The equity markets, behaving in typical fashion, have staged a brief rally in response to testimony by the Great Bernanke. Today's speech is no different than the multitude of Fed pronouncements that have preceded it, with talk of a recovery on the horizon, and anti-nationalization rhetoric. To be clear, we do not proclaim to possess a crystal ball capable of short term market prognostications. However, we do feel that there is at least some value in conducting the following exercise. The quotes below are from none other than Bernanke himself, taken from speeches/testimony/pronouncements made during the previous twelve months.
February 14th, 2008 " At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt"
April 2nd, 2008 "monetary and fiscal policies are in train that should support a return to growthin the second half of this year and next year.''
July 15th, 2008, "Our banking system is well-capitalized"
October 15th, 2008, "Fortunately, the Congress and the Administration have acted at a time when the great majority of financial institutions, though stressed by highly volatile and difficult market conditions, remain strong and capable of fulfilling their critical function of providing new credit for our economy."
November 18th, 2008 "There are some signs that credit markets, while still quite strained, are improving"
February 24th, 2009 “If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability -- and only if that is the case, in my view - - there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,”
We would submit that the quotes above are worth a thousand words/data/charts with respect to the credibility of the Federal Reserve.
Sphere: Related Content
Posts
No comments:
Post a Comment