When One Hilsenrath Is Just Not Enough, Here's Another: "Bernanke Signals Readiness To Do More"

Tyler Durden's picture

In the immortal words of the Jackson 5: "I'll Be There" seems to be the meme du jour - which appears to us to be the same message that Bernanke (and his proxy Hilsenrath) have been on for a few years now. However, in case you hadn't had enough sycophantic central-bank-fellating 'hope', the WSJ's front-man just reiterated for one and all that Ben's our man. In our subtle opinion, it seems however that perhaps Bernanke was a little disingenuous with his talk of 'policy tool effectiveness' - as clearly his efforts have not had the desired economic effect so far (or he would not need to reiterate the ability to do more of the same).

Jon Hilsenrath, WSJ: Bernanke Signals Readiness to Do More

Federal Reserve Chairman Ben Bernanke offered a robust defense of the effectiveness of the central bank's easy-money policies in his Friday speech at the Fed conference in Jackson Hole, Wyo., and left little doubt that he is looking toward doing more to give the economy a lift at the Fed's next policy meeting in September.

On The Economy [ZH - clearly helping the "it's still dismal out there" meme - let's hope it doesn't get better anytime soon, or he will really have to show how bad we are]:

Some market participants have been wondering if a run of moderately better economic data of late has changed the Fed's thinking about the economy. Mr. Bernanke left little doubt that he is still deeply dissatisfied with the outlook, describing the economic situation as "far from satisfactory."


[It's Cyclical Stupid]
Importantly, the Fed chairman also says that the job market's weakness, to date at least, is the result of cyclical problems in the economy (that is, a lack of demand) and not structural problems (such as a mismatch between the skills people have and the skills employers are looking for.)


[which means we are justified in our 'extreme' actions]
The Fed feels it can help address cyclical problems, but not structural problems. In other words, this is a problem where the Fed feels it can help. Of course, he also includes his "no panacea" caveat; Mr. Bernanke would love fiscal policy makers to take actions to support the economy and address long-run deficits. But he doesn't seem to see that as justification for inaction on his front.

[and the disingenuous comments begin... jobs, here's your jobs - what are you all complaining about?]
COSTS AND BENEFITS: Mr. Bernanke has said repeatedly that the Fed's decisions about how to use monetary policy depends on an analysis of the costs and benefits of different actions. His analysis, particularly of the Fed's controversial bond-buying programs, heavily emphasizes the benefits and plays down the costs. Two rounds of bond buying have raised overall economic output by 3%, he said, and increased payroll employment by 2 million jobs, he said his staff has estimated.

"A balanced reading of the evidence supports the conclusion that central bank securities purchases have provided meaningful support to the economic recovery while mitigating deflationary risks,"


[and finally - they have it all under control, so don't worry]

"The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out further use of such policies if economic conditions warrant,"

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Xibalba's picture

Like an old man who can't get it up..."I promise I'll be ready next time"

Brazillionaire's picture

Old men don't need Viagra because they can't get it up. They need Viagra because old women are ugly.

MillionDollarBonus_'s picture

The 10 year yield is down on the day at 1.59%. The treasury market is showing incredible resilience. My year-end target for the 10 year is 1.00%. Bernanke doesn't need to introduce more Quantitative Easing with such a robust treasury market. I would howeversuggest monetization of other assets such as mortgage backed securities or equities. 

NotApplicable's picture

Sure the problem is cyclical, in a kind of Fourth Turning or Kondratieff Wave sort of way.

Manthong's picture

Good for cyclical, not structural problems?

Well Ben, maybe freshened blood works for the first half dozen races, but folks are likely to catch on eventually. 

Xibalba's picture

Why not just let the market work?  Is that a revolutionary idea or something?  

john39's picture

that would expose the prasites...  verboten.

BeetleBailey's picture

Gee...what's your year end target on FuckBukakke....and don't go dumb and ask "what is that?"...you know what it is putz...

"Robust" treasury market......man you are a hoot...

earnyermoney's picture

I'll bet you're hoping they monetize your Facebook shares. LOL

vast-dom's picture


trebuchet's picture

you can say what you like. 


" it is important to achieve further progress, particularly in the labor market. Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."

In Bens words, which bit of this says "we are done?" This says to me " we waited for recovery to pick up and now its time to act". 


I said it here in previous threads last week this speech will be about the unemployment rate, the need to reduce it  and positioned accordingly.

The speech, outlining effectiveness of unconventional monetary tools was saying "it works" so we have to power to do more, dont doubt us


This is a "dont short  the euro" speech.... 


Time for ZH to bring out the comparison of the Euroland/US CB balance sheet growth charts to see where we could be going...



LawsofPhysics's picture

That and total debt outstanding for the EZ.

vast-dom's picture

the fed has 6% target unemployment that they could theoretically influence -- we are realistically at over 15% and officially at over 8%. more importantly, QE can't won't and could never improve unemployment just like ZIRP can't do more than punish savers, old people etc. most importantly, a free market can't return to cyclical normalcy with this illegal anti-market QE/NIRP bullshit. Let's have a crash precisely because of QE.

trebuchet's picture

with five years work , the ben and fomc are not goign to let the juggernaut slip over the cliff without a fight. 

I wouldn't hold my breath waiting. 

in their opinion they added 2 m jobs. scale up to work out how much action it will take to get from 8% to 6%. They won't go all the way, they intend to go some of the way


im still trying to work out what lever the want to pull to do that... as they said they do the Cost benefit thing... 


work that one out and you front run the fed ahead of the pack ... until goldman/thebots jumps in and front runs the front runners.. weekend homework



vast-dom's picture

your homework will be no more scientific than taking a coin and flipping it over and over until you get tired enough to delude yourself into thinking you can second guess which fucked up innefectual tool will be paraded around for the bankers to extract more free money and the indexes to bloat up on nothing.

Freddie's picture

Jackson 5 - because if Obama had a son - he probably would like like Tito, Jermaine (with more Jeri-Curl), honor student Trayvon and pretty much any muslim dude.


Shocker, more than one A-hole in J-Hole.

kito's picture

the stupidity of the professional investing community never ceases to amaze me............

NotApplicable's picture

Which bot are you referring to?

trebuchet's picture

Low vols of last few weeks??


The Knight bot makers recalled their other models for maintenance :))

john_connor's picture

inflation expectations are becoming unanchored as we speak

LawsofPhysics's picture

Indeed, inflation is very much in the house.  Very easy to get in things one needs, even without "velocity", especially when commoditiy providers decide not to sell, or not to accept your particular flavor of fiat.  The Fed knows this.  The Fed will defend the dollar at some level, looks like the political puppets are being sent a strong message to put their house in order least the treasuries go bidless.  When you are buying 70% of the auctions, you can say "who runs bartertown".

Paging the bond vigilantes, clean up on aisle one...

Liquid Courage's picture

or ... to revive and redefine an obsolete word that obviously no-one needed anymore ... The Dealth Effect.


Dealth is illusory "Wealth" based on debt. Works for me.

trebuchet's picture

+5 for the "Dealth" word....

fonzannoon's picture

Ben wants to rumor crude up to $125 before he pulls the trigger....makes a lot of sense...

Dr. Engali's picture

So now we get another month of fed speak and Hilsenbarf puke. It's getting a bit exhausting.

kito's picture

no fonz....rumors have limited effect, perhaps oil to 100 or so.....certainly if he actually pulled the trigger now...which he wont....you would see oil to 125 and gold to 2000....but ben doesnt want either of those numbers to materialize....

fonzannoon's picture

Kito if rumors had limited effect we would be 200pts lower on the S&P.

trebuchet's picture

@kito, his speech surprisingly emphasized "wealth effect" = confidence.....  seems like he DOES want those numbers

mrktwtch2's picture

fat pig michael moore says romney will win..

surf0766's picture

Who care what the communist sympathizer says

Spastica Rex's picture

"Communist" that's so 1989.

ArrestBobRubin's picture

The updated term is Obammunist

walküre's picture

In reality they're all just beneficiaries of the Almighty Fed.

That makes them all FEDOMMUNISTS

i-dog's picture

Wavering Obomberbots?

surf0766's picture

He and the rest of the communist sympathizers can move to cuba. They seem to want their healthcare so bad. Why wait until it is implemented here.

viahj's picture

no ben & jerry's in Cuba?

surf0766's picture

They can move with him too. 

LouisDega's picture

Roger and me peak Bitchezzzz

Dr. Engali's picture

I really wish you wouldn't put down fat pigs in that way. Fat pigs are important..they provide things like ham, sausage , and bacon. Michael Moore on the other hand.....

earnyermoney's picture

I think MM has the itch to make some new films. Must of exhausted his stash after 4 years of Barry.

Snakeeyes's picture

It won't do any good. Only pump up the stock market. If he does it and Romney wins, kiss Bernanke goodbye.


IndicaTive's picture

"OK fine go ahead, but just the tip...for now anyway."

Hondo's picture

I can't believe how bad this propaganda is.....it is irrational, and desparate in nature.  It assumes the majority of people are morons.