Subscribe to RSSWhat’s Bad for Bernanke Is Worse for You
Bad day for stocks, Monday. A bad day. Not a terrible day. Not a crash day. Just a bad day. The Dow fell 140 points. This was baaaad…because it shows that the stock market does not really buy Bernanke’s storyline. You’ll recall that when we left off last week, Ben Bernanke assured the world that while the recovery was not exactly what he had hoped for, he nevertheless had the situation in hand. He said he had the tools necessary to fix the problem and would do whatever was required. The initial reaction was positive. The Dow rose more than 160 points on Friday. Some analysts thought the market’s downward trend had been broken. But it needed follow-through on Monday. Instead, the market fell. The fact is, there is no recovery…and no recovery is possible…and investors are beginning to realize it. Then what is going on? A “Great Recession,” say some analysts. A “depression,” say others. There is a good article in The Financial Times that helps understand what is really going on. It’s by Ken Rogoff and Carmen Reinhart; you’ve heard of them before, dear reader. They are the ones who researched dozens of episodes of financial crisis and sovereign default throughout history. Today, they write in the FT about what happens after a financial crisis. Well, what do you think? Do you think you get a “recovery”? Do things go back to normal? Is the recession over quickly and painlessly? Not at all. Instead, there is rarely anything you would…
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What’s Bad for Bernanke Is Worse for You
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