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Bernanke Loses Control of the Fed, the Markets, and His Legacy With Once Sentence

Phoenix Capital Research's picture




 

 

Ben Bernanke has lost any last shred of credibility he might have ever had.

 

The Fed no longer believes in QE. And for good reason. We’ve seen QE 1,2,3,& 4 and yet we’ve not seen any meaningful uptick in employment or GDP growth. Indeed, since Bernanke took the reins at the Fed we’ve not seen a single year of 3+% GDP growth.

 

In this light, several Fed members are no longer fans of QE. Some of them want it tapered soon. In fact HALF of them want QE STOPPED completely by the end of 2013.

 

And yet, Bernanke decided that despite this dissent, he should make a speech stating that “highly accommodative policy” should continue along with the usual claims that inflation is under control.

 

These were the words of one man, not the Fed.

The markets exploded higher on Bernanke’s comments while the Dollar collapsed. And Bernanke now has a mutiny on his hands (one Fed Governor has already resigned in the last 24 hours).

 

Given that the Fed has been the primary driver of just about everything for the last five years, a fractured Fed is very bad news for the markets. Sure, we will see prices spike in the near term on Bernanke’s comments, but he has made it clear, point blank, that he has lost control of the market and really doesn’t have a clue what he’s doing.

 

This man knows only one thing: bubbles. Congratulations Bernanke, you’ve created an even bigger bubble than that of 2007. Your latest statements about providing liquidity have destroyed completely destroyed your credibility as Fed Chairman. And they’ve bought you at most a brief pause before this whole mess comes crashing down.

 

The entire environment feels just like 2007 again. The only difference is that this time everyone knows that we’re on shaky ground and has an eye for the exits. And in this mess, Bernanke announced nothing new, but simply stated that he remains a money printer.

 

For more market insights and Special Reports on preparing for the inevitable stock market bubble bursting, visit us at www.gainspainscapital.com

 

Best

Graham Summers

 

 

 

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Thu, 07/11/2013 - 20:09 | 3743400 Duc888
Duc888's picture

TheBernanke = pole smoker.

Ben is a debt pimp.

A one trick pony. That's all he can sell, more debt.

Thu, 07/11/2013 - 19:37 | 3743317 BitingTruth
BitingTruth's picture

Why does everyone (most) on ZH insist on ignoring Econ 101...there are "two" sides to the "market" equation...  However, since 1980, the MSM (and most here born during this period) all that is proposed is "more" supply-side, appraoch with montetary policy "controls".  Correct me if I am wrong, but the many salient charts on this site brilliantly show that Demand-side, Fiscal Policy did quite well to build this country into a global economic leader.  The supply-siders have erased all of that in a short 30 years.  The direction is clear.  It is a zero-sum game, if the 1% have all there is to have...print all you want, but it only grows the vast sea of dilution...there is nowhere to run on the Titanic.

Thu, 07/11/2013 - 18:18 | 3743105 ThisIsBob
ThisIsBob's picture

Tell it to price.

Thu, 07/11/2013 - 17:58 | 3743042 Jayne Dough
Jayne Dough's picture

BRAVO!!!  He's a disgrace and will go down in history books with as much negative as obama

Thu, 07/11/2013 - 19:17 | 3742981 ebworthen
ebworthen's picture

So Graham, what was the one sentence, verbatim?

p.s. - CNBC tonight running a "Markets at all time highs!" special in Kudlow's time slot, so Bernanke hasn't lost control yet.

Thu, 07/11/2013 - 17:34 | 3742957 moneybots
moneybots's picture

"Bernanke became useless with Obama's public humiliation."

Bernanke was useless well before that.  The man who claimed to be a major student of the Great Depressiion, still hasn't ended a depression that is already half a decade long.  47 million people on food stamps.  14.3% underemployment.  People suffer while Bernanke plays monetary games that caused their suffering in the first place.

Thu, 07/11/2013 - 17:38 | 3742970 thomcat00
thomcat00's picture

Benny's studies of the Depression focused on Parker Bros' Monopoly.

Thu, 07/11/2013 - 17:32 | 3742949 lynnybee
lynnybee's picture

i can't take much more.  how long have i been on ZEROHEDGE now waiting for this collapse.... years?  me, a basic person who knew nothing of finance, markets or the Fed has gotten sucked so deep into this story that i walk around mumbling to myself about bullion, smack-downs, b.t.f.d., stocking, stacking .   COLLAPSE ALREADY, my friends don't understand about new monetary systems, paper money, etc. ..... all they know is that their 401k's are great, everyone is spending money like fools, & i'm getting ready for the end of life as we know it.   signed:   Had it in Ohio.

Thu, 07/11/2013 - 20:07 | 3743406 joego1
joego1's picture

Personally not looking forward to a colapse. I think limping along like the Japanese have done for 10 or so more years would be better for me personally. For my kids I think a financial reset would be better since then we can clear out the old debt and hopefully learn from our mistakes. As for the stock/bond market losing almost half of my retirement was enough for me to realize that I'm not going to live long enough to invest my way out of the next fiasco which can happen at any time.

Thu, 07/11/2013 - 18:01 | 3743060 MeelionDollerBogus
MeelionDollerBogus's picture

Been busy or I'd do up the doomsday clock as a zerohedge clock with the faces changed to the Bernank, Tyler Durden and a few other choices ... maybe Krugman? Got the files ready for some photoshopping but I'm at work now, been busy.

Thu, 07/11/2013 - 17:38 | 3742969 Doctor of Reality
Doctor of Reality's picture

I hear ya!

Thu, 07/11/2013 - 17:24 | 3742918 michaelsuede
michaelsuede's picture

Why do people down-vote these articles?

They are consistently spot on every time.

Thu, 07/11/2013 - 16:53 | 3742803 KingTut
KingTut's picture

Politics at the Fed are getting very weird.

IMF, Lagarde and BIS mysteriously ciriticize the US Fed severely for their QE policies. (exporting too much inflation?)

Obama publicly fires Bernanke in what can only have been extremely humiliating and infuriating experience.

Bernanke uses word 'taper' in public and bonds and equities swoon.  (see Mr President, I was right.) Propaganda channels back off the 'T' word.

FOMC notes announce HALF of comittee members want to STOP QE in 2013!

Bernanke continues to talk his pro-QE line.

WTF is going on!?

Bernanke became useless with Obama's public humiliation.  He has no political power at this point, except what he can manufacture by going public.  MSM will still broadcast his every word because he's the chairman.  However, without leadership, the Fed may descend into infighting and back stabbing, which might explain the extraordinary public split over stopping QE.  Or everybody will just play nice and rally around the presumptive nominee.

But what power group is pushing for this cessation of QE?  Which side is Obama on? Is he a Krugmanite, or has he been reading Von Mises under the covers with a flashlight?  Where is Robert Rubin and the main banks on this?  Surely they are not ready to go it alone without mama Fed's milk?  Is something about to happen that changes the SOP?  Or is this all made-up theater to keep us guessing?

GAK!

 

Thu, 07/11/2013 - 16:57 | 3742816 lakecity55
lakecity55's picture

Chalky does what The Tribe tells him to do.

Thu, 07/11/2013 - 17:35 | 3742959 Itgoestoeleven
Itgoestoeleven's picture

And you do what your mommy tells you. Grow up!

Thu, 07/11/2013 - 16:37 | 3742759 rsnoble
rsnoble's picture

Guess the military better go pick another fight.  Or some other crazy ass bullshit.

Thu, 07/11/2013 - 16:00 | 3742613 Bangin7GramRocks
Bangin7GramRocks's picture

Jesus Titty Fucking Christ! Would somebody please proofread! A fuck up in the title?!?!

Thu, 07/11/2013 - 17:36 | 3742962 thomcat00
thomcat00's picture

Methinks we have bigger worries...

Thu, 07/11/2013 - 17:01 | 3742832 lakecity55
lakecity55's picture

A job opening at ZH! The economy is on the mend!

Prufreeders, Bit-Chez!

Thu, 07/11/2013 - 15:57 | 3742600 ALANBEEKMAN
ALANBEEKMAN's picture

Ben's theme song:

"I'm Forever Blowing Bubbles"

Thu, 07/11/2013 - 16:52 | 3742801 Dr. Acula
Dr. Acula's picture

"B..B..B..Benny and the Inkjets"

 

Thu, 07/11/2013 - 15:35 | 3742516 robnume
robnume's picture

The "fractured Fed" is Amerika's version of Rocky and Bullwinkle's "Fractured Fairy Tales". Perhaps Helicopter Ben would benefir from watching a few of that same series "Aesops Fables". Na, never mind. He's too stupid to "get it".

Thu, 07/11/2013 - 15:02 | 3742377 diogeneslaertius
diogeneslaertius's picture

pretend mutinies are a great way of cultivating the greater fools

Thu, 07/11/2013 - 16:25 | 3742703 max2205
max2205's picture

GS, unlike you, at least Ben had some Credibility to begin with..... oIo

Thu, 07/11/2013 - 16:25 | 3742698 NotApplicable
NotApplicable's picture

Thank God I'm not the only one who sees it all this way!

What's so hard to understand that Bernanke does NOTHING? He is but a facade of management.

The instant it was announced he was too busy to be the chief a-hole at the J-hole, it was obvious that the orchestration was under way to throw him under the bus. What's even funnier, is that the conflicting event on his calendar was never mentioned, that I saw.

The idea that he "lost control of the Fed" is laughable on its face. He never had control, and likely, would be smart enough not to want it (and be deserving of his fate).

Thu, 07/11/2013 - 17:03 | 3742836 lakecity55
lakecity55's picture

Out with the old J**, in with the new J**

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