Feb 24, 2009
After a horrendous downturn on the stock market last week, followed by another 250-point drop yesterday, the market is at its lowest point in 12 years. The solution? Fed Chairman Ben Bernanke is said to have calmed the markets today by telling us that the recession MIGHT be over by the end of 2009.
Do people really believe this stuff?
NEW YORK -Federal Reserve Chairman Ben Bernanke has steadied Wall Street by telling Congress the recession might end this year.In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009. But he also said "there is a reasonable prospect" the recession will end this year. He warns that a recovery will require getting credit and financial markets to operate normally.
The answer to the above question is: Many of them do believe it. Even Warren Buffet, the guru of Brokebuck Mountain, has been buying stock, thinking that we have already hit the bottom. When I heard this, I could hardly believe my ears.
For example, he recently bought into Kraft at an average of about $33/share. It is now worth $23.13/share.
He recently bought into Wells Fargo, of all things, at $31/share. It is now worth $11/share.
There is web site that publishes all of his stock holdings. Not one of them is worth more today than when he bought them.
It reminds me of the old joke about Henry Kissinger. It seems that Henry was on a plane over the ocean when the pilot told the people over the intercom: "We're running out of fuel. Grab a parachute and jump out of the plane."
The first man was a Texan. He took a parachute and jumped out screaming, "Remember the Alamo."
The second man was a Frenchman. He took a parachute and jumped out screaming, "Liberty, Equality, Fraternity." In French, of course.
Then Henry jumped, muttering, "Remember the New World Order."
The fourth man, a mountain climber, couldn't jump, because he was laughing so hard. "What's the matter with you?" the stewardess asked.
"The smartest man in the world just jumped out of a plane with my backpack."
I suspect that God is blinding the eyes of a lot of people in order to ensure that they lose a lot of money. And Mr. Bernanke is helping them do it by giving them a reason to buy high, sell low. Go Bernanke!