Marios Hadjikyriacos on big government fighting the coronavirus

The overwhelming firepower from governments and central banks was enough to fight the pandemic, but not enough to annihilate it.

~ Marios Hadjikyriacos, senior investment analyst at XM, "Dow skids 600 points lower as spread of delta variant rattles Wall Street," MarketWatch.com, July 19, 2021

Neel Kashkari on the $2 trillion rescue package

Think of firefighters putting out a fire. If their primary aim is to conserve water, they increase the odds of losing control of the fire.

The $2 trillion legislation includes many provisions to help both businesses large and small and the millions of Americans who are losing their jobs. As implementation begins, officials will be tempted to develop complex rules to decide who will qualify. For example, if each of the thousands of struggling small businesses needs to be individually vetted, the program is likely to be too slow to meaningfully help the economy. While the U.S. economy can bounce back from a crisis fairly quickly, it took more than 10 years after the 2008 crisis to rebuild the labor market. We can’t let that happen again. Let’s learn from history and douse the raging fire — before it becomes uncontrollable.

~ Neel Kashkari, "What the 2008 rescue package can teach us about today's relief bill," Washington Post, March 27, 2020

Irving Fisher on the liquidation cure for busts

40. [I]t would be as silly and immoral to "let nature take her course" as for a physician to neglect a case of pneumonia. It would also be a libel on economic science, which has its therapeutics as truly as medical science.

~ Irving Fisher, "The Debt-Deflation Theory of Great Depressions," September 1933

Jeremy Siegel on the potential for Fed tightening

There's so many steps to go before we hit [a point where the Fed feels compelled to tighten] and Bernanke is going to give a speech that is going to say, you know, 'Our strength is now showing, we're going to remove some of the accomodation'. It'll first come probably with moving just the discount rate and then finally some moves on the Federal Funds, it's not going to come all of a sudden. 'Cause, despite how bad the inflation numbers were on the PPI and the CPI this week, the Core were almost exactly on target. That is what the Fed is looking at so there is no reason for a precipitous move right now. They just have to keep their eyes open for problems.

~Jeremy Siegel, professor of finance, Wharton School of Business, Bloomberg News interview, March 24, 2011

Jeremy Siegel says the bull market is intact, but Bernanke must be watchful

There's always things for the market to worry about. I start worrying when no one worries. Then we're at a top for the market.

In terms of when the Fed starts raising, history shows that, yes, there is a little tremble, a little correction that comes in, but the early tightening by the Fed does not stop a bull market. It's only the very late tightening when they really have to move against the excesses and the inflation that we really see stocks having trouble.

So, there certainly will be a flutter when Bernanke has to make that shift but my feeling is that won't stop the bull market. Also, one must remember that mild inflation, even 2 to 4%, a little bit above the Fed's target, has actually been a sweet spot for stocks historically. Stocks are real assets, they tend to move with prices, it gives corporations and firms pricing power, so I'm not worried about a mild inflation. I think that's not going to be a problem for stocks. Obviously anything more than that, 5, 6%, the Fed would have to move very aggressively.

~Jeremy Siegel, professor of finance, Wharton School of Business, Bloomberg News interview, March 24, 2011

Sen. Judd Gregg on the Fed/Bernanke to the rescue

Gregg: If you're going to start blaming people, you should also credit people for the things they did right. Now, we were on the verge of a cataclysmic event in late 19-... er, 2008, and it didn't look good for us as a country as we were heading towards what looked like a massive financial meltdown of all our institutions. And it would've had a HUGE impact on Main Street. Yes, we've been through a very serious recession. But you're talking about something that could've been on a depression-type of level, and it didn't happen.

Why didn't it happen?

It didn't happen because the chairman of the Fed, along with the Treasury secretaries, both Paulson and Geithner, stepped in and did some really original things. And sure, they pushed the envelope, but if they hadn't pushed the envelope the disaster which would've occured would've been cataclysmic for us as an economy, and for Main Street specifically.

The way I describe it is this: it's like you're driving over a bridge and the bridge is about to collapse, and there's no way it's not going to collapse, except that a guy comes along and fixes it before you drive over it. You keep going, you don't even know the bridge got fixed. That's what happened here. Ben Bernanke came in, with the Fed, put significant resources into the economy and basically the financial structure, and stabilized the bridge so that the economy continued on.

Granted, we've still had a recession, but I think you have to give him a lot of credit for doing a very great job in really an extraordinarily difficult time.

CNBC: Well, I know you've heard the metaphor, 'The arsonist puts out the fire...'

Gregg: Well, he's not the arsonist.

~ Sen. Judd Gregg, Banking Committee Member, CNBC.com Video, "Late Rally for Bernanke", Mon. Jan 25th, 2009, 7:43AM ET

Timothy Geithner on putting out the economic forest fire

To stand back and let it burn is irresponsible. It's what happened in the Great Depression.

~ Treasury Secretary Timothy Geithner, testifying about AIG bailout, January 27, 2010

Peter Yastrow to the Fed: "put out the fire"

The Fed's going to have to ease because all of these pristine traders who have all these wonderful trades on. When you take it all the way you just realize in the end it's collateralized by somebody's house, which isn't worth what they said it was worth when they borrowed the money for the house. It all ties back to that.

You can't just say "we told you so" and turn your back. The Fed is the fireman of our economy, and there's a fire and they're gonna put it out. That's their job. Their job is not to sit around and scold people for making bad loans [and] for other people for buying those bad loans. The Fed's job is to put out the fire.

~ Peter Yastrow, market strategist, MF Global Ltd., August 9, 2007, as appeared on CNBC