Bernanke Plays `Whac-A-Mole' With Turmoil in Markets

[Lone_Star_Dem]

Source: Bloomberg

March 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may be facing something worse than a loss of personal credibility on Wall Street and in Washington: waning faith in the ability of the institution he leads to turn around the economy and the financial markets anytime soon.

Bernanke has reached deep into the Fed's toolkit to come up with innovative ways to head off a recession and restore some calm in credit markets. While many have initially been greeted with rallies in stocks, cumulatively they haven't yet had lasting impact on bringing down credit costs and setting the stage for economic recovery.

``The Fed has been playing the equivalent of Whac-A-Mole as financial turmoil keeps cropping up in new and unexpected places,'' says former Fed Vice Chairman Alan Blinder, referring to the arcade game where players try to hammer down plastic critters that randomly pop out of holes. ``Yet many of the problems facing us are beyond its reach.''

Home buyers are unlikely to put down offers on houses that they think will lose value -- no matter how much the Fed does to lower mortgage costs. Banks with mounting loan losses will shy away from lending to borrowers they think might go bust -- no matter how much money the Fed pumps into the financial system. And investors will remain jittery -- even after the Fed throws a lifeline to struggling financial institutions, as it did last week with Bear Stearns Cos.

Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=aLKjRvxDFICQ&refer=home

---

Whac-A-Mole is an excellent analogy for what's taking place right now.

[enid602]

1. Lucy

More like Lucille Ball on the production line at the chocolate factory when they turned up the speed on the conveyor belt.

[aquart]

2. "Unexpected"? Are they serious?

[redqueen]

3. They know only a tiny fraction of the electorate pays any attention...

yeah, we've watched this storm forming for years, but they know most were ignoring it. Like most marks - they thought they were doing well and everything was business as usual.

[Lone_Star_Dem]

5. They are seriously lying

What do you expect them to say though? We saw this coming and sat on our hands hoping it wouldn't hit until we were no longer the ones at the helm?

They're in such a frenzied sea of damage control right now and the denial is one of the few lifesavers they can still cling to.

[Doctor_J]

4. Exactly what you would do if your job was to save the Resident instead of the country

Personal credibility means nothing to the BFEE - their only concerns are earning for the family and not getting anthrax in the mail.

[flashl]

6. I like that image ... `Whac-A-Mole' nt

[Rex]

7. I guess they thought, 'what the hell, the dollar can't become worthless.' Series.

Boy, were they wrong! Stupid government entities - hire someone who won't let this economy go bust! Oh, sorry, forgot you can't do that and keep a job under Lord Pissypants. Not in a recession or depression, doncha know. Series.

[4dsc]

8. This all could have been avoided

according to a couple of talking head on CNBC that claimed the Fed action to allow investment bank access to the FED window to borrow should have been done last week and Bear Stearns would not be sold off today..

[TreasonousBastard]

9. Easy to snipe, but does anyone have a better idea what to do?