Les vacances de Monsieur Avataram
Sometimes a vacation at the right time can save a career. Going on holiday just before 21st of January, I narrowly escaped the unwinding of Jerome Kerviel’s $73bn position, squaring off my positions just before 2008 became even more miserable for most traders.
Of all the people who got fooled by Kerviel, the silliest seems to be Ben Bernanke, who took a rogue trader’s position unwinding to be the final reckoning, and responded with a between-FOMC-meetings 75bp cut. He tried to brazen it out with another 50bp cut the next week, but he will now go down along with Arthur Burns as one of the stupidest Fed Chairmen ever. McCain or Clinton or Obama, please transfer this man to Guantanamo and water-board him. He has even made YV Reddy look bright in comparison.
Tags: Arthur Burns, Bernanke, Jacques Tati, Jerome Kerviel, YV Reddy
February 7th, 2008 at 9:42 pm
Avataram, I searched my DVD library for Monsieur Hulot’s Holiday and they don’t seem to have it. Please help.
February 8th, 2008 at 10:24 am
For many reasons, I predict that you would be proved wrong. Not the least being your arbit assumption that Jerome Kerviel triggered the Fed rate cut. A contractionary monetary policy during a recession? I am surprised you compare him to Burns.
And YV Reddy avoided the pressure of a rate cut, despite very low CPI. May be he understands your two nation theory better than you give him credit for. May be he even knows the figure you state to be 15%.
February 8th, 2008 at 11:23 am
Ritwik, try shutting up no?
What was that Wittgenstein quote?
February 8th, 2008 at 7:09 pm
I am not the only one talking of the Bernanke put for rogue traders. To do an inter-meeting cut when stock markets are tanking is clearly responding to Kerviel, whether you believe it or not. The only man who comes out with some dignity intact is William Poole, who voted against it. A 1.25% cut on the meeting day would have sufficed, if Bernanke had waited even a day longer to know why the markets were tanking. Greenspan would have waited, unlike this prematurely ejaculating moron.
About the comparison with Burns, let us say you heard it first here. If you go through Greenspan’s book, you will find circumstances are similar. A strong treasury secretary, and a weak Fed chairman who wants to kowtow to him.
And Bernanke is an idiot. Just because Greenspan sleeps with a newsreader, he thinks he can get laid with another (Maria Bartiromo). Maybe you are one too, because you think running an easy monetary policy during a recession is all it takes to be a good Fed chairman.
Maybe I should read more Wittgenstein myself.
February 9th, 2008 at 1:29 pm
I don’t necessarily think that. But maybe I am still an idiot.