The Fed

Huge Congrats, Ben Bernanke

bernanke nyt thumb.jpgNot only did the Beard of Understanding land some prime modeling gigs on the success of his Times spread, but he’s reached the penultimate step toward being named Most Popular girl in school (all that’s left to do is blow the editor-in-chief of the year book, who tallies up senior superlative ballots). A new CNBC survey of “Wall Street professionals” shows a waning faith in the economy at large but a waxing faith in he who would sooner say the ‘r’ word than engage in that or any other hair removal process. Thirty-nine “money managers, investment strategists, and professional economists” gave Ben a “B” for his work this month, up from January’s “B-.” It would’ve been an “A-” but Charlie Gasparino’s mechanic said he was “less than impressed” with the Chairman’s work, and failed his Harvard ass.
Fed Chairman Doing Better, But the US Economy Isn’t [CNBC]

Donald Trump Reacts To Calls For ‘Stimulus’ Plan

There’s a lot to love in this interview with Neil Cavuto and Don Trump (Cavuto’s expressions (he’s definitely been practicing these, go to 9:02 and tell me I’m wrong); Cavuto’s jokes (DT: “Ben Bernanke could’ve been a leader, instead he was a follower” NC: “He should’ve read Think Big And Kick Ass In Business And In Life“) ; Cavuto’s ass-kissing (“I love when you say ‘You’re fired,’ I love when you do that”) but if I had to choose my favorite moment I’d go with:
Trump: If i were president right now, you’d have $30 oil. I would call up Saudi Arabia and say “That fucking price is coming down and it’s coming down now” and you know what? They’d lower that price so quick and it’d be so easy.
Cavuto: What if they didn’t?
Trump: They will.

bernanke nyt.jpg
(While I’m stroking it, I’m also saying, please do not question my judgment in agreeing to pose like this. Not that I have to defend myself to you, but I think this is exactly the way America would like to see its Fed chairman, at this time especially. Anyway. Email me for the pics that didn’t make it to print: beardofunderstanding (all one word) at yahoo dot com.)

  • 11 Sep 2007 at 11:22 AM
  • The Fed

Bernanke’s “Move”

stop short.JPG
The unintentional Seinfeld reference that made us giggle today – Bernanke’s move on the U.S. economy is to stop short, emulating great central bank economists and driver’s seat molesters. Bernanke didn’t offer any inkling that rates would be cut at the September 18 FOMC meeting, disappointing Wall Streeters convinced that their whining was driving the Fed’s actions.
Many economists think the Fed will cut rates, but are arguing over the extent of the rate cut. Bernanke provided little clarity. More, from the Journal:

Comments Monday by San Francisco Fed President Janet Yellen and Fed Governor Frederic Mishkin seemed to make the case for a half-point reduction, Fed watchers said. In contrast, remarks by Atlanta Fed President Dennis Lockhart and Dallas Fed President Richard Fisher seemed to lean toward a quarter percentage point cut, analysts said. Wall Street was thus looking to Mr. Bernanke to break the tie, which he didn’t do. Mr. Bernanke’s speech is the last scheduled by a Fed official before the Sept. 18 FOMC meeting, meaning investors are likely to confront that meeting with much more uncertainty than they’re used to having.

Bernanke Speech Offers No Rate Clues [Wall Street Journal]

Bernanke: Come to My Window

etheridge.JPG Some punk analyst (No really, some Punk Ziegel & Co. analyst) is accusing the Fed of forcing the major banks to borrow from the discount window. Market analyst Richard Bove thinks Bernanke sweetly serenaded JPMorgan, Bank of America, Wachovia and Citi to a tune of “Come to my window / Borrow cash, even though you don’t need to / Come to my window / I’ll cut rates soon.” From MSN:

The discount rate, though lower than it was last week, is still higher than the 5.25 percent federal funds rate, which is what banks pay to borrow from one another. Plus, because of the $38 billion in cash the Fed has pumped into the system, banks are charging only 4.9 percent for overnight loans, Bove said. A statement from three of the banks that borrowed from the discount window said they wanted to “demonstrate the potential value of the Fed’s credit facility and encourage other banks to use it.”

The whole thing was a “P.R. gig,” like getting knocked up by David Crosby. The banks took the dough to remove the stigma on borrowing money from the Fed as a credit line of last resort (and of getting inseminated by a drugged out musician), and to encourage smaller banks to do the same.
Ahead of the Bell: Federal Reserve [AP via MSN Money]

The Fed Says…Something…or Maybe Something Else

Some quick and mixed reactions to todays Fed Statement. “The Fed eliminated a reference to a moderation in the housing market’s downturn and was vague enough on its future intentions to convince the assembled parties on trading floors and at computer desks that all was still ok, and if it wasn’t, the Fed would come in for the big rescue, or something like that,” Market Beat’s David Gaffen wrote under taunting headline “Stagflation Rules! Buy Stocks!”
“The Fed’s statement was as close to sarcasm as you might ever expect to hear from that august body,” Barry Ritholz said.
“Quiet Carney. I’m trying to pretend I know John Mack’s assistant,” Bess Levin told us.
We’re hardly going to pretend we have some deeper insight into the meaning of today’s Fed statement than the equity markets or the bond markets. (Or that we can tell whether the various movements of stocks and bonds following the release mean equities and bonds agree or disagree on the statement.) So we’re going to ask the smartest people we know—you—in the best way we know how—a reader poll.

Federal Reserve: A DealBreaker Reader Poll

The Federal Reserve is meeting for the last time this year today. A statement is expected a quarter past two this afternoon. So we thought we’d take a quick reader poll in advance of the statement on the question of what the Fed will do.

Make Free Online Polls
  • 07 Nov 2006 at 11:08 AM
  • Citicorp

The Wound The Financial Press Will Never Let Heal: Jamie & Sandy

Has there been a news story about JP Morgan CEO Jamie Dimon in the last year that hasn’t mentioned his famous falling out with his mentor Sanford Weill? Dimon gets the CEO slot, and it’s all about getting fired by Weill. Dimon is “expected” to get the chairman of the board seat? Yep, more about Sandy. Now the members are voting him onto the board of directors at the the Federal Reserve, and sure enough it’s mostly about the famous break-up.
How is Dimon ever expected to move on if everyone keeps bringing up his ex?

Jamie Dimon may end up succeeding Sanford Weill after all — at the New York Federal Reserve.
Eight years after Weill fired Dimon, his heir-apparent at Citigroup Inc., Dimon is slated to replace his former mentor as a director at the Fed’s New York branch. Dimon, 50, is now chief executive officer of rival JPMorgan Chase & Co. Weill, 73, retired in April as chairman of Citigroup, the biggest U.S. bank. His term as a Fed director ends Dec. 31.
The Fed’s members began casting their votes yesterday for Dimon and PepsiCo Inc. CEO Indra Nooyi, who’s seeking reelection. Citigroup and JPMorgan, the third-biggest U.S. lender by assets, are members of the New York Fed, which helps supervise the industry and set monetary policy.
Dimon worked alongside Weill for 16 years, beginning as his assistant at American Express Co. The two native New Yorkers shared a knack for making profitable acquisitions and slashing expenses. Their working relationship ended when Weill ousted Dimon following a series of personal and policy disputes.

JPMorgan’s Jamie Dimon Nominated to Replace Weill at NY Fed [Bloomberg]