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Reply #27: Finding Self in Hole - Bernanke digs Deeper [View All]

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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-18-08 06:56 AM
Response to Reply #8
27. Finding Self in Hole - Bernanke digs Deeper
Charting a course out of credit crisis

http://www.reuters.com/article/ousiv/idUSN1445517420080817?sp=true

WASHINGTON (Reuters) - When U.S. Federal Reserve officials gathered for their annual Jackson Hole conference last August, Bear Stearns shares were trading at well over $100 apiece. The benchmark federal funds rate was 5.25 percent, more than double where it stands now, and oil cost about $70 a barrel.

Twelve months later, Bear Stearns is gone, as is about $400 billion from banks' balance sheets. Legendary oilman T. Boone Pickens thinks the days of oil under $100 a barrel may be gone, too.

Looking back at the 2007 conference provides some cringe-inducing moments.

In his speech at the Wyoming mountain resort, Fed Chairman Ben Bernanke declared that the central bank was ready to act to shield the economy from the credit crisis but would not save investors who made bad choices.

"It is not the responsibility of the Federal Reserve -- nor would it be appropriate -- to protect lenders and investors from the consequences of their financial decisions," he said at the time, words that now sound ironic in light of the Fed's role in rescuing Bear Stearns from bankruptcy in March.

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