August 13, 2007
Bernanke to the Rescue. Not.
Ben Bernanke is the
new chairman of the Federal Reserve Board. The proper way to address him
is Chairmangreenspan Bernanke.
Bernanke is now being asked to save Wall Street from itself, which is
funny because Wall Street A) doesn’t deserve to be saved; and B) doesn’t
need to be saved, because nothing is going to happen to it. Which is why
Chairmangreenspan Bernanke probably won’t do anything to save it.
The problem on Wall
Street is the usual “jitters.” This is the all-purpose term to describe
anything that happens on Wall Street, or even things that have nothing
to do with Wall Street, but will nonetheless be identified as the reason
for what happens on Wall Street.
Reporters who cover
the stock market have no idea how it works or why. Neither do most of
the people who buy, sell and trade. So why did the market do this or
Uh, must be . . .
“jitters.” Sounds as good as anything.
Anyway, the U.S.
economy is growing like crazy, unemployment is at a 20-year low and
corporate profits are breaking records – all of which has the stock
market soaring. In July, for the first time, it topped 14,000. (Don’t
ask me “14,000 what?” No one knows. But trust me, that’s a lot of
whatever it is.)
When August arrived,
the market “corrected” a bit – closing last week at 13,239
whatever-they-ares, which is less than 14,000, but still higher than any
other level in stock market history prior to three months ago. So, still
pretty darn high, right?
Let’s check the
CRASHES! IT’S 1929 ALL OVER AGAIN! NEST EGGS SMASHED!
It’s a bit like
Magglio Ordonez, who plays right field for the Detroit Tigers and not
long ago was hitting a stratospheric .380. He’s now hitting a
still-league-leading .357. If the people who cover Wall Street ran the
Tigers, Ordonez would be headed for the minor leagues.
corrections do have specific reasons, and this particular market
correction has a lot to do with too-easy-credit, especially for home
mortgages. You know those people who will give you a mortgage even if
you can put nothing down and you have no credit history? They’re not
really helping you if you’re going to end up in default, and they’re not
really doing the market any favors when they create lots of defaults –
and capital available for lending becomes scarce.
solution is for Chairmangreenspan Bernanke to prime the pumps and put
more bills into the money supply. That will ease lending pressures, they
say, and supposedly make the Wall Street crowd less “jittery.”
The D.F. Krause
solution is for Chairmangreenspan Bernanke to do nothing. Let the
jitterers jitter. 13,239 is a lot of, you know, those things. If people
lent money they shouldn’t have lent, and now they’re going to lose their
shirts, I don’t really see how that’s a problem in need of a solution.
That’s what’s supposed to happen when people make dumb decisions. If
people invested in those lenders and now they’re going to lose their
shirts as well – too bad, so sad. Make better choices next time.
The value of the
U.S. dollar is so low, it’s almost even with the Canadian dollar!
I’m going to spend a weekend in Toronto in a few weeks and now I’m not
going to be able to get cheap food. The last thing I need is
Chairmangreenspan Bernanke cranking up the printing presses and further
devaluing the dollar, all because the stock market is at “only” 13,239
and a few idiots who did stupid things are going to have to pay for it.
Wall Street is a
silly place where everything is magnified, over-reacted to and
over-analyzed. Whatever happens there today will be “corrected”
tomorrow, but the general direction of the market’s value is always up.
So how do you “solve
its problems”? It has no problems. Just smart people who get rewarded
and dumb people who get ruined – all of which is exactly as it should
I hope, and think,
Chairmangreenspan Bernanke just might understand this.
© 2007 North Star
Writers Group. May not be republished without permission.
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