy in this blog. If anything, I envision your political affiliation as leaning more towards the libertarian side, where government intrusion - as relating primarily to issues of both economic and a moral dimension - is held to a minimal. With that being said, why is it that you don't back Ron Paul?
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