Federal Reserve Chairman Ben Bernanke delivered some classic Fed-speak to homeowners, shareholders and Congress on Thursday..
As a former economics writer, I thought I'd translate what Chairman Bernanke said to struggling Americans, and what I heard. What Bernanke Said: "The virtual shutdown of the subprime mortgage market and a widening of spreads on jumbo mortgage loans have further reduced the demand for housing, while foreclosures are adding to the already-elevated inventory of unsold homes."
What I Heard: "I'm crapping my pants, you should be, too." What Bernanke Said: "As investors lost confidence in their ability to value complex financial products, they became increasingly unwilling to hold such instruments. As a result, flows of credit through these vehicles have contracted significantly." What I Heard: "Banks have no clue how bad this is, and you know what, Sherlock? I don't have a fuh-REAKING clue either. Think you're getting a new HELOC for a shiny new kitchen? Forget it, sucker." What Bernanke Said: "....a number of factors, including continuing increases in energy prices, lower equity prices, and softening home values, seem likely to weigh on consumer spending as we move into 2008." What I Heard: "Remember the late '70s? No, of course not. You know nothing about a real recession. Tell you what. Ask Gramps to get out those big-ass sweaters from the Carter years, forget about the mall, and snuggle on up in your newly chilly McMansion, which is losing value by the minute." What Bernanke Said: "..any tendency of inflation expectations to become unmoored or for the Fed's inflation-fighting credibility to be eroded could greatly complicate the task of sustaining price stability and reduce the central bank's policy flexibility to counter shortfalls in growth in the future." What I Heard: "Go ask Gramps what STAGFLATION means. In two words, it sucks." What Bernanke Said: "To be useful, a fiscal stimulus package should be implemented quickly... What I Heard: "I need help from Congress, like, right now. Like, right the F--- NOW. Can I go back to being a professor now? Please? None of this is my damn fault! Say to together, people: take your bitchin' and moanin' and belly achin' and big bad toxic mortgage to GREENSPAN. I'll get you his number."'What Bernanke Said: "Market participants still express considerable uncertainty about the appropriate valuation of complex financial assets and about the extent of additional losses that may be disclosed in the future. On the whole, despite improvements in some areas, the financial situation remains fragile " What I Heard: "Did you look at what your 401K did today? For the year? I dare ya. I double dog dare ya. Start lovin' you some of those canned goods, everyone. Peace out."