It's too bad I've had reason to write so many posts about Ben Bernanke... First, he was named Foreign Policy's "Top Global Thinker." Then he was named Time Magazine's "Person of the Year." In the Time interview, he produced the no-it's-not-from-the-Onion-he-really-said-it quote "We had to do it because we had an adjustable rate mortgage and it exploded, so we had to," while explaining why he refinanced into a 30 year fixed (although something smells fishy with that answer - as some commenters pointed out - since interest rates are still low on most ARMs... Did Big Ben have some sort of negative amortizing loan where he had to actually start to make payments? How else could an ARM "blow up" with such low interest rates?).
Also in the last week, he took time to answer Senator Jim Bunning's lengthy question list. If you're interested in reading critiques of Bernanke's answers, check out Yves Smith's in depth challenges here, and Karl Denninger's few points here. But wait - as the informercials say... THERE'S MORE!
Today, Clusterstock highlighted another come-on-there-is-no-way-the-Fed-chairman-could-have-said-that-you-must-be-making-it-up-for-financial-satire quote, but sadly, it's NOT from The Onion - Bernanke really said it:
"Pressed by Committee chairman Chris Dodd on the matter of the carry trade, the cheap dollar being used to buy higher-returning assets, Bernanke responded that it’s only a problem for the U.S. if you think the economy is going down again, which is not the Fed’s view."
WOWZA! REALLY?!?? So, since it's not the Fed's view, it can't happen!?? Marty up! Ponziiiiiiiiiiiiiiiii. It's almost as if Bernanke is having a "let me see if I can put my foot any deeper inside my own mouth" contest with himself! Doesn't he know that he and the Fed have had a less than stellar record forecasting the impact of the economic crisis thus far?
Finally, Felix Salmon gave me a shout out today, suggesting that perhaps I was the "blogger" who Senator Bunning was quoting in Bernanke's confirmation hearing when he compared Bernanke to the captain of the Titanic. As a believer in righteous attribution for blog work, I must mention that I certainly didn't create that analogy - I believe it was Dean Baker who I first heard using it. I would be honored if Bunning read this blog, but that analogy has been widely used.
-KD
4 comments:
Very Interesting point you make here. I did not catch that when I listened to him speak. I specialize in small and micro caps. Take a look at SINO on the NASDAQ. 6.6 mill cash and no debt.
24 mil or so in revs and a great capital structure. It is a value and no one follows it.
Bernanke had better hope a double dip does not happen or, as GWB used to say, "This suckers going down!"
That was not a Tiger Woods slam either.
Bernanke sucks, and don't get me wrong the blowup thing is just too good, but maybe he meant the rate was blowing up, or whatever. Just not necessarily how you're taking it.
bernanke mortgage details put to rest here:
http://www.calculatedriskblog.com/2009/12/bernanke-arm-ok-head-explodes.html
his ARM didn't exactly "explode" at all.
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