Good evening to you all. If you have not heard, Bear Stearns has officially gone under. Technically, they were acquired for $2/share (NOT-A-TYPO), so they didn’t actually announce a bankruptcy….unless you consider the fact that it was trading at $70 on Monday!
What does Ben Bernanke have to say? I’ve got one quote from him back on May 17, 2007 and another one tonight…Ok I actually made up the one from tonight but it is a pretty educated guess into how he is going to respond to this.
May 17, 2007 (from Forbes.com article)
The subprime mess is grave but largely contained, said Federal Reserve Chairman Ben Bernanke Thursday, in a speech before the Federal Reserve Bank of Chicago. While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S. economy, he said. The speech was the Chairman’s most comprehensive on the subprime mortgage issue to date.
“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited,†Bernanke said.
March 16, 2008
“I continue to believe the troubles in the subprime sector on the broader housing market will likely be limited to every bank and neighborhood in the country. So, unless you have a savings account or you own a home, you should be just fine.”
We can’t confirm he’s actually made this official statement but if I know the “don’t worry, be happy” Fed Chairman, this will be pretty close
Regards,
George