The stock market has taken another big hit today reacting to numerous economic headlines like Merrill Lynch Posts Steep 4Q Loss and Novartis 4Q Net Profit Falls 45 Percent, and worse yet a regional Federal Reserve report showed a sharp decline in manufacturing activity and as investors grew concerned that downgrades of key bond insurers could trigger further trouble with souring debt.
But this was the day that Ben Bernanke the Fed Chair reported to congress and tried to pacify the markets with his open mind about shoring up the economy through economic stimulous.
Perhaps it is my imagination, but it seems to me that when Alan Greenspan spoke, for better or worse, he was able to exert a calming influence on Wall Street if that was his intention. When Bernanke attempts the same trick somehow it feels like something is missing.
Please do not misunderstand me. I do not choose to debate the style or substance of these two accomplished gentlemen, just the market response to the choice of words and timing of those words. Perhaps, it is the times we live in and not their acumen on the job, but the DJIA closed down 306.95 points to 12,159.21 today.
What would have happened if Bernanke did not speak? Would it be still worse? What if congress called on Greenspan to address them; just for old times sake, would it have been different? Greenspan was chairman for 19 years, surely he had a lot of bad days. Today looks to be just one of many bad days ahead... and that's coming from an optimist.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. Read his Chasing Value and Serious Money columns
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