Four More Years

The stock market is rebounding this morning and the news that it appears that Ben Bernanke will be confirmed for another term as Fed chair, though of course, it’s hard to tie any one-day rally to a specific news item.
I think the anger at Bernanke closely resembles the Two-Minute Hate Sessions in George Orwell’s 1984. Americans are rightfully angry, but they don’t know exactly who to be angry. They were angry at George Bush and he’s not around. Alan Greenspan? He’s also gone. That leaves Ben Bernanke.
If having him reconfirmed by a whisker placates enough folks, I’m fine with that. But rejecting Bernanke would be an awful, awful move. Consider the take of one Nebraska-based investor:

CNBC:….Should he be confirmed?
Buffett: If I could vote twice I would. He should be. He did a magnificent job over this period… We can’t sit here and armchair quarterback him. But when we look back at September and October 2008, he took some extraordinary actions….we talked about it being an economic pearl harbor. He did what he should have done in response.
Q: What happens if he’s not recommended?
Buffett: Well, just tell me a day ahead of time so I can sell some stocks.

There seems to be a view that deep with the offices of the Federal Reserve is a large machine called a Bubble Popper. At anytime, the Fed can wheel it out, aim and fire. Then magically, whatever bubble formed will be popped without damaging anything.
My guess is that Bernanke will be passed with just a few votes over 60, but there was no real danger to his reconfirmation.

Posted by on January 25th, 2010 at 10:28 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.