Poor Fed chairman Ben Bernanke has been showing some wear and tear as he copes with the aftershocks of a nigh-unprecedented financial crisis and a stubbornly stagnant economic recovery. His most recent response, a $600 billion salvo of monetary stimulus, has engendered something far short of unanimous praise from the financial commentariat.
Two days after Bernanke announced that it would purchase additional long-dated Treasuries in an effort to lower interest rates, the squawking heads have run the gamut on the central banker’s performance. Witness:
Former hedge fund manager Michael Burry, who made some accurate predictions about the decline of the housing market, said quantitative easing is tantamount to using “poison as the cure” for our current economic distress. Investor Jim Rogers said Bernanke “does not understand economics” and that he’s debasing our currency in hopes of wriggling out of an economic pickle.
Meanwhile former Morgan Stanley bigwig Barton Biggs says Bernanke was “absolutely right,” because the risk of a double dip recession continues to loom, and bolstering stock market prices, Bernanke’s intent, sends a signal of economic confidence.
Asset bubble-conscious hedge fund manager Bill Fleckenstein, meanwhile, takes the precise opposite view on Bloomberg TV:
It’s not the first time Bernanke has been under fire, and it’s unlikely to be his last. But one thing’s for sure. Quantitative easing was not a path to immediate short-term acclaim.
mtaylor [at] observer.com | @mbrookstaylor