Bernanke: You’ll Get No Surprise From Janet Yellen

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Dec. 18 (Bloomberg) – Veracruz TJM Founder Steve Cortes and Bloomberg’s Peter Cook and Barry Ritholtz discuss the outcome of the Fed meeting and the reasons for the surge in the markets with Trish Regan and Adam Johnson on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

We just heard from federal deserve chairman ben bernanke -- reserve chairman ben bernanke.

Peter cook was inside of the room at his last press conference.

We are talking about what a monumental day this is in some ways because this is the legacy ben bernanke is leaving behind.

He has begun this taper program, the unwinding of the balance sheet, something janet yellen will face, and it will be a real test for her moving forward.


The chairman, we know the decisions he made during the financial crisis, being credited with keeping the economy from falling into the a bass, but he will be judged on how this wind down takes place, as we'll janet yellen.

They will be tied together because of this turnover.

It was striking when he was asked about whether janet yellen agreed with everything, and whether there might be any surprise in the future, that there was no separation.

He wanted to make it clear there was no daylight with regards to these decisions.

He consulted with her before she was nominated, then again, and she is totally on board, an important message to the markets -- you will not get a surprise from janet yellen.

The taper may begin in earnest, at a measured pace, he might have to be turned on and off, but janet yellen and i are in -- are on the same page.

You almost wondered if she would walk in and that did not happen.

Interesting point.

The markets are at an all-time high.

What do you think investors are reacting to, steve cortes, the news that interest rates are going to stay low for the foreseeable future, or are they happy about a taper?

I think it is the interest rate scenario.

For today, the bond market yawned at this.

Rates did not move.

No consequential move.

Combined with the promise that we are going to stay low for very long -- does it not sometimes have a reverse economy consequence?

I know that was almost reverential in his treatment of bernanke, ready to put a halo on him and canonize him.

I am much more critical of ben bernanke.

Did he deal well with the crisis?

A crisis he created?

The stock market is soaring, but main street is not seen the growth wall street is because we do not see capital expenditures because of qe.

That is difficult to connect those dots.

I can understand companies not investing because congress has not given them clarity, but what is the connection between qe, a flood of money and not investing in your company's? if there is not the hint that interest rates will rise, companies are not encouraged to invest.

What is the incentive?

They want to sit on massive cash positions to get zero returns.

When the demand is there, when customers say we want these services, they do capital spending.

When the demand is not there, they do not.

That is why the automakers are doing really well as low rates have driven have -- huge auto sales and the same thing with homebuilders.

The reason there is not enough demand is because the government has far too much control over the economy, the fiscal side and the monetary side.

We are sadly following the blueprint of japan, which does not work, high taxes, high regulation, and planning my monetary policy.

Animal spirits will be unleashed if capitalism rise again.

I have to throw aside the animal spirits argument heard you want to improve confidence, improve the underlying fundamentals.

That said, where we agree is that ben bernanke did what he had to do -- not my first choice during the crisis, i would've personally put the financial entities into a repackaged bankruptcy like gm and chrysler -- the question is did he do it for too long?

What is going on currently is you have a massive shortfall on the fiscal side.

This is the first quarter were

This text has been automatically generated. It may not be 100% accurate.


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