Aug 12, 2009
Keep Bernanke – end the recession
Economists are nearly unanimous that Ben Bernanke should be reappointed to another term as Federal Reserve chairman… He deserves a lot of credit for stabilizing the financial markets… Meanwhile, the majority of the economists The Wall Street Journal surveyed during the past few days said the recession that began in December 2007 is now over.
Huh? Recession is over means companies start earning money, apart from other things. It doesn’t mean expectations about future earnings emerge. But in reality we see the opposite:
1972:
1973: Oil crisis
1987:
1987: Black Monday
2001:
2001: Dot Com bubble
2007-current:
2007-2009: World financial crisis
If we presume as a benchmark a period starting a year before market high and subsequent collapse and 4 years after the high, we can find a certain pattern there. Only in the latest case we can observe how P/E rockets in 6 months since the bottom and tops during the period. Never in the history of S&P index market expectations regarding the end of recession were so high. Note, only in the current period there is a sequence of 6 straight months of rising hopes. It means every month after November’s low investors expect more and more of real income.
But they get forth consecutive quarter of earnings decline:
Four consecutive quarters of S&P earnings decline
Rate opinion
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Bernanke was the only cause, I proved, of the Great Recession and probably acted on purpose. He had the knowledge (Bernanke is a renown specialist of The Great Depression he even wrote a book on the subject: Essays on the Great Depression.), the means, motive (The gigantic power he has received thanks to The Great Recession.), and opportunity.
Worse, in light of the exercise of the central bank extraordinary power by Bernanke, I argue that he poses a real immediate threat to democracy, peace, privacy and individual freedom.
Given the immediate dangers that are evoked in these lines I strongly suggest that you revoke Bernanke.
“I will argue here that, to the contrary, there is much that the Bank of Japan, in cooperation with other government agencies, could do to help promote economic recovery in Japan.
Most of my arguments will not be new to the policy board and staff of the BOJ, which of course has discussed these questions extensively.
However, their responses, when not confused or inconsistent, have generally relied on various technical or legal objections—- objections which, I will argue, could be overcome if the will to do so existed.“
Prof. Ben Shalom Bernanke
Japanese Monetary Policy: A Case of Self-Induced Paralysis?
For Presentation at the ASSA Meetings,
Boston MA,January 9th, 2000.
“The slowdown in economic activity, together with high interest rates, was in all likelihood the most important source of the stock market crash that followed in October.
In other words, the market crash, rather than being the cause of the Depression, as popular legend has it, was in fact largely the result of an economic slowdown and the inappropriate monetary policies that preceded it.
Of course, the stock market crash only worsened the economic situation, hurting consumer and business confidence and contributing to a still deeper downturn in 1930.”
Governor Ben S. Bernanke
Money, Gold, and the Great Depression.
At the H. Parker Willis Lecture in Economic Policy, Washington and Lee University,
Lexington, Virginia.
March 2nd, 2004
Revoke Bernanke: Sign the Petition to Request from President Barack Obama That Ben ‘Systemic Risk’ Bernanke be Removed From Office.
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