Rosenberg's Takeaways From Bernanke's Speech: "Cause For Pause"

Tyler Durden's picture

Yesterday we brought you Goldman's quite bearish takeway on Bernanke's speech (excluding the highly irrelevant Jamie Dimon monologue detour: we can't wait to hear what the JPM CEO says once it is announced that Glass-Steagall is being reinstated). Below we present Rosie's key takeaways on Bernanke's remarks.


  1. The Fed seems to have cut its second-half forecast of near-4% real growth to something closer to 2.5-3.0% ... growth is now seen to pick up just "somewhat" in the second half of the year from what looks like a sub-2% trend in the first half. Not exactly a ringing endorsement for pro-growth cyclically sensitive investments.
  2. The broad focus seems squarely on the labour market — what seems to be Bernanke's greatest worry is lack of traction. The words "jobs", "labour", "employment" and "unemployment" collectively showed up no fewer than 23 times. The comments on how aggregate hours worked are still more below the cycle high than was the case at the depths of the 1982 should be resonating on even the most ardent growth bulls and inflation-phobes.
  3. On fiscal policy, his comment suggests that he is concerned that the zealots will tighten the budgetary screws too hard over the near term — hence his emphasis on the need for "long-term" solutions.
  4. The Fed expects commodity prices to stabilize and as such for inflation to decline going forward. Interesting to see the analysis that ALL of the build-up of inflation so far has been due to gas prices, which seem to have peaked.
  5. Another QE round cannot be dismissed after reading this sombre assessment of the macro backdrop; at the least, the funds rate stays on hold and that should provide an anchor for yields out the steep Treasury curve.

Bernanke said the 'jobs situation remains far from normal" and as such, this recovery cannot be regarded as being "truly established." That is quite an admission — free money, a tripling of the Fed's balance sheets and 10% deficit/GDP ratios have fallen short of establishing an established recovery. Cause for pause.

Source: Gluskin Sheff

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FOC 1183's picture

Jamie's monolog detour was so rhetorical I almost expected Bernanke to move on to the next question

Problem Is's picture


"Oh, woh, woh, Jamie's cryin'..."

Arrowflinger's picture

There was another take to be had in Dimon's recitation of all of the fraudulent financial contrivances now banned, dead, or producing entity-threatening losses.

If FIRE became an unsustainable 40% of markets and 20% of the economy, doesn't his admission that the engines of this ascendancy are now blown translate into that the reversion to mean will require 50% of banks to go away?

JPM only exists because of trading profits from getting free Fed money and buying $UST's  and commodities. Even those are not going to outrun costs and shrinking banking revenues.

gabeh73's picture


I made this video to explain why the economy is tanking and what will be required to get QE3

Chuck Walla's picture

I tend to agree with you. I think its let us suffer, then Braack can come to the rescue. But this is all about timing. No way Big O can get re-elected if this goes on into 2012.

Ray1968's picture

Why isn't Jamie Dimon in jail???

schoolsout's picture


Jamie Dimon Becomes Wall Street’s Hero Figure
SRV - ES339's picture

Weiner's career is over for texting some lewd pics, and this sorry excuse for a human being is whining about regulation (after he and his buddies blow up the world economy) while his income skyrockets to $50M a year!

Jail(?)... screw that! When does congress pass the justifiable homicide waiver for bank CEOs?

hotkarlandtheclevelandsteamers's picture

Rosie was bearish at 700 on the S&P went bullish at 1360...this guy is the ultimate contrarian.

Gubbmint Cheese's picture

cherry picking stats here a bit.. Rosie was bearish at about 1,200 (before the top) and continues to be bearish. A few weeks ago he acknowledged that the market could go higher because of technicals.

I too am bearish - but I accept the market 'could go higher' before it ultimately blows up.

there is a big difference between that, and being 'bullish'

ihedgemyhedges's picture

Don't forget Bill Gross.  Shorted treasuries 50 bps ago and said go long equities at same time............

snowball777's picture

Growth: Sub-2% H1, Sub-1% H2.

Job counts mean squat: aggregate income is the only meaningful metric for labor recovery.

3. The "just the tip" method of fiscal reform.

5. Yes, yield will be nailed to the floor for years.

Who's gonna ride, bitchez?

Cdad's picture

(excluding the highly irrelevant Jamie Dimon monolog detour: we can't wait to hear what the JPM CEO once it is announced that Glass-Steagall is being renstated)

What, does anyone really doubt: 1. the power of J. Dimon whining?  2.  the fact that over regulation is the true source of criminal syndicate Wall Street banker problems?

/sarc off

Anyway, isn't it high time that J. Dimon considers spending more time with family?

JohnG's picture

By "family," do you mean worms?

Cdad's picture

We all know that bankers have been working very hard on the wealth effect...which has bankrupting all of us.  And I am sure the wife and kids would benefit, as would a grateful nation, if J. Dimon would simply decide to, at least, take the summer doldrums off.

That is what I mean.


JohnG's picture

OK.  He should just retire and die imho.

Worm food.

Also, there is no better fertilizer than composted manure.

inkarri9's picture

I found it a bit comical that it was Jamie D. who said something along the lines of "the bad mortgage guys are gone" in his speech but yet isn't he one of the bad mortgage guys?  


TaxSlave's picture

"Cause for pause."


Yet there will be no pause.

You are owned by this faux debt, they will see you killed before they allow you to repudiate it.


Hedgetard55's picture

Rosie still bullish?

zen0's picture

It is not surprising that Bernanke focuses on employment. This was the whole purpose of the Keyne's General Theory of Employment, Interest, and Money.


Also, as Keynes notes from the Preface to the German edition:


Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of the production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire .

SheepDog-One's picture

Hard to have employment grow when youve sold all your production overseas and the nations #1 employer is Walmart, #2 employer apparently McDonalds.

Cleanclog's picture

Yep.  Disney is cutting jobs now.  All the fantasy and magical thinking is on Wall Street, not Main Street, Fantasyland nor the Magical Kingdom.  The Happiest Place on Earth is no longer the Disney Parks but the banking basements.  Sigh.

MarketTruth's picture

So if growth is 2.5% yet REAL inflation is 6% that means....

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Exactly, we are going backwards in real terms and nobody except intelligent people ever mention that fact.  Good job!


Tuco Benedicto Pacifico Juan Maria Ramirez

NotApplicable's picture

2.5 steps forward and 6 steps back?

AldoHux_IV's picture

Inflation-phobes or people just concerned about currency destruction in a time of depression?

Quinvarius's picture

I have yet to see anyone bullish after Bernanke's comments, even though I heard QE and low rates forever.  I don't like stocks.  But I must now conclude they are due for a big rally.

Boston's picture

Um, what did the markets do IMMEDIATELY after Bernanke's Jackson Hole speech in late August of last year?

Quinvarius's picture

Bernanke started his speech at 3:45pm.  He announced continued QE 25 minutes and 40 seconds into that speech.  The fact that GS sent out multiple comments insinuating we are all doomed should have been a big tip off as to the reality of the situation.

SheepDog-One's picture

Really, well lets hear your opinion on how they plan on providing a QE that would fool anyone. What, they just print totaly imaginary money out of thin air? Its not 2008 anymore, thats not fooling anyone so how do you see a QE playing out?

Quinvarius's picture

Bernanke announced exactly the QE I was expecting.  Reinvestment of payments on existing balance sheet items and low rates.  I don't understand why everyone is in such denial.  It is like a mass psychosis.  And when I see that, I know a lot of people are wrong.  Reinvesting interest and principal on 2.5 trillion dollars is a lot of QE.  It is just an accounting gimmick to say it is all rollover.

SheepDog-One's picture

Theyre gonna roll it over, re-invest the interest? Ok well who is that supposed to impress? And who's paying interest? Certainly not Mr Market Frankenstein monster with his $8 billion daily crank habit.

gabeh73's picture


All the mainstream academics already support QE3. Sumner, Tyler Cowen, Paul Krugman: Now they just need to brow beat the tea partiers as the markets crash and the path will be cleared to renew the pruchases of US government bonds.

SheepDog-One's picture

Now that they have Mr Frankenstein Market hooked on a $7 billion per day crank habit, lets pause giving it to him and see what happens. This should be great fun to watch as Mr Market doesnt get his daily fix and goes on a murderous rampage thru the Wall St village.

Franken_Stein's picture


Frankenstein Market - I like that term.

Bernanke is assembling his monetary monsters in the cellars of Marriner Eccles building, to be unleashed on the American public at the next FOMC meeting.


TooBearish's picture

Have a salad Rosie and take a seat- lay off the eggs when u having "breakfast with Rosie"

spartan117's picture

Cause for pause?

I'll believe it when I see it.  Who's going to buy all those treasurys needed to pay for deficit spending?  Federal government going to cut 1.5 trillion from the annual budget starting July 2011?  Bring it.

Juice Box's picture

I read his "Breakfast with Dave" report every morning, and he always has great tidbits of info, but the guy has been way off on the market for a while.  After being a Bear for two years, he just went bullish one month ago - great timing.

He is better at bonds. 

Johnny Lawrence's picture

He didn't go bullish.  I wish people will read the full context.  He said that technically the market looked like it would go higher.  It wasn't a change in his fundamental outlook.

But I agree that he's missed the runup in equities over the last couple years, but he did call the 2008 crash and he's been hyping gold for at least the past 5-6 years.

If anything, I give him credit for speaking the truth about the economy despite being one of the most well-know economists on the street.  He doesn't cheerlead like everyone else.

hbjork1's picture

And it is one thing to be commenting on the market and another to be predicting FED pumping.  FED action probably has created much of the bull run.


SheepDog-One's picture

'This recovery cannot be regarded as being 'truly established'...LULZ yea real unemployment 25% at least, record high bankruptcies, worst housing market ever, 50 million americans only eat and live due to food stamps and 99 weeks of free govt checks, and the only economic activity is totaly synthetic 100% dependant on ZIRP free money flow from FED to banks to stocks to bonds.

#1 employer is Walmart, #2 employer apparently McDonalds, and Bernank dances on the head of a pin saying 'Welllll 'the recovery' is a bit short of being totaly confirmed right now'. Totaly tragicomedy is what it really is. And a stupid dumbed down general public to boot.

bubba1231's picture



The banks - especially JPM DID NOT cause the meltdown.  You want a culprit?  Look in the mirror.  The average American caused the meltdown as much as anyone buying into the real estate hype.  Throw in Barney Frank and others and there are your culprits.  The banks were just intermediaries...

Franken_Stein's picture


... but also main beneficiaries.

Don't let them off the hook here.


Problem Is's picture

"The banks - especially JPM DID NOT cause the meltdown."

Who are you? A sock puppet for Jamie & Lloyd?
The Wall Street TBTF derivative whores CAUSED the financial collapse...

Then used their bought, bribed and owned political useful idiots to bail out their loses with $$$Trillions in tax payer money and debt continuing to this very day...

Wall Street TBTFs looted Fannie and Freddie (a bad idea, agreed), for mega tax payer loses, legislated  by Wall Street political whores like Frank, Shelby, Dodd and of course Obama Bin Lyin'...

Wall Street caused the crash... Wall Street needs to pay... Jail time for Jamie & Lloyd, Amerika's Shoe Shine Boys...

JW n FL's picture
by bubba1231
on Wed, 06/08/2011 - 12:06




The banks - especially JPM DID NOT cause the meltdown.  You want a culprit?  Look in the mirror.  The average American caused the meltdown as much as anyone buying into the real estate hype.  Throw in Barney Frank and others and there are your culprits.  The banks were just intermediaries...



Pay Attention stupid.


Corporations Own the Lobby!


The Lobby Owns the Government!


Law Enforcement works for the Duly Elected Lobby Whores!


We the People = Screwed!


do you want to know who owns your favorite Republican? 


there is no difference between a republican and democrat.. other than what they say on T.V. for you to listen too.. the dog and pony show is nothing more than a show.. to keep people like you transfixed on singular thoughts that have nothing to do with the river of money that they all drink from.

Problem Is's picture

+5... Accurate analysis...

Cone of Uncertainty's picture

Jamie Dimon is a little cunt, fuck him.

Franken_Stein's picture


Asscunt, to be precise.

Btw, some days ago was 30th anniversary of the first HIV case in the U.S. .


Franken_Stein's picture


Does anybody still remember the 1907 collapse of the Knickerbocker Trust fund ?

It was horrible to say the least.