Post-Mortem Of Bernanke's Prepared Remarks

Tyler Durden's picture


From SocGen:

Bernanke downplays costs of easing

Here's Bernanke's list of the costs/risks associated with further asset purchases, and his assessment about the severity of those risks:

1. On the cost that concern about exit will undermine long term inflation expectations: In Bernanke's words, "the committee remains confident that it has the tools necessary to tighten monetary policy when the time comes to do so". He points to recent inflation trends which remain subdued, and to inflation expectations which remain well anchored in Bernanke's view.

2. On financial stability risks: The Fed's longstanding view is that monetary policy is too blunt a tool to deal with potential mispricing of risk in various asset markets and instead these concerns should be addressed through supervisory channels. Bernanke appears to cling heavily to this view. He notes in his testimony that the Fed has substantially expanded its monitoring of the financial system. The Fed's approach to supervision of financial firms has also taken a more systemic perspective since the crisis. Bernanke acknowledges that a long period of low rates could encourage excessive risk-taking, but concludes that the potential costs outweigh the benefits of promoting a stronger recovery and more rapid job creation.

3. On the risk of future capital losses and their implication for the federal budget: Bernanke acknowledges, in-line with recent Fed studies, that asset sales in a rising rate environment could lead to a period of capital losses. This, in turn, may force the Fed to suspend remittances to the Treasury, which could have an adverse impact on budget projections. Bernanke downplays these concerns and suggest that the Fed's activities have to be viewed holistically. He notes that even in the case of sharply reduced remittances to the Treasury in future years, total remittances during the entire balance sheet expansion will have been larger than during the pre-crisis period. He also underscores that better economic outcomes will ultimately improve the budget situation, implicitly arguing in favour of further asset purchases rather than against them.

Leaning against fiscal restraint

Bernanke also warns that the sequester could impose additional near-term burden on the recovery. He cites the CBO's estimate that it will contribute to 0.6% of fiscal drag this year. This is on top of the drag from tax increases that went into effect on Jan 1. In the context of the fiscal tightening currently underway, Bernanke does not seem to be in a hurry to scale back QE in the near future.

* * *

Of course, none of the above commentary from SocGen does nearly enough justice to Bernanke's response to Senator Shelby whether the Fed's record balance sheet has ever been higher: "there are other central banks whose balance sheets have been this large, such as Japan."

Well, since it worked for Japan.

Finally this, which the market may want to pay attention to: Bernanke says there may be ‘frothiness’ in some asset classes.

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Tue, 02/26/2013 - 12:36 | 3277968 _ConanTheLibert...
_ConanTheLibertarian_'s picture

3....2....1....FUCK YOU BERNANKE!!!!!!

Tue, 02/26/2013 - 12:41 | 3277998 McMolotov
McMolotov's picture

Shorter Bernanke: "I'm gonna keep giving money to my pals for as long as I think I can get away with it. The rest of you can go fuck yourselves."

Tue, 02/26/2013 - 12:56 | 3278063 GetZeeGold
GetZeeGold's picture



Any word of the Germans and their gold?

Tue, 02/26/2013 - 13:05 | 3278074 SafelyGraze
SafelyGraze's picture

1. copy the nank text

2. paste into google translate

3. auto-detect language (from fedspeak to english)

"the committee remains confident that it has the tools necessary to tighten monetary policy when the time comes to do so".

[when the time comes to remove trillions of dollars from M2 or M3 or whatever, we can sell those treasurys and MBSs. that will be an episode to remember. bitchez.]

Tue, 02/26/2013 - 13:09 | 3278097 SafelyGraze
SafelyGraze's picture

"The Fed's longstanding view is that monetary policy is too blunt a tool to deal with potential mispricing of risk in various asset markets and instead these concerns should be addressed through supervisory channels. "

[monetary policy lifts all boats. which is unfortunate. we want to selectively lift housing and s&p. therefore we use .. let's call them 'supervisory channels' .. we need to manipulate .. um .. let's call it 'deliberately direct' .. certain sectors so that the numbers conform to numbers that would indicate economic health, while suppressing numbers that would indicate economic trouble]

Tue, 02/26/2013 - 13:14 | 3278112 McMolotov
McMolotov's picture

Any word of the Germans and their gold?

"What do you mean, their gold?" —Uncle Ben

Tue, 02/26/2013 - 13:18 | 3278139 AZLagun
AZLagun's picture

"We are all Germans now" - Uncle Ben

Tue, 02/26/2013 - 13:15 | 3278126 Moe Hamhead
Moe Hamhead's picture

Ben, I'd like to pick up some of my gold that your storing.  Sure, stop by in ---seven years!!

Tue, 02/26/2013 - 13:42 | 3278239 kliguy38
kliguy38's picture

Yes. "We HAD your gold and double dog fuck yo momma Hans" ..... 

Tue, 02/26/2013 - 14:06 | 3278339 azzhatter
azzhatter's picture

Italy has Bepe, we have Benny. Two comedians

Tue, 02/26/2013 - 12:38 | 3277977 buzzsaw99
buzzsaw99's picture

The Fed's longstanding view is that monetary policy is too blunt a tool to deal with potential mispricing of risk in various asset markets...


Translation: We blow bubbles, it's what we do.

Tue, 02/26/2013 - 12:40 | 3277992 Cognitive Dissonance
Cognitive Dissonance's picture

One size (always larger than the last time) fits all.

<OK.......on the count of three everyone BLOW.>

Tue, 02/26/2013 - 12:41 | 3278001 buzzsaw99
buzzsaw99's picture

Bernanke: How can there be a dump without first having a pump? Ebb and flow, ebb and flow...

Tue, 02/26/2013 - 13:48 | 3278252 francis_sawyer
francis_sawyer's picture

"The Fed's longstanding view is that monetary policy is too blunt a tool to deal with potential mispricing of risk in various asset markets..."


Translation: "The Fed's longstanding achievement has been that we're a bunch of BLUNT TOOLS, who can do no more than misprice risk & asset markets because we're rank academics when it comes to formulating monetary policy"

It's all in the SYNTAX, you see...

Tue, 02/26/2013 - 13:50 | 3278263 nofluer
nofluer's picture

So you're saying that The Bernank is blowing bubbles in the TUB? And thus the FED is underwater?

Tue, 02/26/2013 - 13:58 | 3278304 francis_sawyer
francis_sawyer's picture

 "When we were little, we used to have to fart in the tub when we wanted a jacuzzi"

~ Billy Ray Valentine, CAPRICORN

Tue, 02/26/2013 - 12:42 | 3278008 McMolotov
McMolotov's picture

We make money the old-fashioned way: We counterfeit it.

Tue, 02/26/2013 - 12:45 | 3278021 Id fight Gandhi
Id fight Gandhi's picture

We've never had central banks print and control so much, for so long. How can he say it will be fine?

There has been zero examples of any of this ending well anywhere in the world.

Tue, 02/26/2013 - 13:44 | 3278241 AmCockerSpaniel
AmCockerSpaniel's picture

""We've never had central banks print and control so much"" Need to read "When Money Dies" by Adam Fergusson. Oh; Sorry I forgot that few read any more.

Tue, 02/26/2013 - 13:54 | 3278290 nofluer
nofluer's picture

Reading - am through the prologue and into Chapter 1.

Tue, 02/26/2013 - 17:11 | 3279181 Bandit und Buster
Bandit und Buster's picture

"There has been zero examples of any of this ending well anywhere in the world."

But this ain't meant to end 'well', not for the 'goy'! Get it?

This is for the Zionist bankters!  They been planning this for a very long time!

Tue, 02/26/2013 - 12:38 | 3277978 Sutton
Sutton's picture

"Frothiness" to Ben applies to Gold and Silver.

Tue, 02/26/2013 - 12:43 | 3278010 max2205
max2205's picture

no, on your cappacino

Tue, 02/26/2013 - 13:23 | 3278107 Renewable Life
Renewable Life's picture

There really is no fucking end to this pricks arrogance!!!  If I have to listen to this smug bearded fuck much longer, I'm going to start drinking at 8am!!

And on another note, while I'm ranting, I'm getting tired to watching these BS MSM outlets running "stories" on how all these poor fucking .gov workers are going to be ruined by the "job cuts" coming! What the fuck do you think the rest of the County has been going thru for the last 5 years!! Where's their fucking news story?? Whats funny is, these idiots thought because they were in the gov, they were immune from reality!

Gov jobs are most bloated, inefficient, lazy, bullshit, overpaid jobs on the planet! The sooner we cut 10 million more of these bullshit jobs and open up the RFP process for private business to fill the void, the better!

Tue, 02/26/2013 - 13:39 | 3278225 BullsNBeers
BullsNBeers's picture

Yup. Nothing like paying a guy 60k to clean debris out of storm drains plus a good vacation, pension and health insurance plan.

Private sector translation of this position= Illegal imigrent making six bucks an hour.


Tue, 02/26/2013 - 12:38 | 3277980 DoChenRollingBearing
DoChenRollingBearing's picture

I have heard NOTHING that would change my opinion that our government and Fed are completely working against our economic interests.  I do not believe that either the Congress (include Obama here) or the Fed will do anything positive.

Non-believers should buy some gold.

Tue, 02/26/2013 - 12:41 | 3278002 JenkinsLane
JenkinsLane's picture

If you are not a member of the elite you are a peasant and therefore irrelevant.

Tue, 02/26/2013 - 13:12 | 3278104 eclectic syncretist
eclectic syncretist's picture

Physical gold and silver are the best put/bet against the powers that be. 

Tue, 02/26/2013 - 13:46 | 3278250 kliguy38
kliguy38's picture

Sorry Gretel but they've been dog foching you for years and listening to him shows you still believe that something he might say would be otherwise truthful or at the very least worth listening to.........

Tue, 02/26/2013 - 17:17 | 3279208 Bandit und Buster
Bandit und Buster's picture

but...but ... THEY PLANNED IT THIS WAY.  AND YOU'RE NOT supposed to say anything or YOU are anti-semitic! (never mind that 'they' are not semitic NOR Hebrews, but mongul turks)




Tue, 02/26/2013 - 12:38 | 3277982 Abraxas
Abraxas's picture

Fiscal restraint??? I'd like to see some of them stuff.

Tue, 02/26/2013 - 12:40 | 3277996 knukles
knukles's picture

0.6% fisacl drag..
Now that's from a bunchs models which consistently OVERESTIMATE economic activity.


Tue, 02/26/2013 - 12:38 | 3277983 Cognitive Dissonance
Cognitive Dissonance's picture

Buyer (of the propganda) beware.

Tue, 02/26/2013 - 12:41 | 3278000 knukles
knukles's picture

All just show supporting the Big Lie.

Tue, 02/26/2013 - 12:39 | 3277987 americanspirit
americanspirit's picture

Good Lord - I thought this article was a post-Mortem on Bernanke. What a disappointment.

Tue, 02/26/2013 - 12:48 | 3278037 McMolotov
McMolotov's picture

Cause of death: explosive verbal diarrhea.

Tue, 02/26/2013 - 12:39 | 3277989 wonderatitall
wonderatitall's picture

obama your daddy said print mudder foker or he drone you ass

Tue, 02/26/2013 - 12:42 | 3278007 sodbuster
sodbuster's picture

The best part of Obama, ran down his mama's leg.

Tue, 02/26/2013 - 12:40 | 3277991 ekm
ekm's picture

The last act of luring suckers, before the shit hits.


He is a bad actor also, Greenspan would act much better, as if he was believing what he was saying.

Tue, 02/26/2013 - 13:13 | 3278116 eclectic syncretist
eclectic syncretist's picture

He's thinking about his legacy, and how it's becoming painfully obvious that his great book that he'll write a few years from now will have to be titled something like "How I was really right all the time I was wrong".

Tue, 02/26/2013 - 12:40 | 3277993 Cursive
Cursive's picture

Ha!  BernanQE is punking all of us:  "We're turning Japanese, bitchez!"  I'll go out on a limb with a "bold" prediction:  The FRB will definitely suspend payments to the UST within the next 3 years.

Tue, 02/26/2013 - 12:45 | 3278024 LawsofPhysics
LawsofPhysics's picture

Suspension of payments or real interest rate hikes (range bound at or below 2% on the ten year now) are the death knell.  Neither will be allowed to occur publically so long as the U.S. military and the MIC retains it's current position in the world

Tick tock bitches.

Tue, 02/26/2013 - 12:41 | 3277999 World of Debt
Tue, 02/26/2013 - 12:52 | 3278050 Mi Naem
Mi Naem's picture

Man, I sure wish you would quit SPAMMING ZH with ads for that pitifully lame YouTube video you made. 

However, since you haven't got the common sense to realize that you should be ashamed of that embarrassing farce, I doubt you will stop on your own.  Perhaps a Tyler will also grow weary of you SPAMMING their boards. 

Tue, 02/26/2013 - 15:54 | 3278545 Mi Naem
Mi Naem's picture

Well how about that WoD! 

Your mommy got on the boards and up arrowed you and down arrowed me. That's nice. 


Seriously, this guy's been on ZH for a little over a week, and according to this is all he has to say:

Post date ID Author Title 02/26/2013 - 11:41 3277999 World of Debt Funny: World of 02/24/2013 - 13:09 3271803 World of Debt World of Debt: Funny 02/23/2013 - 18:04 3270441 World of Debt Funny video concerning the 02/23/2013 - 13:32 3270023 World of Debt Hilarious music video about 02/23/2013 - 13:27 3270018 World of Debt Funny music video on the 02/23/2013 - 13:26 3270013 World of Debt Funny music video about the 02/23/2013 - 13:23 3270011 World of Debt Hilarious new video/song: 02/23/2013 - 12:38 3269945 World of Debt Skip: what a twisted,
Tue, 02/26/2013 - 12:41 | 3278003 Cdad
Cdad's picture

This is the most surreal Fed hearing in my memory.  Not only are some very long postponed "concerns" being put to Mr. Bernanke, also...Mr. Bernanke's poor lying skills are well on display.  

Anticipating a close today with far, far less "hope" than is priced in at this point in the market session.  It would appear that a thought I posited sometime back is sharpening...namely that the nexus between DC and Wall Street is cracking, and that these two entities seem to be preparing to blame one another...for what is clearly coming.

Good luck out there, my brothers.  

Tue, 02/26/2013 - 12:57 | 3278059 Mrmojorisin515
Mrmojorisin515's picture


they feel the same way


Also beware because i'm the one who is going to gladly take away your money or some shit according to an old teapartier who can't grasp that the empire has to go

Tue, 02/26/2013 - 13:17 | 3278132 eclectic syncretist
eclectic syncretist's picture

The shit is flying through the air, the trajectory is perfect, the windspeed optimal, the velocity high, the fan is running full speed, and Bernanke is chained within the spray zone.  I love it.

Tue, 02/26/2013 - 12:42 | 3278006 LawsofPhysics
LawsofPhysics's picture

Would like to see just one eCONomist try and explain what the "price" of something is that is required for survival, but that is either unavailable or that I refuse to sell.  Supply lines have very real inputs that cannot be printed out of thin air.  Humanity isn't just a ponzi, it's the ponzi.

Tue, 02/26/2013 - 12:42 | 3278009 diogeneslaertius
diogeneslaertius's picture

you dont unwind a con game untill the last sucker is broke

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