Wall Street loses confidence while Bernanke did not reassure
beautiful reaffirm before the Senate Banking Committee that rates will remain 'very low very long time', that's not enough to restore a euphoric feeling on Wall Street.
This speech was pleasant in 2009, recovery begins and the markets would bet it would be self-sufficient by 2010.
But now Ben Bernanke says he is not so and that uncertainties about the level of growth is 'unusually high'.
He was even willing to consider new measures (monetary) support if the economy was showing signs of weakness ... but he gives no details about their nature and does not reveal any original strategy.
It also reaffirms that inflation is not a problem ... but Wall Street begins to wonder just how prices can remain as wise after the Fed has injected $ 1.500Mds in the economy.
Not inflation, it would not he the harbinger of deflation (as in Japan 20 years ago)?
But there is more concern: Ben Bernanke speaks in contrast with a wealth of detail the means at its disposal to offset the over-liquidity, which seems contradictory to a poorer prognosis than reserved about growth: it n is not the time to drain the market!
It did not take more than a quarter of an hour on Wall Street to lose more than 1% as soon as Ben Bernanke spoke before Congress (it will repeat Tomorrow's speech to the House of Representatives) and after one hour, the losses exceeded on average -1.5%. Some buybacks
cheaply helped limit the damage but the overall balance is not brillat and all gains of yesterday have largely been erased.
The Dow dropped -1.07%, the 'S & P, Nasdaq -1.3% and -1.58%.
The Standard & Poor's 500 most representative of the trend, fell to the contact of 1.065Pts before reacting and to finish by Pts 1069.5, its lowest close since July 16 (after ricocheted MM50 under which gravitates towards the beginning 1.088Pts sitting.
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