Bernanke in a Hole in Jackson as Wall Street Evacuates

Fed Chair Ben Bernanke gave his much awaited speech at Jackson Hole friday morning saying little of substance and less of note. Hours later, but only after the market had a chance to rally, New York City Mayor Bloomberg ordered a mandatory evacuation on the low-lying areas of New York City including Wall Street itself. 

The mainstream press couldn’t wait to trump up Bernanke’s empty clichés and pump up the stock market. Before Bernanke started his speech the market started dropping and the Dow Industrials were down 220 points while he was speaking. Within two hours, the Dow had rallied almost 400 points from its bottom. Such huge market moves in a short period of time indicate an unhealthy market. When stocks bend too much, they eventually break. 

What was the great revelation from the Fed Chairs speech? It was “the U.S. is headed for long-term economic growth”. Another brilliant insight from the man that said subprime mortgages wouldn’t cause any significant problem up to one month before they began torpedoing the stock market and the economy. Bernanke also failed to stop the worst bear market and recession since the Great Depression in the 1930s and let the world financial system fall off a cliff because he failed to understand what would happen if Lehman Brothers failed. But like the dim-witted son of a third world dictator, the press still slavishly talks him up after each ill-fated move. 

Just as a barely subdued economic panic impacts America’s main Street communities, New York is on edge because of Hurricane Irene. Food stores and the transportation hubs are mobbed. People in low lying areas have been ordered to evacuate just before the authorities are closing down the subway system and commuter railroads — the only way out for many New York residents. Another example of government action at its best. That Wall Street itself is in danger of being flooded just after more wisdom from Chairman Ben is an irony that should not go unappreciated. 

Daryl Montgomery
Author: “Inflation Investing – A Guide for the 2010s”
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.