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Say anything, you get a strong reaction? again, this is the concern. bernanke was always supremely confident that, you know, the fed gets into situations, it s all powerful and doing that because it can create money, after all. so therefore, it will be relatively easy for it to get out. i think what we re seeing, it s going to be something of a bumpy ride. the fed can go in and intervene in markets and create as much money as it wants, literally overnight, without much blow back. what we re seeing is here, it s not just that the fed has $3 trillion plus it has to unwind, and it s not even saying we re going to sell bonds, we re going to raise interest rates. it s saying at some point, maybe toward the end of the year, instead of buying $85 billion a month, we ll by 75 or 65. that inspired this really fevered reaction. well, dan, i came across a short and sweet letter to the editor of the new york times. the market s behavior in the wake of bernanke s news means it s overly depend ....
any need to consider applying the breaks on purchases by raising short-term rates is far in the future. chris: that doesn t sound frightening but those remarks caused a global sell off in the market fearing interest rates are rise and growth will slow. we are back with the panel. the dow dropped 560 points on wednesday and thursday after bernanke made those unintelligible remarks before the market stabilized. what does that tell you about confidence in the economy without the huge incorrection of money from the fed? that there is a large subset of investors who are in the storm now principally because they don t want to fight the fed and who believe the economy is not strong enough to stand up on its own legs and who believe we are in the storm because you ....
In the stock market because you cannot get a return on bonds because interest rates are too low. these are people probably who do not usually prefer equities and they are preferred the fed will pull the plug on the stimulus and do not want to be in the market when that happens so we get a signal from better better nazi he will raise the rates and these people bail at once. i would be surprised if it does not creep back up because, in the end, what drives the stock market is corporate profits and in the profits are strong enough to create what bernanke described, an economy at cruising speed there will be plenty of good reasons to be in the stock market. chris: behind-the-scenes, as a good reporter, does the white ....
If you take the artificialality out, where does it go? i think this should be roman numeral i for obama and congress, they ve got to do something. their role in the economy. they just punted by and large. let s pick up on that because as julie said, there s the argument in its own way that bernanke statement is good news, inflation is low, it may be tepid, but growth is continuing and it shows the economy is recovering. but worry for someone like bernanke, when interest rates are this level and this much stimulus in the economy from that, and the economy strengthens to the point we have reasonably robust growth, you re right on the danger point for outbreak of inflation. that s what a fed chief has to be concerned about. ....
Forever sent a real shock to the markets. and the question is, and this is the looming one, what s the real condition of the american economy? this is an artificial boost to it. if you take the artificialality out, where does it go? i think this should be roman numeral i for obama and congress, they ve got to do something. their role in the economy. they just punted by and large. let s pick up on that because as julie said, there s the argument in its own way that bernanke statement is good news, inflation is low, it may be tepid, but growth is continuing and it shows the economy is recovering. but worry for someone like bernanke, when interest rates are this level and this much stimulus in the economy from that, and the economy ....