Bernanke admits a ‘lapse’

Interesting admission from Fed Chair Ben Bernanke:

"Federal Reserve Chairman Ben Bernanke admitted Tuesday to Congress that he made a mistake talking to a television reporter about market perception of his inflation-fighting credentials.

Bernanke appeared before the Senate Banking Committee to talk about the relatively non-controversial topic of the need for financial literacy in the American public.

While most of the questions from senators focused on that topic, Sen. Jim Bunning, R-Ky., a critic of the chairman, questioned him about his comments to a television reporter at the White House Correspondents’ Association dinner April 29.

"I warned you to be careful about what you say because people would follow what you said very closely," Bunning said. Markets fell after Bernanke’s comments were reported the following Monday.

After Bunning asked him if he learned anything from the experience, Bernanke said: "That episode was a lapse of judgment on my part." And he said future communication with the markets will be through established channels and testimony.


UPDATE: May 24, 2006 6:49am

The NYT notes Fed Chief Swears Off Improvising


Bernanke admits a ‘lapse’
Chris Isidore, senior writer, May 23, 2006: 12:49 PM EDT

Fed Chief Swears Off Improvising
NYT, May 24, 2006

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What's been said:

Discussions found on the web:
  1. David Silb commented on May 23

    I bet Maria is kicking herself for reacting so quickly and quoting the Fed Chair.

    I really think this is a non issue. The Fed will do what the Fed is gonna do until they don’t do what they’re not gonna do.

  2. Mauro commented on May 23

    Do you think this means a pause in the rise of interest rates ?

  3. singer commented on May 23

    what think you of the nasty fadage today???

    will we test the highs again if we are in fact switching over to the continuance of the 2000 and on “secular bear”???

  4. jim commented on May 23

    I had a lapse when I bought those Q’s yesterday.

  5. Uncle Jack commented on May 23

    I think this means Larry Kudlow’s “wink, wink, nudge, nudge, the Fed’s going to fight inflation because a little bird at the Fed told me” is a bunch of hooey.

  6. Brian commented on May 23

    Poor Helicopter Ben thought he had a chance with Maria. What a sucker. Maria doesn’t care if “the beard” is the head of the fed. She’s just looking for a scoop!

    I’ll let you all in on a secret. The real reason for the volatility lately is that investors are freaked out that there is a fed chief who has a couple drinks and his dick takes over for his brain. Who knows what this guy might do in exchange for a couple of prostitutes!

  7. Robert Cote commented on May 23

    The Fed chair told the truth in language people could understand. Lapse? It’s unprecedented!

  8. clunk commented on May 23

    singer- Today Bernie Schaeffer recommended a buy on IWM small cap etf with a $78.21 target. That would be a 52 week high. Of course, I think Bernie sometimes smokes his socks.

  9. ndk commented on May 23

    Cashin put it best: “global margin call”. Basically everything has risen and fallen in tandem over the last several months. Tell me, exactly when did higher oil prices become a wonderful thing for equities? Leadership, nothing but financials, metals, and ethanol?

    If liquidity is contracting here, I don’t see where the next shot of the good stuff is coming from.

  10. Dave commented on May 23

    Is this the place where you go to admit your lapse today and move on? All that financial planning writing, opportunity costing, difficulty in admitting mistakes, somehow came home to roost today in my lapse. Was this the first step?

  11. Dave commented on May 23

    What the…. I figured we’d have a sell off at the end of the day, but I didn’t think the Q’s would DIVE from 39.35ish to 38.31 (slightly afterhours).

    When does the carnage end? I mean I’m not a bull or a bear, but you have to assume that we’d atleast have some sideways movement for a few days before drifting further down.

    Hell I’m ok even if we don’t have a bounce, but when does the bloodshed end?

  12. emd commented on May 23

    WOW….. that was cool

    shorted more IWM at 72.25 only to cover WAAAAYYYYYY too early. Oh well, let’s see what tomorrow brings. this is getting fun.

    oh yeah, poor Ben was just hypnotized by her lips. i can’t blame him, but he should have known better (and so should she)

  13. Josh commented on May 23

    Sounds to me like a politically correct answer to end the questions. Bottom line is data will still determine the rate hike/pause.

    Of course the real question the data will solve will be 25 or 50 bp.

  14. trader75 commented on May 23

    “Hell I’m ok even if we don’t have a bounce, but when does the bloodshed end?”

    Anyone remember the summer of 2002? How’s 30% off in two months grab ya?

    Not predicting, just saying… we’ve been overly sensitized by the multi-year volatility lull. Things haven’t gotten anywhere near “extreme” just yet.

  15. David Silb commented on May 23

    Oh Brian!

    ha aha ha ummm………

    No we need to wonder what you would do if offered prostitutes.

    And then we wouldn’t at all care.

    Your and A*s for bringing that crap to the discussion on this blog.

  16. FY commented on May 23

    I think Ben Bernanke has shown a lot of intestinal fortitude in admitting to a lapse. His ego is probably more in check than Greenspan.

    As for the money honey, she comes across as a ruthless bitch who will do anything to further her career. I’ve never liked her. Underneath those thick lips and big eyes lies a nasty class A bitch.

  17. theman commented on May 23

    FY: Dude — wake up. This is 2006. The 50s were in the past century. What happened? Did some pony-tailed girl whip your ass in Calculus? Or perhaps your wife limits your spending on lite-beer to every other sunday.

    Ms. Money Honey is the lead anchor on the dominant financial news network in the world. Do you really think she got there by being shy and demur?

    It continues to shock me how we lionize men like Jack Welch, Bill Gates, Fred Smith, etc. — but a woman showing similar ambition and ruthlessness is immediately put down as a b****. Shall we count the number of companies that fell to Microsoft’s market power?

    Maria B. has a responsibility to report the news — and under the *EXPLICIT* policy of the press club dinner, all conversations *were on the record*. Bernanke slipped up and Maria did her job.

    After learning about your opinion of women, what exactly are your opinions of the remarkable density of Jews and Asians on Wall Street?

  18. James commented on May 23

    Ben didn’t say much of anything shocking to her – it’s just reaffirming that he isn’t an inflation dove (which he’s gone out of his way to try to address but it won’t die).

    Of course he should have addressed it in a formal communication..Ben’s probably amazed about how people hang on his every word.

    The man asking the questions isn’t just a detractor of his – he is against the Fed period. Nothing much new.

  19. whipsaw commented on May 23

    I find it interesting how much hostility there seems to be towards Bernanke. Obviously, he screwed up, but the fact that everyone hangs on his every word to begin with suggests that there is a profound disease in the markets which attacks emotional stability. The major incipient problem isn’t inflation or growth, but hysteria.

    Considering Greenspan’s track record as a mumbling dissembler, I welcomed his retirement if you can call it that. I take Bernanke’s intelligence at face value and am still willing to give him the benefit of the doubt.

    But my concern is that he may not be up to the task of dealing with a world full of weasels, whether they be in the media, in congress or the white house, or on wall street. In some respects, it’s like asking a fine military historian who has never heard a shot fired in anger to saddle up and lead the army into battle against the barbarian horde. I hope that he can pull it off, but it would not surprise me if he walks away within a year if things go like I suspect that they will.

  20. CrossProfit commented on May 24

    Never mind the technical lapses. The fundamentals are more important.

    The Fed tries to be one step ahead based on the economic data. I would give Bernanke credit that he foresaw the core inflation increase. This is the outcome of previously released economic data resulting in the last increase and Bernanke’s last comments alluring to the necessity of one more increase before pausing for evaluation. Yes, even the Fed has to pause in order to allow the markets to realign.

    As for CNBC google eyes Maria, it’s sexy and cute. I don’t think Bernanke forgot that there is a powerful brain behind those irises.

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