Long-Term Coronavirus Damage Must Be Reduced by Fed

In a new series on the “economic cures” for the coronavirus, the Financial Times is offering insights from leading commentators and policymakers on “how to alleviate a devastating global slowdown”. This article, co-authored by Ben Bernanke and Janet Yellen, discusses the role the Fed must play to reduce long-term damage. Here are highlights: The Fed’s recent actions of lowering interest rates (to nearly zero) and preparing to purchase $700 billion in Treasury debt and mortgage-backed… Read More

Former Fed Policy Makers Voice Concern About Next Crisis

A recent Bloomberg article reports that Ben Bernanke, Timothy Geithner and Henry Paulson “all voiced varying degrees of concern about America’s ability to combat another financial meltdown 10 years after they played prominent roles battling the last one.” According to the article, the trio believes that although the banking system is stronger than it was a decade ago, there are some “weak spots in the country’s crisis-fighting arsenal.” Here are some of their comments: Geithner:… Read More

Sonders on Stocks, Bonds, and the Fed

Though the market’s recent pullback may not be over yet, Charles Schwab Chief Investment Strategist Liz Ann Sonders says longer-term factors are making her optimistic about the stock market and economy. “The [recent] spike in yields, while alarming, may not mean much more turmoil in the stock market than what we already saw,” Sonders writes in recent commentary on Schwab’s site. “The history of major up moves in yields shows stocks actually performing quite well;… Read More

Romick on Why Bernanke Needs to Go

In a recent letter to FPA clients, top fund manager Steven Romick says the Federal Reserve’s easy money policies are having and will likely continue to have troubling effects on the economy, and makes the case for the replacement of Fed Chairman Ben Bernanke. In the letter (H/T to Sara Wolinsky for posting the the letter on Scribd, and to ValueWalk for highlighting it), Romick recounts a string of opinions Bernanke has offered in recent… Read More

Oberweis: Follow Ben’s Lead

Newsletter guru Jim Oberweis says that investors can make some nice profits by following the Fed. “Government policies shape markets, turn winners into losers and, unfortunately, can distort the invisible hand of the market,” Oberweis writes in his latest Forbes column. “Only a fool would ignore the moves of Uncle Sam, particularly with government spending higher than ever.” Oberweis says that several companies are “exploding” because of Ben Bernanke and the Federal Reserve’s  easy money policies, which… Read More

Gross: Fed Policies May Be Destroying Credit, Not Creating It

The Federal Reserve has for the past few years maintained a low interest rate policy in order to make credit easier to obtain and growth easier to come by. But PIMCO’s Bill Gross says that policy — and the Fed’s announcement that it will continue it for the next two years — may be having the opposite effects. “Pilot [Ben] Bernanke has changed planes from a fixed wing to a rotor-based helicopter by ‘conditionally’ freezing… Read More

Dreman: Bernanke Stuck in the Past on Jobs

David Dreman says U.S. policymakers are approaching the employment problem with antiquated views, and policies that aren’t addressing the real issues with job creation. In his latest Forbes colunn, Dreman says that Fed Chairman Ben Bernanke “is fighting the monetary woes of the 1930s,” a period in which domestic stimulus led directly to increased domestic employment. “Our current employment problem is different,” Dreman says. “We currently export our jobs to lower-wage nations like India, China… Read More

Buffett Still Worried on Inflation

Warren Buffett says he’s still worried about inflation, and says, contrary to what many believe, inflation can occur even if the economy is operating with significant excess capacity. “I don’t think there could be a better Fed chairman [than Ben Bernanke], but I still worry about inflation,” Buffett tells CNBC. “He didn’t talk about this the other day, but there’s a lot of people who take the approach that because there’s excess capacity in the… Read More

Bernanke on the Exit Plan

There has been much speculation on what impact the government’s massive spending and lending programs will have on the economy and stock market, with fears of significant inflation at the forefront of the discussions. Today in The Wall Street Journal, Federal Reserve Chairman Ben Bernanke addressed those concerns, saying that he is confident the Fed has the tools it needs to sop up excess liquidity in the market when the time is right — though… Read More