Ben Bernanke, Chairman of the Federal Reserve, gave an unprecedented interview that aired on 60 Minutes last night. Fed Chairmen very, very rarely grant interviews, so it made for interesting watching. Clearly the objectives of the interview were for Bernanke to remove some of the secrecy of the Fed by explaining their decisions a bit and to instill some confidence in the economy at a low point. I think he succeeded in both.
Although it was clearly not a difficult interview (I am sure there were a number of ground rules in place in order for Bernanke to agree to appear), and he has to be careful what he says since he has so much sway over the markets (remember Alan Greenspan's mumbling testimonies before Congress?), Bernake still had some interesting answers and perspective from the Fed on our current situation. The piece (in two parts below, both about 13 minutes) gives a nice overview of the crisis along with Bernanke's thoughts and is well worth watching in full for a reasoned economic perspective, but I know you may not have time to watch all of it so I tried to make it easy by highlighting key points to fast forward to:
Part 1
50s: "we'll see the recession coming to an end probably this year."
3m 50s: "You didn't rescue Lehman Brothers. It set off a worldwide panic when it went bankrupt. And I wonder, looking back, whether you think that was a mistake,"Pelley asks
4m 54s: "Let me just first say that of all the events and all of the things we've done in the last 18 months, the single one that makes me the angriest, that gives me the most angst, is the intervention with AIG."
6m 18s: Asked how close of a call [a global financial meltdown] was, Bernanke said, "It was very close. It was very close."
7m 15s: Discussion of what the fed has been doing and if it is taxpayer money being spent
12m 45s: "I think the biggest risk is that, you know, we don't have the political will. We don't have the commitment to solve this problem, and that we let it just continue.
Part 2
2m 20s: "I come from Main Street. That's my background," Bernanke said. "I've never been on Wall Street.
7m 25s: "Well, a lot of mistakes got made. No question about it. But, you know, this was a much bigger thing than any single firm or any single individual,"
10m 40s: "I think all of our efforts, so far, have produced results. We're buying about $500 billion in mortgages, in package and securities by the G.S.E.s, Fannie Mae and Freddie Mac. And that seems to have brought down mortgage rates significantly. It allows people to refinance. To get out of high rate mortgages. We are seeing progress in the money market mutual funds, and in the business lending area. And I think as those green shoots begin to appear in different markets and as some confidence begins to come back that will begin the positive dynamic that brings our economy back."
11m 55s: Bernanke's 3 point "message" to the American people
Bernanke Interview Part 1:
Bernanke Interview Part 2:
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