Godman Sachs' Take On Bernanke's Press Conference

Tyler Durden's picture

From Goldman's Jan Hatzius, who was probably typing while he was being interviewed by CNBC:

BOTTOM LINE: Bernanke downplays likelihood of QE3 due to reduced deflation risks.
1.    Fed Chairman Bernanke’s press conference included many details but few major surprises. On activity, he expressed relatively low conviction, saying “We don't have a precise read on why this slower pace of growth is persisting” (note that quotes come from the real-time transcript, which may be revised slightly). However, consistent with the FOMC’s forecasts (see below), he emphasized that he thought that some factors restraining growth were temporary.

2.    On inflation, Chairman Bernanke also cited temporary factors, particularly a pickup in auto prices related to supply chain disruptions in that sector.

3.    Guidance on the near-term policy outlook was relatively clear: more quantitative easing is unlikely due to reduced deflation risks. He gave two lengthy responses on this issue, and made clear why conditions last year differed from today. Most importantly: “at that time inflation was low and falling, [and] many objective indicators suggested that deflation was a non trivial risk”. He also noted the pickup in payroll employment over the last few quarters.

4.    At the same time, his remarks hinted that the FOMC has in fact discussed easing options. Specifically, he said options could include: 1) securities purchases, which could be structured in various ways; 2) a cut in the interest rate on excess reserves; 3) guidance on how long the Fed will wait to sell securities; and 4) or “a fixed date to define extended period”. With regard to the extended period language, he revised his remarks from the last press conference, in which he said the extended period language meant “there would be a couple of meetings probably before action”. Today he said: “I think the thrust of extended period is that we believe we're at least two or three meetings away from taking any further action, and I emphasize ‘at least.’”

5.    The Fed revised down its central tendency forecasts for GDP growth in 2011 to 2.7-2.9% to from 3.1-3.3%. It also reduced its 2012 GDP forecasts. For 2011, the cut was slightly smaller than we had expected, but for 2012 it was a bit larger. The committee also revised up its forecast for core inflation by 1-2 tenths, a bit more than we had anticipated.

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baby_BLYTHE's picture

they were too busy running the markets down during the press conference

TruthInSunshine's picture


This is ex-Reagan Budget Director David Stockman on the Dylan Ratigan show today talking about failure of Bernanke, QE1 & 2, etc., and the Greatest Heist ever by Wall Street from Main Street, and is EPIC.

Tyler - can you please make this a separate article with video?


Old Timer's picture

That interview of Stockman is awesome. Nails the fact that many of the jobs flushed during the recession were bubble jobs and that almost everything that's been done since 2008 has been done to help the banks, not the average citizen. 

TruthInSunshine's picture


The housing/real estate bubble took in refugees who lost their manufacturing jobs.

These people became the carpenters, drywall installers, electricians, bricklayers, landscapers, real estate agents, mortgage brokers, loan officers, appraisers, equipment operators, etc. etc. etc.

But alas, these jobs were quite 'transitory,' to use one of the Bernank's favorite words.

Mike2756's picture

They don't know why? Are they joking? What exactly did he learn at MIT?

SheepDog-One's picture

We printed and pumped $27 trillion at least to the world bankers, USA and world back in a depression....hmmmm looks like I need to go read some more egghead books, because at this point I'm stumped.'

P.S. I'm just taking a shot in the dark here, but let's print more money? Yea or nay?

Yours Truly, Ben Shalom Bernank.

Cdad's picture

What exactly did he learn at MIT?

They learned not to talk bearishly until all of the short bets are placed.  Soon enough.  

We all know what the QE3 catalysts is.  And we all know that QE is the only explanation for the levitating S&P.  Either this, or the equity market has changed from a forward looking discount mechanism to a backward looking, mental patient.

Gringo Viejo's picture

Lacking a"precise read" perhaps it's time to bring in a phrenologist. Gves me goose bumps just to think about it.

cosmictrainwreck's picture

WTF...how do you get junked for that? Phrenologist - ha! Yeah - could probably use a good phlebolomist, too... maybe a frontal lobotomist.... lulz

Gringo Viejo's picture

thx... some know what phrenology is. Some are born great, some achieve greatness, yet others, have a great thirst upon them.

sitenine's picture

We don't have a precise read on why this slower pace of growth is persisting.

That's because economists do not understand the exponential function, nor do they understand that we are at a critical mass.

I believe that many efficiencies can still be achieved, sure, but we will hit a wall even if we are ever able to reach 100% (by definition). Economic output is dependent upon energy; energy of any kind, the type is irrelevant to the point I'm making. In the long run, the world economy can not grow without perpetually increasing energy supplies. That brings me to growth. A contemporary 'healthy' economy must maintain at least 2-3% year over year growth for perpetuity. Therefor, in the economic sense, we know that growth is a geometric function. Economists do not understand the geometric function. A bachelors degree doesn't require anything past college algebra. Infinity means nothing to them.

monopoly's picture

This is madness. Absolute madness. This is what is running our country. We are doomed. Need a bigger vegetable  garden. Got plenty of ammo.

Greeny's picture

Yes, buy couple of goats as well. And few cases of

Canned Food :)))

That's what happens when carpenter dude, trying to understand

Fed policy.. Don't bother, Bob, or at least ask your financial

adviser, if you really care..

SilverDosed's picture

Only a Snopes would actually pay for a goat.

SheepDog-One's picture

Bernank seems mystified by what it all means, baby. Perhaps its just time to shoot that piece of shit in the head.

scatterbrains's picture

so if the hedgies smell some pussy up in Bernank and decide to take the market down hard. Does the Bernank flinch and start printing or does he stand firm like a man and hope that value investors will come in at some point? Will be interesting to see.

SheepDog-One's picture

Bernank is the fiddler on a hot tin roof! Oy Vey!

rosiescenario's picture

" La-Z-Boy (LZB -11.6%) plummets after Wall Street Strategies analyst Brian Sozzi cuts shares to Hold from Buy, citing “basically non-existent” retail store traffic and rising commodity prices. La-Z-Boy met FQ4 earnings expectations, but CEO Kurt Darrow notes consumer buying attitudes "lacking the same robustness" seen in the early months of 2011."


...forget GS...LazyBoy tells you all you need to know about the state of the U.S. consumer

the not so mighty maximiza's picture

sleeping on the floor bitchitz


SheepDog-One's picture

La-Z-Boy....easy to fix this just run Baseketball free on NFLX for a while.

plocequ1's picture

Or some Seymore Butt flicks. That reminds me. I need to clean my La-Z-Boy. Very sticky.

bigdumbnugly's picture

i guess from reading this someone is going to have to define "temporary."

and hopefully not temporarily so.


mayhem_korner's picture

Temporary (temp-uh-rar-ee), adj. 1. until I change my mind. 2. until things change.  3.  until my lip stops quivering.

bigdumbnugly's picture

that's kinda what i figured.  at least temporarily.

MrBoompi's picture

“We don't have a precise read on why this slower pace of growth is persisting”

WTF??? Does he ever step outside of his office or read a newspaper? Either he's a liar or he's clueless and either option doesn't engender confidence in this man.

SheepDog-One's picture

Hmmmm well Ben Im just guessing here, but maybe the persistent slowdown is due to the record high unemployment, record high forecloseures, record high bankruptcies, and the fact we shipped all our jobs overseas for EZ credit loans to run your fucking Keynesian BUBBLES over the past 30 years HUH??

Dick Darlington's picture

Nooo, that can't be it. It's because it snowed first, then it rained and then came the sunshine. All of these harsh weather conditions are causing various kind of obstacles for the boom to blossom. But it will pick up next quarter, he promised. =)

Rynak's picture

Why does he not blame it on all the black swans recently? It's plausible, half-true AND temporary..... man, do i need to do everything here? They even fail at lying..... and i'm not even good at lying, because of my mindset.

ghostfaceinvestah's picture

A lot of foreclosures are moving through the pipeline = less squatter stimulus.

This also leads to lower house prices, as we have seen recently, which hurts consumer sentiment as they see their neighbors lower asking prices over and over.

The bank balance sheets are still not believable because of the overhang of toxic mortgages.

In the end it all comes down to the mortgage/housing market, and that stupid fucker still doesn't get it.

TruthInSunshine's picture

It's all about jobs. This is why we're headed for a depression (we are probably there if one were to deduct government transfer payments in the form of Social Security, Unemployment Insurance, Disability Benefits, Medicare, Medicaid, SNAP, and other programs) no matter what Bernanke does. In fact, Bernanke has only hastened the depression by artificially stoking the cost of living and prices of necessities against an extremely weak consumer backdrop with high levels (and growing) of structural unemployment.

Housing is an important industry, and so are autos, but jobs is the driving force behind all purchases made, and jobs creates the REAL virtuous circle (not the fake one Bernanke speaks of regarding 'wealth effect' by higher asset prices) of more consumption leading to more employment leading to more economic growth and wealth.

As far as housing, banks and GSEs have a massive crisis on their hands, as foreclosures have stalled out due to what are really serious legal issues (they claim its for reasons of too much volume, etc., but they lie, as they don't want to risk losing more and more cases under the MERS broken title scam).

ghostfaceinvestah's picture

Like it or not, our economy is highly levered to Residential Investment for growth.  RI won't grow until the housing/mortgage mess if dealt with, and thus no job growth will result.

The vast number of underwater borrowers also hinders labor mobility, which also hurts the job market.

Not to mention the impact on consumer spending from having so many people undewater, and growing more so with every drop in house prices.

No way do we recovery with 25% of mortgage holders underwater.  Job growth cannot magically appear under such a condition.

oldman's picture

Dear Truth,

I agree and found this comment disingenuos because stupidity alone cannot explain it.

We don't have a precise read on why this slower pace of growth is persisting

I am rather surprised that no one ever asks why we don't spend six hundred billion dollars on repairing and up dating the sewers, water pipes, roads, bridges, gas lines, etc. and see what happens. For example, would it not be more productive to SPEND the money and create work for everyone than just lend it to the banks to lend it to the banks to re-lend it to the banks--------ad infinitum? Yes, it is a re-distribution of wealth but so what? We have the willing bodies and they have the need to earn and we have the money------or at least we can borrow the money from your precious Fed----in any event this is not a difficult or complicated problem if you ask anyone except a banker or pol.

The worst that will happen is that even if half is stolen the other half will not have to trickle down but rather, flow directly into the economy and our SOCIETY will blossom, if not fully bloom--------if we are going to print money let's spend it and not just sit around wringing our hands over philosophical positions. All those 'isms' are tools designed to balance the society----and not to get stuck on.


TruthInSunshine's picture


oldman, you nailed it.

Had our reps and the officials they appointed (Bernanke, Paulson, et al.) taken the money used to bail out toxic financial institutions, and had they instead merely protected depositors deposits via the FDIC (and small/mid-sized business accounts, tha may have exceeded FDIC limits, through backstopping CEDARS and such), and had they let all the poker players and pigs at the CDS/MBS/CDO table (Goldman, JP Morgan, Lehman, Wachovia, BofA, Wells Fargo - again, protecting deposits only) and had they spent 1/2 the amount sucked away through TARP, TALF & Quantitative Easing on infrastructure replacement (which is actually very much needed), it would have yielded a result so superior in terms of job creation and consumer confidence and retailer health, that we might be on the cusp of being able to reboot our economy now, and with the bonus of getting rid of much of the dead weight of the Wall Street Casino Skimmers, and getting rid of the whole notion of government backstopping of risk takers, express or implied (which has sucked taxpayers dry, indebted them and their children, and crushed savers with near 0% returns on savings, which are essential for proper capital investment).

Jobs is the primary foundation of a healthy economy.

Those who speak of "until housing rebounds" miss the whole point.

The housing bubble was simply a conduit by which all the manufacturing jobs lost (about 9 million since Clinton totally liberalized trade with China and Mexico) were papered over as those people went to temporary employment in the construction/real estate/mortgage industries - with those jobs, let's call them....transient (as we now know).

Permanent jobs. Good wages and benefits. Low barriers to starting businesses. Rewarding true capitalism and the type of risk taking with one's own money that leads to hiring. Lowering regulations, red tape, onerous and many levels of taxes and tax complications (an IRC that's 60,000 pages long), infrastructure improvement and replacement on an efficient basis - that's the recipe for a turnaround.

Jobs first. Nurtured and grown under the right environment, hassle free, and even incentivized.

That will spawn lasting and real demand for consumption and trade and commerce of all types, which will lead to more job creation.

Burn Wall Street to the ground, and pay the remaining bankers what they're really worth, which would be far less than the average engineer, chemist, architect, teacher, police officer, iron worker, carpenter...


Cdad's picture

Either he's a liar or he's clueless

He is a liar...and the biggest crook that ever walked planet Earth.

SilverDosed's picture

He's just a front-man, the real crooks are pulling the strings. How else do you explain a small-town jew controlling the entire world's money supply.

NotApplicable's picture

There's no lie there, nor is he clueless. What he is, is a man with a very precise choice of words to convey a very precise meaning. He didn't say they had no read, but lacked a precise one.

Now, for a sophist, this is pure genius. Why? Because if you call him on it, it is simple for him to discuss any number of economic indicators that no longer function as they did in the past, and everyone knows it. The fact that they destroyed the indicators is immaterial, as the discussion ends as soon he stops talking, and you'll get no follow-up to pursue the point.

Rynak's picture

The purpose of language is to communicate meaning. When someone intentionally phrases something in a way, that conveys false or untrue meaning, then he is lying. Sure, one may argue on a "technical" basis, but that in this case ignores the context (which is one of the primary tools of deception: Break things. Whatever you want to achieve, break things first, do not get caught, and now that the logic is broken, you can make anything apparently right and true).

Yes, i'm nitpicking.... yes, i know that this is not what you meant. However, the reason why i wrote the above was not to debunk you, but to add a little bit related info, which IMO is important to anyone who values rightness, truth and honesty. I agree with what you were trying to show in your post.

mayhem_korner's picture

more quantitative easing is unlikely due to reduced deflation risks.

Translation: forest fire is burning well on its own.  Shouldn't need any more gasoline...er...until we need to skip it over that road over yonder.

SheepDog-One's picture

I think Shalom Bernank come by and went on a junkfest.

mayhem_korner's picture

Indeed.  Actually, I think it's one of Schumer's goons, lost on the wrong post.  :D

SheepDog-One's picture

I bet Schmuckey Schumer has a whole army of goons, probably has 10 of em just to handle his man-tan applications.

SheepDog-One's picture

Bens a Zionist Jew, he knows exactly what hes doing.

Dick Darlington's picture

At the same time, his remarks hinted that the FOMC has in fact discussed easing options. Specifically, he said options could include: 1) securities purchases, which could be structured in various ways

Benny, just one more tit for us to suck pleeeeease. We promise we'll get our noses clean after that. We promise. This habit is just, eh, ya know, transitory and shit. Just one more tit.

SheepDog-One's picture

I'm hurtin here Benny! Come on pal I need a fix, just one more Hefty bag full of free crack rocks....just for old-times sake...come on whaddaya say pal?

KickIce's picture

Translation:  We don't own enough property yet and we feel we can suck a little more out of the average joe.

NotApplicable's picture

A bankruptcy in every pot!

Superslam's picture

Here's a clip showing the Fed's post-QE2 policy as it unfolds:



cosmictrainwreck's picture

as sound a plan as any proffered.........