Federal Reserve Chairman Ben Bernanke today called on Congress and the President to take the lead in boosting the economy.
The chairman’s much anticipated message to Washington was clear: set aside short-term political interests and do something helpful for a change.
In a fit of optimisim, investors responded favorably. The Dow, Nasdaq and S&P 500 were all up in afternoon trading.
The $4 trillion question is whether the pols will take Ben’s message to heart. Given the current tone of the presidential primary campaign, that seems unlikely. I hope I’m wrong and the pols can agree on a plan to light a fire under the economy.
Photo: Federal Reserve chairman Paul Bernanke, right, and Jean-Claude Trichet, of France, president of the European Central Bank, take a morning stroll on the veranda of the Jackson Lake Lodge, before the morning session of the Economic Policy Symposium at Jackson Hole in Moran, Wyo., Friday, Aug. 26, 2011. (AP Photo/Reed Saxon)
Finding a reasonable, spin-free explanation of what the debt-ceiling debate and credit downgrade really mean is next to impossible.
But the Milken Institute has given it a try. The nonpartisan, independent think tank has published a thoughtful commentary from a panel economic experts from the left, right and center.
Here are a couple of comments about S&P’s downgrade of the US credit rating that I found particularly interesting (Phillip Swagel worked in the Treasury Department during the G.W. Bush adminstration. Jared Bernstein was chief economist and economic adviser to Vice President Joe Biden from 2009 to 2011.)
How long will the rally last and how high will the Dow go? Those are questions every investor is trying to figure out.
Financial entrepreneur, blogger, writer and general contrarian James Altucher predicts the Dow will hit 20,000 and S&P will top 2,000 before the stock market turns bearish.
But as he usually does, Altucher’s advice takes a strange turn.