Today, the much-derided Fed Chairman Ben Bernanke is a "rock star." Next week, will he become the Fed's answer to one-hit wonder Tommy Tutone of "867-5309 Jenny" fame?
That's tough to know, but Bernake proved that yesterday's idiot is today's genius. The Dow Jones industrial average reversed its recent declines soaring at last check 106.89 points to 12,952.67 after the Federal Reserve slashed in the discount rate -- the interest rate on direct loans -- by 0.5 percentage point to 5.75%.
Will this mean much to the problems affecting the economy?
The real estate market is still lousy. Consumer confidence seems shaky. Retail sales still are weak and investors outside of Wall Street remain very, very nervous but less so today than they have been. Again, that's tough to know.
Market pundits of course were joyful. "It's just a brilliant move in letting the markets know where liquidity can be found and at what cost," Tim Hartzell of Kanaly Trust Co. told Bloomberg News. Is this excitement premature? Again, tough to know.
CNBC's on-air talent including my former Bloomberg colleague Dylan Ratigan is in their glory as talking heads snipe at each other about whether the end of the world is coming. They didn't need to fake breathless enthusiasm. Will they be depressed again soon? I wish I knew.
Tech stocks including Dell Inc. (NYSE: DELL), which announced an earnings restatement yesterday, Apple Inc. (NASDAQ: AAPL) and Microsoft Corp. (NASDAQ: MSFT) rose as did Hewlett-Packard Corp. (NASDAQ: HPQ) barely budged despite reporting a better-than-expected quarter.
Blue chip stawlarts such as General Electric Co. (NYSE: GE), Deere & Co. (NYSE: DE) and United States Steel Corp. (NYSE: X) also rallied.
The question is whether this is the light at the end of the tunnel or a sign that a train is coming the other way.
.











Reader Comments (Page 1 of 1)
8-17-2007 @ 1:52PM
Sheldon L said...
If there is no recession he is a Rock Star, but he is learning on the job, the difference between book learning and street smarts.
8-17-2007 @ 2:26PM
Dana said...
I feel the one element missing is investor confidence. I don't think the fed dumping huge amounts of money into the system or lowering short term rates is going to instill confidence in our overseas investors. I sure would not place my money here! Bernanke needs to get credibility through speaking as well as actions! Greenspan could turn the market with his words, I think Bernanke needs to give that a shot!
8-17-2007 @ 2:48PM
David Laffoon said...
I still feel the Iraq war is weighing heavy on investors mind.Spending so much money leaves me with little confidence. We need some of our problems in the U.S. solved or worked on.
Thank you,
David Laffoon
8-17-2007 @ 3:58PM
Dave said...
Let just call it the "Ben Bernanke Bankers Bailout"
8-18-2007 @ 4:01PM
MRBLUECHIP1941 said...
CNBC's Maria Bartiromo was bordering on the obscene in her dance of delirium in front of the New York Stock Exchange. Why is she and her friends, the traders on the floor and in Chicago, so joyful? The underlying and far more ominous scene unfolding in the investment world with its lurking monsters of investors abandoning hedge funds in droves, mortgage rates rising next year, and the forthcoming credit squeeze affecting ordinary people on mainstreet hasn't changed because of anything the Fed has done over the past week. Maria's pals, the Wall Street socialists running to Uncle Ben to save their miserable hides, can't stop the inevitable from happening. Step right up to the tent and come on in to witness the Bush and Greenspan Next Great Depression.
8-19-2007 @ 9:32PM
roger b said...
in Fresno California Countrywide changed all the door locks after the close of business onFriday .Hmmmmm let's see what this means on Monday am
8-20-2007 @ 11:28AM
kcaroljean said...
Just out of curosity, how many of your loans went to illegal aleins.
8-20-2007 @ 7:41PM
blackwingedbeing said...
Ben S Bernanke is also on the B.O.D. for the BANK FOR INTERNATIONAL SETTLEMENTS. This the head bank for all central banks of the world (talk about playing both sides of the street).
What he did was make the poor poorer and rich richer. He's helping to raise inflation so he can raise his buddies profits. It's a clear case of bailing out your friends. This guy, along with everyone at the Federal Reserve, does not and have never held the American public dear to it's black heart.