Everyone Hates Bernanke: Dow Drops 300

Some of the really reassuring quotes about today's bad Thursday on Wall Street:

"The problems seem to be intensifying. I can't remember a worse start to a year. We're in for some rough months.'' - John Carey, who helps oversee about $13 billion at Pioneer Investment Management in Boston, to Bloomberg

“Basically every day now, you have more and more investors leaning toward the camp that yes, this is going to be a recession, and it could be a severe one." - David Kovacs, a quantitative investment strategist at Turner Investment Partners in Berwyn, Pa., to the NY Times

And on Federal Reserve Chairman Ben Bernanke's rate cut?

"It's too little, too late, number one. I don't know where Bernanke's been for the last six or nine months, what planet he's been on, but he certainly missed the boat on this one." - Larry Edelson, senior analyst at Money and Markets, to CNBC

"It is going to take more than just monetary policy to clean up the mess we've made with this economy." - Art Hogan, chief market strategist at Jefferies & Co. to Marketwatch.

And Merrill Lynch posted a nearly $10 billion fourth quarter loss (worst ever in their books) - just like Citigroup did earlier this week!

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By Jen Chung in News on January 17, 2008 5:22 PM

Comments [rss]

REALITY CHECK

Ah, it's elementary, my dear friend. You must use your reasoning skills. Well-off Wall Streeters live in luxury apartments. They eat at high-end restaurants and shop at fancy boutiques. Wall Streeters get their money from..............

BMTDave

Uhhh...no; this news will affect anyone who has a 401k, especially if their money is in mutual funds.

REALITY CHECK

This news will affect the hoards of stock brokers and investment bankers, as well as luxury apartment landlords and high-end restaurant and boutique owners. Can we all hear the violins now?

Outter Burrougher

there's a great 10 page article up on nytimes.com ostensibly on Ben Bernanke, slated to appear this sunday in the magazine. While it is in large part about him (and relatively favorably at that), it also uses him as a framework for a brief history of the Fed. I read it in chunks throughout the day and really enjoyed it.

The most relevant point that it makes, though, is that the Fed does not magically control the economy. Essentially it controls the supply of money - what banks, investors and individuals do with that money is still entirely up to the person and the economy as a whole shifts long term based on things like education levels.

Also, in regards to the rate cut not being enough, the Fed controls specific rates that influences (very strongly) interest rates, but during the past couple of rate cuts, the banks did not cut their rates by a corresponding percentage.

But of course the investors and banks aren't going to blame themselves for anything.