Kudlow: Bernanke is the Man

A slow day on on Wall Street is giving everyone a chance to get their heads together and touch base with friends to discuss their solvency, and also engage in a little gossip with the crisis rapidly fading away. Funny, not everyone is picking up their phone. Have the layoffs started?

Meanwhile, while the government was able to find spare change for Wall Street; Main Street is out of luck:

US Treasury Secretary Henry Paulson renewed his call for action on Social Security and Medicare reform Tuesday, as a report showed that the entitlement programs were poised to run out of money in coming years. “Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America’s future prosperity,” said Paulson in a statement.

Bailing out Wall Street is a no brainer, senior citizens be damned. Maybe Jamie Dimon will float him a loan.

Accolades for Paulson have been few and far between, but the praise for Bernanke is rolling in. Forget McCain, Larry Kudlow is voting for Bernanke:

I have really learned to like Ben Bernanke. He’s the man.

Shocker!

To be fair, Kudlow’s enthusiasm stems from cuts in the Fed Funds rates more than any bailout, but the drop in gold prices and the improvement in housing affordability has Larry singing Ben’s praises.

Good Times?

.....all of Bernanke’s emergency machinations to fight the recession in housing and housing-related credit are starting to show very positive effects. Along with various new schemes to backstop the banking system and provide short-term lending help to banks and broker-dealers, many on Wall Street are coming around to the view that something called “systemic risk” is being reduced in the financial world. That includes all those lousy sub-prime securitized mortgages, along with various buyout loans and nasty things like collateralized debt obligations. Sharp-eyed Wall Street analyst Dick Bove puts it quite simply: The worst of the financial crisis may well be behind us.

So you know what? Let’s give this guy Bernanke a little credit. I think I may make him my new best friend.

No doubt about it, the scoreboard says it all. Bears lose. But it is not all good.

Even the regulators are unhappy:

``The Fed is so far outside the traditional bounds,’’ said Mason, a former economist at the Office of the Comptroller of the Currency, one of five federal bank regulators. ``It isn’t innovative, it is taking a step back in time to a system of direct credit’’ where the government decides ``who gets funding and who doesn’t,’’ he said. Bloomberg

The past week has polarized many people on Wall Street, and there is no middle ground in this debate. Too, Main Street is loaded for bear and Paulson might want to wait a few weeks before taking on the third rail of politics.

Americans have tough choices ahead. Do they want to be rich or thin? They might have to settle for one or the other. With a chunk of the rally already behind us, and the trading range likely to hold, maybe a diet is their best hope. Armageddon is off the table, but we are going nowhere fast. Unless testing 1400 on the S&P is your idea of a joyride.

Thanks Ben? Not so fast, Larry.

Ben Bernanke Is My Kind Of Guy
Kudlow’s Blog

Fed Expands Role by Aiding JPMorgan’s Purchase of Bear Stearns
Bloomberg

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