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Bernanke Speaks
Old 02-24-2009, 03:56 PM   #1
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Bernanke Speaks

After Bernake's remarks, the market rallied. This confirms my belief we need more confidence from our leaders. I'm not suggesting false optimism, but just some hope this awful financial situation will get better. The market has been very sensitive to remarks from those in power as today displayed. The "doom and gloom" commentaries we have all been inundated with have only made matters worse. If people believe our economy will stay bad or get worse, it becomes a self fulfilling prophesy. Folks are not buying cars, homes, or investing in the market because of fear. The value of just about everything has declined as a result.

I'll admit how fearful I am. Fearful I gave up work too early, fearful our money will not sustain DH and I for the rest of our lives, fearful the whole system will come crashing down on our heads.

"The only thing we have to fear is fear itself"
FDR - March 4, 1933

Stocks jump after Bernanke says recession may end
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Old 02-24-2009, 03:58 PM   #2
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I don't want them lying overly sugar-coating the situation, but yes, even if there are struggles ahead, just the tone of less hopelessness is helpful. A significant portion of a deep recession/depression is a general feeling of hopelessness and a lack of confidence.

I hope the president is learning from this, that it's one thing to acknowledge we have some serious challenges ahead and quite another to sound apocalyptic.
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Old 02-24-2009, 04:24 PM   #3
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Like many early retirees my greatest fear was seeing another great depression shortly after I retired. It has taken me a long to admit that it is in fact possible to have a severe economic down turn in today's sophisticated global wired economy, but clearly it is.

What I truly have not groked (understood for those non sci fi fans) was how aptly named the great DEPRESSION was. The feeling of helplessness is almost as bad as watching one fortune disappear.

Our leader especially President Obama have great obligation to inject confidence into the system, which I think is even more important than capital. The man has superior oratorical skills, and he has that airline pilot-like quality of sounding calm under any circumstance. What he really needs tonight is make a water landing for the economy sound like no big deal.
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Old 02-24-2009, 04:33 PM   #4
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Remember all the happy talk we got from Bush and Paulsen last year? It seems to me we heard that there really wasn't a recession, and that the financial sector problems were "well contained". The facts overwhelmed the talk.

I don't think what "leaders" say about domestic things matters for long. Sooner or later, people figure it out for themselves. I'd prefer that they aim to be as truthful as they can, no spin on either side - kind of treat us like adults.
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Old 02-24-2009, 04:39 PM   #5
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I completely agree, but even worse than pessimism to me would be vagueness. We know the diagnosis is dire, doc--so tell us with confidence how we're going to treat it.
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Old 02-24-2009, 04:45 PM   #6
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Remember all the happy talk we got from Bush and Paulsen last year? It seems to me we heard that there really wasn't a recession, and that the financial sector problems were "well contained". The facts overwhelmed the talk.

I don't think what "leaders" say about domestic things matters for long. Sooner or later, people figure it out for themselves. I'd prefer that they aim to be as truthful as they can, no spin on either side - kind of treat us like adults.
IMO, opposite ends of the same pendulum. When Bush and Paulson talked the market tanked just as it has been whenever Obama, Geithner or (before today) Bernanke open the piehole. The market shrugged off Bush and Paulson as out of touch with reality and sold off, and they didn't like the sense of panic and oh-my-we're-doomed we were getting out of Obama when pushing for the "stimulus" or Geithner's "we have a plan and we may even tell you some of the details later" lead balloon.

There is a third way: be truthful about the situation -- don't sugarcoat it, but don't spread a feeling of hopelessness. Some of the nation's finest moments have come when people clearly saw the pain and sacrifices coming ahead, but were led by a confident leader who could remind them that while today may suck rocks, there IS hope for the future and that we will overcome this.

Sticking your head in the sand and being Pollyanna doesn't help, but neither does leading the chorus in a giant panic. Sentiment and confidence will play a bigger role in this recovery, I think, than in any of the downturns we've lived through (assuming we don't have anyone here who remembers life in the '30s). As such it may be critical to have a leader who, disagreements with politics and policy notwithstanding, can make people feel better times truly ARE coming.

FDR did that. Reagan did that. They calmed people in scary times. Can Obama? Not so far from what I saw pre-stimulus vote, but he's still learning. He clearly has the rhetorical ability and oratory to pull it off , but he should ditch the doom and panic routine. Measured and sober, yet calm and confident -- and able to make fearful people feel the same way.
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Old 02-24-2009, 04:50 PM   #7
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Can Obama? Not so far from what I saw pre-stimulus vote, but he's still learning. He clearly has the rhetorical ability and oratory to pull it off , but he should ditch the doom and panic routine. Measured and sober, yet calm and confident -- and able to make fearful people feel the same way.
Ya mean something like this?

Obama aims for sober honesty, optimism in address
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Old 02-24-2009, 05:15 PM   #8
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I've heard a consistent message from Obama: The situation is bad, it will get worse before it gets better, but it will indeed get better. I'm sure tonight will stress the third part.
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Old 02-24-2009, 05:30 PM   #9
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What he really needs tonight is make a water landing for the economy sound like no big deal.
I couldn't agree more. We need a guy like "Sully" Sullenburger these days. I love this guy.
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Old 02-24-2009, 05:33 PM   #10
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Someone ought to remind Obama that he won the election. He needs to stop campaigning and start governing. There's no need to continue to point fingers and blame others. That's why he was elected. Let him show us what he can do. He's our President, and we want him to succeed.
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Old 02-24-2009, 05:39 PM   #11
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That's it. From the article:

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Obama hoped to hit just the right note with this address: grim enough to be honest but optimistic enough to be inspiring.
That's exactly the right tack. Don't insult our intelligence by telling us things aren't that bad and don't send us into panic by sounding like it's hopeless. Be honest with us that things suck right now and will likely suck for a while longer, but leave us feeling that there is a path out of this wilderness and we're going to find it.

It could be a tightrope act, but I hope he can pull it off. Right about now anything that can inspire sorely-needed confidence would be very welcome.
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Old 02-24-2009, 05:47 PM   #12
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I could do without "grim."

You know what drives me nuts during the president's previous press conferences/speeches? How he moves his head side to side to the teleprompters, which may make the in-house audience feel he is scanning them, but to the tv cameras and us tv viewers, it comes across as he can't look us in the eye.

But surely there is no one who would be happy to see the president flop tonight.
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Old 02-24-2009, 06:01 PM   #13
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I could do without "grim."
Depends on how grim and how much it's emphasized. I think he *needs* to acknowledge how lousy people are feeling in order to connect with the audience. The task is to not overdo it and not panic. And don't dwell on the negative for too long.

There's nothing wrong with acknowledging that the patient is very, very sick -- as long as you can convey the idea that the long-term prognosis is much better.

First (calmly) acknowledge the fears, then confidently assuage them.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-24-2009, 06:03 PM   #14
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"The only thing we have to fear is fear itself"
FDR - March 4, 1933
1933? Now is that 12 or 15 years before the depression ended? Sounds like it was totally effective.

Emotions are only going to give the market a kick one way or another for two days at the most. Until you change some of the fundamental problems we're not going to be trending up.

People can't spend money they don't have. Everyone went hog wild on imaginary money which generated more imaginary money and now that people are maxed out on their credit There's nothing left after the minimum payments to actually by even the necessities. We'd be better off just devaluing all of our currency and give everyone $500,000 to pay off debt and get some pocket money. Inflation would go through thr roof but we'd befree to start a brand new debt cycle and pretend like it's not going to crash on our heads in 50 years like the last time.
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Old 02-24-2009, 06:06 PM   #15
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I wonder if the GOP will have a Spanish language speaker in addition to an English language speaker rebutting Obama's comments. The dems have had a Spanish speaker simulcast rebutting Bush in some years past after State of the Union speeches.
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Old 02-24-2009, 06:08 PM   #16
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People can't spend money they don't have.
I know plenty of people who DO have money to spend but aren't spending it because they're not confident they'll have a job in a few months.

Guilty as charged. And a lot of the people I know personally and professionally are in the same boat. I frequently hear that they're doing fine but they're not taking that vacation or making a planned purchase because they want more cash in case of job losses.

I have a list of projects we'd have done over the last year on the house if not for the perceived need to stockpile cash. That's close to $20,000 that could be "stimulating the economy" but isn't. Because I'm not confident about my continued employment situation, and especially because my paycheck is currently a single point of failure for us.

This mentality -- which I confess I to having myself -- is a significant part of the equation. Yes, many people are tapped out but it's way oversimplistic to pretend that that's the long and short of it, and I think you grossly underestimate the importance of consumer confidence.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-25-2009, 07:28 AM   #17
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1933? .

Emotions are only going to give the market a kick one way or another for two days at the most. Until you change some of the fundamental problems we're not going to be trending up.

People can't spend money they don't have. Everyone went hog wild on imaginary money which generated more imaginary money and now that people are maxed out on their credit There's nothing left after the minimum payments to actually by even the necessities.
Correct. Regardless of how one spins the present situation, which is probably still not so clear as to how bad things are, "it is what it is". There are many ways to skin this cat, from doing nothing, to throwing the kitchen sink at it.

The bottom line is we ate and drank too much and now we pay the bill. Something like a hangover, takes time, but we'll sober up. One thing I learned watching housing and stocks, "what goes up too fast, comes down much faster" Slow growth is the way to go.

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Old 02-25-2009, 07:55 AM   #18
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The bottom line is we ate and drank too much and now we pay the bill. Something like a hangover, takes time, but we'll sober up.
It's not even that. We partied all night on borrowed prosperity and it's our kids and grandkids who got the hangover.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-25-2009, 09:21 AM   #19
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I have a list of projects we'd have done over the last year on the house if not for the perceived need to stockpile cash.
I have a list of things to buy "when the market recovers."

What this says to me: Pent-up demand.
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Old 02-25-2009, 09:29 AM   #20
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What this says to me: Pent-up demand.
Yep. That's why even though my emotions may say otherwise, my logical side says the recovery will be reasonably strong - once it finally begins.
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