Apparently, Ben Bernanke Wasn’t Very Convincing

He went to Capitol Hill today and talked about the need for an economic stimulus package, and the stock market fell 300 points anyway:

Federal Reserve chief Ben S. Bernanke told lawmakers today it is “critically important” that any economic stimulus package take effect quickly if it is to help ward off recession, and the White House announced that President Bush would make a speech Friday laying out his criteria for such a program.

Despite Bernanke’s comments, the flow of disappointing economic news today sent Wall Street lower. The Dow Jones industrial average dropped 307, or about 2.5 percent, to close at 12,159. The Nasdaq composite index was down about 48 points at 2,347, a loss of 2 percent, and the Standard & Poor’s 500 index fell 40 points to 1,333, 2.9 percent.

I guess Ben doesn’t really have a golden tongue does he ?

  • UCrawford

    That would be a silver tongue, Doug, if you’re referring to one imparted with the gift of gab. A golden tongue would, I suspect, be considered more King Midas-like.

    Come to think of it Bernanke might just have a golden tongue :)

  • Kevin

    Apparently Bernanke will just do what he does best, hit the printing presses at maximum capacity.

  • Adam Selene

    I think that what “the street” is really looking for is Bush, Paulson and Bernanke to say that a strong dollar is a government policy. Until they do, the market and dollar will keep going the direction they are.

  • David Wilson

    It’s especially troublesome considering the amount we import versus export. Low currency is good for exports, but will only hinder the fact that we import largely from china. Secondly, it looks like the government is so eager to jump on the economy with further central planning and nanny state handouts that we might be in this for a while. No doubt any act of congress will exacerbate this poor economic situation, particularly when the government props up the banks who made the mistakes in the first place!

  • Kay

    What is interesting to me is that economic indicators are really positive – More than 8.3 million jobs have been created since August 2003 in the longest continuous run of job growth on record and the Federal deficit declined by $250 billion in the last three years. In FY07, tax revenues grew by $161 billion to reach $2.568 trillion, the highest level of Federal revenues ever recorded.

    Most of the economic problems are really self-created and media exploited. The housing market sold to some people who never should have received home loans, and our media driven culture causes the negatives to receive much more attention than the positives – driving stock prices. Interestingly enough, we’ve also had record highs in the stock market in the past year – so what else is new? Stocks go up, and they go down. Doesn’t automatically mean a recession is happening tomorrow.

  • Adam Selene

    Kay, I would be willing to say that we have probably entered the first quarter of a recession already. We won’t know that for at least a year, but it seems likely that the economy is no longer growing. Certainly the unemployment numbers are indicative. That said, it will probably be a very shallow recession, similar to 2001-2002.