QE2 Saved the Major Banks, Again

By John M. Mason: Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System in a speech given at Jackson Hole, Wyoming on Friday defended the record of his tenure in the position he now holds, indicated his belief that the economy is not growing as rapidly as he would like to see it grow, and hinted that further monetary easing might be forthcoming…as early as September.

The non-news of the day is Bernanke says scope for more Fed easing Federal Reserve Chairman Ben Bernanke says there’s room for the central bank to take more action in responding to critical questions from a top lawmaker on Capitol Hill.

quot;One disadvantage of asset purchases relative to conventional monetary policy is that we have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public.quot; -       Federal Reserve chairman Ben Bernanke, referring to quantitative easing.     Or to put it another way: we don't know if it will work, and we don't know how to spin it. These are dismal days.

Wall Street Weather submits:Stocks and commodities have risen while the dollar and bond yields have fallen since the September 21 FOMC meeting. The expectation is that the Federal Reserve will embark on a second round of quantitative easing (“QE2”) at its next meeting on November 3.