Senator Jim Bunning threw a strike right down the plate with his excoriation of Bernanke & Co and the Fed Tuesday. Bernanke offered no response. But Hall of Famer Bunning still knows how to pitch - that’s for sure. [Some say he isn’t right mentally but he was throwing strikes today and sounded the sanest of the bunch.]
The rest of the pols just mumbled the same garbage while a couple of spotlight seekers [you know who they are] wanted to discuss short-selling and speculation. I guess they only want to discuss the latter when things aren’t going their way.
But, Bunning has things right:
“I'm deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspan's easy money in the late 90s and then following the tech bust inflated the housing bubble and created the mess we are in today. Chairman Bernanke's easy money in the last year has undermined the dollar and sent oil to a new high every day and an almost doubling since the rate cuts started.
The Fed is asking for more power but the Fed has proven that they can not be trusted with the power they have. They get it wrong, do not use it, or stretch it farther than it was supposed to go in the first place. As I said a moment ago, their monetary policy is the leading cause of the mess we are in. As regulators, it took until yesterday to use the power we gave them in 1994 to regulate all mortgage lenders and then they stretched their authority by buying $29 billion worth of Bear Stearns assets so J.P. Morgan could buy Bear Stearns at a deep discount.
Now the Fed wants to be a systemic risk regulator, but the Fed is a systemic risk. Giving the Fed more power is like giving a neighborhood kid who broke a window playing baseball on the street a bigger bat and thinking that will fix the problem.”
The other big news yesterday was oil prices dropping nearly 5%. I think you have to expect this kind of volatility at these prices. Will consumers be encouraged by this? Hardly.
Tuesday’s volume and breadth data reflect a market favoring a few big names, while most issues are falling.
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Stocks rallied on the oil price drops but by the end of trading still couldn’t overcome other prevailing problems.
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