In a note to clients this morning David Rosenberg at Gluskin Sheff asks if we need even more to worry about? It’s becoming a legitimate concern. The worries are mounting:
Greece. Portugal. Ireland. China tightening. Bank bashing. Foreclosures. The housing and mortgage market. Jobs. The Fed’s exit strategy (if it happens).
Rosenberg goes on to note the potential hurdle Bernanke now faces in the Senate. Could the “man of the year” get voted out? His reconfirmation is not looking like a guarantee, but quite honestly, I find it hard to believe that they won’t muster the votes. With all the uncertainty in the economy the Congress is unlikely to pile on with more uncertainty and a new head at the Fed. Of course, this is more unfortunate politics in my opinion.
As I have mentioned previously, I think Bernanke is a disastrous central banker and I firmly believe he compounded our problems with what many call “extraordinary measures” last Fall. Yes, it’s great that the equity markets have rebounded, but as we’re now realizing, the equity market is not the real economy. We are now beginning to realize that these extraordinary measures simply increased the “too big to fail” problem and added to our government’s fiscal problems. In other words, he helped bailout the people who should have failed. Everyone is angry at President Obama for looking anti-business in the last few weeks (though I have to say his bank tax plan is downright wrong), but perhaps the blame lies elsewhere? Greenspan helped get us into this mess, but Bernanke made it worse last Fall. He truly is the arsonist who put out his own fire. If Obama wanted to send a real message to Wall Street (and ignore the market’s reaction for once – OUR ECONOMY IS NOT OUR STOCK MARKET) he would wipe the slate clean by removing Geithner and Bernanke immediately.
As for the other worries above. Well, we just have to realize that deleveraging cycles are long and painful. There is no quick fix. In other words, get used to it until our leaders find some resolve and actually begin dealing with the structural problems that got us here in the first place. Removing those who helped cause the problems is a good start.