7:42 am ET
Jul 15, 2013


What If Bernanke Could Be Blunt


      Mr Wessel, if buying $85 billion/month of bonds was designed to ease policy further, then buying less bonds each month is tightening credit. On an absolute basis it remains easy, but at the margin, where markets get their price signals, less buying is tighter than the current buying, regardless of the stock of bonds held. The fact that the Chairman doesn't understand or accept this may well be the biggest problem he has. unwinding the current policy will be quite traumatic to all markets around the world, no matter how it is effected

    • I think he would stop at 2 and repeat it three times: You in Congress are not only not helping you are hurting the economy. The Republican House has been doing this for the last 3 years (and that's being generous). It's not exactly a news flash. Why Americans of any stripe would support a bunch of political grease balls who HURT the American economy is beyond me.

    • Mr. Wessel should go set up shop on some boulevard reading people's minds for cash. Otherwise, he should stop sticking words in anyone's mouths, especially stupidities about the sequester, which is the first tiny movement toward controlling federal spending in more than five years. This is just simply a trashy piece of "journalism" that has no business in a major media outlet. Embarrassing!

    • But he won't!

    • 1. David Wessel should be fired for this piece of propaganda and Bernanke worship
      2. The real five things Bernanke should say:

      a. I"ll admit, Keynsian Astrology doesn't work. Distorting rates and printing money only leads to bubbles and unsustainable sectors. It distorts the natural flow of savings versus consumption and leads to maleinvestments..I finally see that now.

      b. I can't predict anything. My field is a total failure at forcasting. Other than the Austrian School, macroecnomic theory is devoid of any real ability to understand human actions and is only used to allow govt to buy votes and dispense favors and bailout the financial elites.

      c. I've funded the Obama regime and its ability to buy votes and have wars all with my printing press.

      d. I've allowed unsustainable sectors like Govt and Wall Street to be able to expand but stealing from savers and productive sectors. Instead of forcing both sectors to be downsized by market forces, my policies have allowed banks not to have to take losses from all the bad loans they made. Goldman Sachs is more important than any real productive business or any American citizen.

      e. The Constitution is a joke. We need central planners like myself who are smarter and more noble to lead America past a nation based on sound money, free markets, limited govt and peace to a multicultural, war marking, crony capitalist, lack of honesty and thrift empire. I did my teachers such as Paul Van Warburg and the Rothchilds well.

    • The fatal conceit of Wessel and his band of keysnian astrologers is here in all its glory. Time the WSJ showed Mr. Wessel the door...

    • What an ridiculous article. The sequester??

    • Mr. Wessel once again tries to curry favor with Bernanke. This is the same obeisance that his WSJ colleague John Hilsenrath practices to gain inside access to Bernanke, as an apologist for the Fed. As a result, these two brown nose "journalists" have become embarrassments to the WSJ and opened themselves up to public ridicule.

      There is nothing admirable about throwing boatloads of money at a problem for years without any meaningful or lasting results to our economy or our unemployment situation. There is nothing admirable about punishing savers and rewarding debtors. And there is nothing admirable about weasels who act as obsequious cheerleaders for this type of misguided monetary policy.

    • #1 -- Our problems are not monetary, they are structural. We cannot compete in the global economy with ever-increasing business investment and job creation disincentives. Our tax policies are broken, our regulatory morass is a monstrosity, our legal system needs reform, our entitlement programs extend beyond our economic means and create disincentives to work, and that's just the beginning. Mr Obama, Mr Reid, and Mr Boehner -- FIX IT! The alternative is that the Fed will keep printing to keep the banks afloat, while slowly but surely destroying the middle class.

      I could list #'s 2 thru 100, but they all follow from #1.

      Thank you and have a nice day.

    • “the U.S. is doing a heck of a lot better than the rest of the developed world.”

      The only reason the United States is doing a lot better than the rest of the developed world is the fact that as the world’s reserve currency and perceived safe haven we don’t have to live by the same rules as the rest of the world. So far we can quantitative ease until the cows come in and sell our bonds with an apparent unlimited market. No other country has the ability to do that.

      The question is, and it is a serious consequential issue, when will the world tire of the United States flooding the market with liquidity before confidence is lost and the bubble bursts?

    • I think he would say Obama, perhaps you should provide some leadership and get congress to grow some stones too while your at it. I can only paper over all the deficit spending you are doing for so long. Do the democrats really expect me to expand the Fed's balance sheet to 5 trillion dollars just to pay for their delusional giveaways?

      Look guys obviously the sequester was not the end of the world as Obama said it would be so perhaps you could cut elsewhere too without the world ending and perhaps even unexpected improvements to the economy!!!!!

      Grow some stones everyone, we at the Fed are "Fed up" with you!

      P.S. I told Obama this so he is going to relieve me and put another of his cronies at the helm of the fed too!!!!

    • Item #4 - because of my QE3 influx of 85BILLION with a B per month I have caused a hyper bubble in the stock market which is going to crash on your heads when I stop, so stop listening to what I say as I don't know how to stop the QE program.

    • If Bernanke could be a blunt, they would pack him full of mary jane and nobody would notice.

    • The unmentionable truth: The bond-buying, quantitative easing, did nothing to strengthen or make for a more sound economy. It only provided Wall Street with free money to drive up asset classes. All it took was the hint that QE might ease, not even end to send the market into a tailspin.
      This is a market addicted to QE like a junky to heroin. There is now no way the Fed can end QE without tanking the artificial asset bubbles it has created in both an anemic housing recovery and market indexes that bear no relation to the real state of the national or world economies.
      Continued QE will lead only to a bigger and bigger bubble that when it explodes will destroy. Best to end the QE now and deal with the destruction the Fed and Washington has created than to explode a bigger bubble. But the Fed and Washington politicians can't handle the truth that their centrally planned interventions have created.
      Prediction: We will continue to inflate until the explosion of hydrogen bomb dimensions.

    • I love Bernanke...I got all this money for free and speculated with it..and make billions..what's not to like..the man has done himself and his people well...we even got a few swiss accounts ready for him...what he did for us was wonderful.

      Signed..Goldman Sachs

    • QE will never end until it's fully done its damage. What would normalized interest rates do to the federal deficit? Merely hinting at easing QE sent interest rates to levels Bernanke and Washington couldn't stand.

    • If the GOP Congress is hurting the economy by engaging in slightly less irresponsible spending of borrowed money than might otherwise be the case, why not fix the problem completely by just having the federal government give everyone in the US a million freshly printer or borrowed dollars? Then we would all be "rich", problem solved.

    • It amazes me how blind people are. He and the Federal Reserve, in general, are a private institution that works DIRECTLY FOR THE BANKS.

      Considering they are sitting on mountains of stocks to offload onto the public, the market has to go up.

      How else did you think they were going to attempt to recapitalize the banks without going through Congress and infuriating the public?

    • Saying "We're bad but the rest of the 1st world is worse" is hardly cause of self-congratulations.

      Instead of criticizing the sequester, he should critcize congress for not balancing the budget.

      As for Krugman, who cares?

    • @Titus Pullo,

      I couldn't have said it better myself. The Federal Reserve IS the problem!

    • If the sequester is so bad, why did unemployment stay sky high in the first six years of the Obamination?

      No, the sequester is the only responsible economic policy coming out of D.C.

    • We need the return of disgraced titans like Spitzer, Weiner, Blagojevich, Frank and Corzine!

    • Why is the Federal Reserve, in any way, involved in the stock market levels?

      When has the authority been granted to them and how is this legal?

      Please, I would love to know.

    • These authors are plain old wolf in sheep cloth. For example, in point Two, they are critical of sequester "hurting" economy, but never mention tax increases from the higher earners and from the Obamacare.

      Yeah, some austerity is better than others. The former (sequester) is just bad austerity that "hurts" the economy, while the later (tax hike) is good policy for social FAIRNESS (never mind the effect on economy).

      Pure hypocrisy..And this is just for one of the point.

    • I think this article is funny but so TURE.
      Especially this:

    • Let's be blunt here: KA-BOOM!
      (That's the sound of an exploding asset bubble).

    • Dave, you're points seem so far off base i don't know where to begin. brevity says: sequester is a joke of an austerity drive. cutting spending growth is not the same as cutting current spending. 85 billion is cutting the morning banana out of your breakfast. Every QE episode has shown that IT'S NOT the STOCK, IT'S THE FLOW of purchases that is keeping a recession at bay. Every time LSAPs are paused, the economy craters almost immediately. The crisis period when 'buying time' is appropriate has long since passed. The problem is STRUCTURAL and cyclical tools are only delaying, if not magnifying the inevitable

    • If Bernanke really had his druthers, he'd tell Congress that the economy cannot recover while it drags along the ball and chain of Obamacare.

      NYT, Jan 10, 2013:
      "WASHINGTON — The Federal Reserve said on Thursday that it sent $88.9 billion in profit to the Treasury Department in 2012, a record that reflected the vast expansion of the central bank’s investment portfolio. ..."
      The Fed reports gains and losses per GAAP. If the Fed can transfer gains to the Treasury, the Fed can also transfer losses to the Treasury.
      The Fed investment bankers, like Wall Street investment bankers, are placing bets that the economy will recover. Betting with unlimited newly printed currency.
      Not to worry - no risk or Bernanke would say so.

    • So, the only way to keep (what's left of) retail investors from selling off and keep 401(k) contributors shoveling money into the system is to have NEW ALL TIME HIGHS every day?

      This will end wonderfully. How can this even be legal?

      Better yet, now that this established, how the F!*&K can this ever end without destroying the entire system?

      What? DOW 500,000,000 or bust?

    • LMFAO....

      Watch this just SOAR into the close with a 'mystery force' pushing the indices up up up and away.

      If new all time highs weren't ridiculous enough to suck money into equities. Maybe new new new all time highs will do it! Just keep getting a bigger and bigger hammer until, eventually, the peg pounds through the hole.

      But, what's so shameful is that people are truly obtuse to what's going on behind the curtain. I'm sure 90% just look at their 401(k) statements and never even consider inflation or the debasing of the currency. I'm quite sure the Bernak is well aware of this, too.

    • "...It’s not how much we spend on bonds each month that matters; it’s how much we hold"

      Exactly wrong. The FLOW of new cash AT THE MARGIN is what determines prices for financial assets. This is why bond prices tanked when Ben hinted at reducing the flow of new buying.

    • My name is Ben and I have a problem. I want to run things and tell people what to do...you see its the classic "minority living in a majority" inadequacy...I can feel better about myself if I get to run things the right way and dominate others...i realized the perfect way to do this was to go into monetary policy..after all as Rothchild said..if you can control a nations money supply what difference who gets elected..the ultimate power..now to do this I was trained very well..at the alter of Keynsian Astrologers...yes I know its all hookum and doesnt' work but it does enable govts to buy votes so the more I say its great..the greater the chance I would get to be chairman of the banking cartel my cousin Paul Van Warburg and JP Morgan created...now that I've essentially destroyed any chance of a free market in finance and put America into perpetual debt to the banking class..I've done my job...and I feel great about it...

      I'd also like to thank my good friends and relatives at Goldman Sachs and others who I hope have put something away for me in some swiss accounts..my only wish is that it not be in dollars but in gold ..as JP once said..gold is money all else is credit..


      Helo Ben


    • 202297296340226222222221342292672 8223450727715844 seo 9767030960814775012 company 27317952233300422. 972233 seo service 984667621054796 blue 00 6226649822432210123358406691577 seo company 789317 67922330266995195687 657227.922110 :(

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