Big Ben and the Question of "When?"

The refreshingly clear Evan Newmark on his Wall Street Journal blog:


Mean Street: Get Ready for the Bernanke Stock Market Selloff

Are you ready for Ben Bernanke’s press conference on Wednesday?

Or put another way: are you ready for the stock market correction that everybody’s been anticipating since the start of the year?

... But here’s what you should keep in mind for tomorrow: Bernanke knows things are getting out of hand. Half of Europe is almost bankrupt but it now takes $1.46 to buy one euro. Once upon a time, it only took a buck. Gas is now at over $4 a gallon.

How can Bernanke not “get it?”

So I’m guessing he will use the press conference to put an end to the speculative “easy trades” even if this creates temporary unpleasantness in the markets.

The markets don’t expect this. The dollar is down again today. For months Bernanke has said little that could be interpreted as “hawkish.” But does he really have a choice at this point?

Can he stand by and watch gas run to $5 a gallon? Can he continue to punish America’s elderly with meager returns on bank CDs?


Read more at:
http://blogs.wsj.com/deals/2011/04/26/mean-street-get-ready-for-the-bernanke-stock-market-selloff/