Reason: Bush called him yesterday and said: "Now look here. My daddy works for The Carlyle Group and they need to take their portfolio companies public. This won't work so good when you keep talking the market down, will it? You see that man right there? That's Vice President Dick Cheney. His friends, who are also MY FRIENDS, are not too happy these days. These friends of ours tell him that the value of their stock portfolios have gone nowhere this year. They were doing fine until YOU started talking two weeks ago. Have you read the Washington Post today? My approval ratings are down to 33%. I'm trying to get the American people to like me. Now when the American people see their stock portfolio and 401K go down, they aren't too happy, are they? And, if they're not too happy to begin with, it's going to be that much harder to make them like me, won't it? Do you catch my meaning? Do we understand each other? Are you loyal to this administration?" "Bernanke: Fed Can't Ignore Stock Movements" http://sfgate.com/cgi-bin/article.c.../05/25/financial/f132646D97.DTL&type=business
Reason: Bernanke's last rate hike sent the DJIA plunging from 11709 to 10980 for a nice 6% correction, more in multiple other markets. Starting to think that that was more of an 'oops'. CPI and PPI are finally starting to show the effects of oil's protracted run up. Don't be fooled - bernanke WANTS this. Asset targeting c.f. the housing market is recessing on its own accord. Long bond yields are finally starting to rise. I doubt however that stock assets are to be targeted, as that would essentially wipe out the wealth of america's and europe's power elite. That would not be tolerated long. Unless Bernanke is trying hard to induce a worldwide recession to punish the Chinese for failing to float their currency, I see no reason why he should continue to raise rates. Having said that, I am somewhat on the sidelines waiting for his next move as I perceive downside equity market risk to far exceed upside risk after the last rate hike.
then Bush said: "Now look here. I know you have a job to do and you're under the public eye. It's not about a quarter point here or a quarter point there. That has nothing to do with it. It's not about what you do, it's about how it's perceived. Do we see eye to eye that nobody wants to see the market go down? Do we understand each other? Can this administration trust you to do the right thing? Does the market understand you? Oh BTW, do your kids have an interest in business and government? We need an ambassador in Paris. Would they be interested? If they are you can count on my support. I know I can count on yours. I put a premium on absolute loyalty." "Bush has total confidencein Fed's Bernanke" http://today.reuters.com/News/newsA...005651_RTRUKOC_0_US-ECONOMY-BUSH-BERNANKE.xml "Fed not rigid on hikes, Bernanke Says" http://www.buffalonews.com/editorial/20060526/1019478.asp
Very difficult to say, but I have found an amazing correlation, at about 90% currently, to the way I feel about his chances of raising and what the FFFs say. So I stop thinking about it much and go with the FFFs +/- 10% chance. FFFs currently rate it at 50% for June meeting, which is probably a little high chanced imo given this mornings core inflation data. nitro
Bernanke is an academic college professor right? Do you remember when you were at University and you wrote that essay that you were convinced deserved an A? The college professor failed you! Remember? Now you work in the real world and the college professor still lives in an ivory tower. What do I think Bernanke will do? He will continue to raise rates and create the next recession. Its the nature of the beast! If they were any good at what they do why do you think they are still on the govt payroll and not managing some emerging markets fund or a hedge fund or something useful?
then Bernanke said: "But Mr. President, what can I do? To fight inflation, I have to raise rates. I can only do what the economic numbers tell me. What if the data says there's inflation?" and Bush said: "leave that to me my friend. i have a way with data. here in Washington, data has a way of supporting my views if you catch my meaning" and then Bush said: "hey Benny, there's a bunch of employment data to be released, right? did you know i appointed the Secretary of Labor Elaine Chao? she's a fine woman, extremely loyal. everyone in my cabinet is worried about a shakeup these days. i think she's doing an excellent job." "Elaine Chao Bio" http://abcnews.go.com/Politics/Inauguration/story?id=122080 "Bernanke Taps Senior Officials to explore Communication" http://www.marketwatch.com/News/Sto...62-E47A-4330-93F9-99A9449431C7}&siteid=google
And then Bush said, " We don't need you to improve our economy. Have you ever heard of Area 51? Maybe you weren't cleared to read the classified documents, but we have recently procured a gold making machine from them there spacemen. ahee hee hee. The spacemen are working closely with us, on a secret bipartisan committee, to stengthen our countries economy to return us to a gold standard. Ahee hee hee. Ambassador Klaatu from the fourth star of the Trapezium in the Orion Nebula has agreed to provide us with more of them there gold making machines in return for our most fertile women. "