When Bernanke Speaks, People Listen

So, one of my coworkers is a heavy investor. Actually, I am sure several of them are, but this is the guy I know. We'll call him K. K hates Ben Bernanke with a passion. Once at a party, he burst out with the following quote: "If I am down to my last bullet, and I have Osama Bin Laden to my left, and Ben Bernanke to my right, I am going to shoot Bernanke!". K is now famous around the office for this saying.

K spelled out his reasons for this choice in detail: "The damage Bin Laden has been done can be measured around few hundred billion. The bamage Bernanke has done is in the Trillions." Of course, he omits the carnage aspect of this comparison, but this was intended to be a funny saying in the first place.

According to agent K, every time Bernanke speaks, the market takes a nose dive. Well, today is Dec 1, 2008. Bernanke spoke. The market just took a 420 point shit. Wow... This isn't the first time I have observed this phenominon in action either.

What did Bernanke say? He said the economy is likely to remain weak for some time. The S&P 500 heat map turned red as Hell itself. Just check out FinViz.com. You will see the S&P 500 heatmap.

Granted Bernanke has had a rough ride. The economy has been getting worse and worse over his 2 years. It looks like Greenspan bailed out at the right moment. That probably wasn't a co-inky-dink. Bernanke has had a lot of bad news to give us. Shooting him is like shooting the messanger.

Still, K says Bernanke is a son of bitch. If anybody aught to be cautious about what he says, and discrete with bad news, it aught to be Bernanke. Nobody in such a post should be so forthright, says K. "Thou shalt not speak" should be his commandment. He remains bitterly disapointed that Obama has done nothing to terminate Bernanke's post.

So how does a Fed Chair share bad news? How did Greenspan negotiate this problem? There were moments of bad news during his time. The economy tanked in 1991. He was ostensibly a good Fed Chair. What would Greenspan do?

Greenspan was notoriously incoherant and incomprehensible. His speech was like the writings GWF Hegel. He issued a lot 180-200 word sentences which added up to confusion. The Motley Fools used to have a segment called "Dude, what the hell did he just say?" which attempted to decode Greenspan's impenetrable speech patterns.

So I guess the moral of the story is clear: If you have bad news to give, write some anti-gramatical 180 word sentences and deliver them slowly. Bernanke's problem is that he is prettly clear that there is a problem.

[Editor's footnote]
The Market closed down 680 points. That is the fourth largest decline in history. It was a big one.