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Take a look at what “flamboyant” Cramer is now saying as per Moneynews.com: Jim Cramer says history will recognize Fed Chairman Ben Bernanke as the primary reason America avoided a much more serious meltdown as the housing market and rotten banking investments forced the economy to halt last year. “I’ll just come right out and say it: Ben Bernanke will go down as the greatest Federal Reserve chairman in history,” Cramer wrote in New York magazine. Bernanke, Cramer wrote, “will be known as the man who averted the Great Depression Two, a sequel that could have eliminated the United States as a world financial superpower and reduced us to this century’s Britain.” Cramer credited Bernanke for pushing Obama to enact the stimulus plan to support the economy through the downturn, and for giving Treasury the strategy of letting the banks raise money privately via the TARP plan, rather than simply bailing them out directly with taxpayer money. Bernanke has his faults. In the beginning, he seemed too content to talk rather than act, Cramer writes. “He was slow to cut interest rates, his primary tool to stave off recession, and he handled the Fed as if it were a Princeton debating society, polling the members endlessly and deferring to the inflation hawks,” Cramer says. Yet by digging in his heels on lowering rates, Bernanke has likely stopped a deflationary spiral, one that would have consumed the economy, Cramer argues. He also took the wind out of the sails of what could have been a disastrous move toward populism against the banks by candidate and later President Obama. By speaking straight, unlike his predecessor Alan Greenspan, Bernanke “made it clear to Obama that the new president was using the wrong road map when castigating Wall Street, because Wall Street leads directly to Main Street.” As of late, Cramer notes, that banks have been able to raise $74 billion in capital, and big institutions like Citigroup, Wells Fargo and Bank of America are not going to fail, and mortgage rates are starting to come down for consumers. |
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Well perhaps Bernanke will become famous for saving the US Economy………..but we will only know this over the coming quarters/years. We do admire Cramer for making calls rather than merely sounding intelligent and sitting on the fence. However, we are amazed at how short Cramer’s time frame is. There is a cost to all of what Bernanke has done over the 12 months (in essence making money out of thin air – aka printing) and Cramer “conveniently” overlooks this. The issue is that this “cost” will only show up later……….In the same fashion what Cramer has said is akin to him saying in 2006 that “Greenspan was the greatest Federal Reserve Chairman to have existed” or “never before has a Federal Reserve Chairman resided over such prosperity than has Greenspan”. We are now dealing with the fallout of Greenspan’s actions now…..and perhaps will continue to deal with the fall out for a good few more years. We will only know how good Bernanke was (or wasn’t) 5-10 years from now when the consequences of his actions are revealed. Although the bond market is currently making it perfectly clear of the consequences of his actions. Crashing US long bonds and racing commodities suggest it is already happening!
As a contrarian I get worried when I read news articles like this………!
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