The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

‘Zimbabwe’ Ben Bernanke, AC/DC Fan?

Posted on | May 10, 2012 | 4 Comments

by Smitty

Tyler Durden at Zero Hedge:

From the lows in March 2009, 1150 S&P points have been ‘created-or-saved’ thanks to central bank largesse. That is a cost of $2 million for every S&P 500 point since the Fed started to expands its balance sheet by $2.3 trillion. Money-well-spent, we are sure you’ll agree.

I love the sound of financial manipulations in the morning. It sounds like Bernanke's zipper!
I am reminded of being very young, (was I even four years old?) at the grocery store with mom. She paid for our stuff, and handed the cashier a $10 or $20, and he made change. Seeing that mom had a higher number of bills and coins than she had started with, I valiantly attempted to argue that she had made money in the transaction. Indeed, you have to view the insanity of our financial system through a four-year-old’s to see any sense to it.

Alternately, the S&P score is all just an expensive AC/DC reference:

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Comments

  • http://evilbloggerlady.blogspot.com/ EBL

    “That is a cost of $2 million for every S&P 500 point…”

    That sounds like a bargain.  Is there a decimal point off a few spaces?

  • Wombat_socho

     It’s people like you that make stockbrokers rich.

  • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

     I think she’s right, it should be “billion.”

    Of course, it isn’t correct to say all that is due to FRB weakening the dollar, but it is roughly 40% less than it was.

  • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

    What the chart actually shows is that the FRB interventions were totally unnecessary.  Look at the huge drop in 2008 – the market only needed the reassurance that things weren’t going to be allowed to melt down completely (by passing TARP – the amount and end use of the funds is certainly questionable, but the message to the markets was required, especially since the problem was entirely the creation of the US federal government in the first place).

    Those with a nodding familiarity with technical analysis will immediately notice the market was forming an almost perfect head-and-shoulders bottom, one of the most dependable signs of a coming strong upward move.  The Fed’s interventions messed up the pattern.

    IOW, if they had done nothing at all, the market would have at least recouped all the losses from late 2007 – at no cost to the government, taxpayers, Fed, or anyone else.