Rosenberg With Observations On The Last Fed Chairman Resignation
With each passing day it seems that the impossible is about to happen, and Bernanke may very well not get the necessary 60 votes he needs from an increasingly skittish Senate. Our advice to Mr. Bernanke - resign with what is left of your integrity (and we use the word loosely) intact. As this week has shown that the impossible seems again to occur all too often, here is Rosie with observations of what happened the last time a Fed chief decided to take the high road out:
AS IF WE NEED ANYTHING MORE TO WORRY ABOUT
Greece. Portugal. Ireland. China tightening. Bank bashing. Foreclosures. The housing and mortgage market. Jobs. The Fed’s exit strategy (if it happens). And now we have Ben Bernanke’s confirmation hearings in the Senate and this is not a ‘done deal’. His current term as Fed Chairman ends on January 31 and a vote has been delayed until next week at the earliest – and he needs 60 supporters and a few Democrats have already said publicly that they will not support his reappointment and therefore he will need GOP help. Volatility is still very cheap even after yesterday’s jump.
The last time we had a sudden and unexpected turnover at the Fed was back on June 2, 1987 when Paul Volcker surprisingly announced his resignation. That day, the S&P 500 slipped 0.5%, which was a big deal then since we were in the throes of a major rally, the yield the 10-year note surged 27 basis points, the VIX index jumped 5%, the DXY was crushed 1.2% and gold rallied 1.3%. Keep that in your back pocket just in case.
We sure are keeping it in our back pocket.